STOCKS HAVING A STRONG ELECTION DAY -- ALL SECTORS ARE IN THE BLACK -- BANKS AND FINANCIALS LEAD ON HIGHER TREASURY YIELDS

STOCK INDEXES ARE HAVING A STRONG ELECTION DAY... Stocks are rallying for the second day in a row after finding support near their September lows.   Chart 1 shows the Dow Industrials bouncing impressively off their 200-day moving average.   Chart 2 shows the S&P 500 also rallying for the second day in a row after finding support near its September low.  The SPX has already cleared a small overhead gap formed last week and is nearing a test of its 50-day moving average.   Its 14-day RSI line is also bouncing off oversold territory near 30.   Chart 3 shows the Nasdaq 100 (QQQ) rebounding as well.   All eleven market sectors are in the black with the strongest gains in financials, industrials, and technology.   Financials are the day's strongest sector and appear to be benefiting from a nearly five-month high in the 10-Year Treasury Yield.   Higher bond yields are also giving a big boost to bank stocks.

10-YEAR TREASURY HITS FIVE-MONTH HIGH... Bond yields continue to climb.  Chart 4 shows the 10-Year Treasury yield rising today to the highest level since June.   The main reason for their recent climb appears to be the prospect for more government borrowing to finance any future stimulus spending.  The Treasury will need to sell more bonds to finance that deficit spending which should push bond prices lower and yields higher.   Banks and financials are usually the biggest beneficiaries of higher bond yields and a steeper yield curve.

BANKS LEAD FINANCIALS HIGHER... Financials are the day's strongest sector.   Chart 5 shows the Financial Sector SPDR (XLF) rising above its 200-day average today.  Banks are a big reason why.  Chart 6 shows the  S&P Bank SPDR (KBE) rising to the highest level since June.   The S&P Regional Banking SPDR (KRE) is doing the same.  Expectations for more stimulus spending after the election may also be boosting stock prices.