Listen to the audio version of this article (generated by AI).
Managing Editor’s Note: Today, we’re hearing from our contributing editor Mike Burnick in his weekly feature.
Mike has over 30 years in the investment and financial services industry – from operating as a stockbroker, trader, and research analyst, to running a mutual fund as a registered investment advisor and portfolio manager, to being Research Director for the Sovereign Society, specializing in global ETF and options investing.
And he’s been senior analyst at TradeSmith for three years, running Constant Cash Flow, Infinite Income Loop, and Inside TradeSmith.
Here’s Mike…
How Disruption Creates a Buying Opportunity
BY MIKE BURNICK, CONTRIBUTING EDITOR, MARKET MINUTE
Meta Platforms agentic AI agent Muse recently launched, and it quickly ramped to the top of Apple’s App Store download list.
Among the many businesses threatened by Muse are financial stocks.
The theory is that procrastinating consumers are too lazy to go online themselves to transfer spare cash into higher-yielding savings accounts.
So, Muse is the app to do that for you, automatically making cash transfers to help you earn more interest. Plus, it can make online purchases for you too, so you get the lowest prices.
So… all I have to do is hand over my credit cards and ultra-sensitive bank account info to a one-month-old app. That’s it? Sure!
Oh, did I mention the app is from Meta… the company just found liable for failure to keep user data private.
Hmm, not likely!
The Muse madness reminds me of the SaaS-apocalypse earlier this year, when AI was going to put every software company on the planet out of business.
Software stocks dropped as a result, but from the worst of that scare in March, the iShares S&P Software ETF (IGV) quickly rebounded, up nearly 40% since then.
The same thing appears to be playing out all over again for financial stocks…
Muse madness chopped 7.5% off the SPDR Financial Sector ETF (XLF) in just a few weeks. Smaller, regional banks got hit even harder, down 10.5%.
I smell a potential buying opportunity.
And turning to our proven Trade Cycles indicators, you can see an upcoming seasonal buying opportunity for yourself.
Subscribers can easily look up the ticker symbol for any stock, ETF or other assets, and simply click on the Trade Cycles tab.
From there, you can see at a glance any upcoming seasonal sweet spots. Periods of time that happen year-round when certain assets have consistently trended higher in price.
Case in point, the SPDR S&P Regional Banking ETF (KRE) has just such a seasonal bullish period starting Oct. 19 – just a few weeks away – and running to Nov. 23.
During this Optimal Seasonal period, KRE is up 93.3% of the time over the past 15 years, while posting average returns of 6.93% historically!
(What’s more, Jeff covered another angle on the potential upswing in the banks in yesterday’s Market Minute.)
It’s ironic that, if anything, AI advancements should actually help banks not hurt them, by boosting their bottom-line with greater automation and operational efficiency.
But this benefit will accrue to banks internally, behind their own cyber-security IT protocols.
I doubt a third-party app from the Facebook folks benefits most.
Good investing,
Mike Burnick
Contributing Editor, Market Minute