These Stocks Are Built Different

JC Parets
December 30, 2021

Some stocks are just built different.

Right now it's hard to ignore how the bond market is impacting certain stocks, and which ones of those are already ahead of the game.

You see in December, we've seen credit spreads narrowing to levels not seen since the pandemic crash in 2020. The Yield curve has been steepening as well. And rates in general, particularly the 10yr and 30yr held their key levels and started moving higher.

To me, all of this screams higher for bank stocks. But it's not a one size fits all scenario. There are leaders.

And I can't help but point out Customers Bancorp. This $2B Regional Bank stock has continued to make new all-time highs, despite the industry under pressure over the past couple of months.

There are some others we're keeping an eye on as well, which you can always find on our Trade Ideas page.

But this is a group that needs to be at the top of our watchlist if all of those things are occurring in the bond market: Yield Curve steepening, Credit Spreads contracting and the long bond yields rising.

How else do we play this move in bonds?

Energy.

Bank stocks and Energy. Those are the areas in focus if the bond market continues to do what it's been doing throughout the month of December.

Marathon Petroleum stood out from Monday's Follow The Flow Report:

We really like this one long as a way to take advantage of the entire space.

From an options perspective, buying a Call Calendar Spread here makes the most sense.

We’ll be short the $MPC February 70 calls and long an equal amount of April 70 calls.

Check out this short video Sean and I put together about the thought process behind choosing this particular strategy to express our bullish thesis in $MPC:

I like the reasoning behind this strategy. It makes the most sense.

Want to learn more about Options Trading?

Take our NEW Options Made Easy Course.

I've never seen anything like it. I think you'll be blown away!

JC

 

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