Our rating on the Financial sector is Over-Weight. The Fed's rate-hike campaign is expanding net interest margins for banks. We also look for recovery in fee-based businesses, bond issuance, and M&A as the rate cycle winds down. Still, with inflation running hot, companies may cut back on hiring and investments, and thus on business loans. As of the end of April, the sector accounted for 13% of the S&P 500. The sector was outperforming the market with a gain of 12.0%. It underperformed the market in 2023, with a gain of 7% compared to a gain of 24% for the S&P 500. The sector includes money center banks, regional banks, investment banks and brokerages, exchanges, insurers, and financial data companies. Here are the Financial companies that either are on our Focus List or are used in our model portfolios.

This is the week that many have been waiting for, with Nvidia's quarterly results after the close on Wednesday. Expectations are, of course, "off the charts." That brings in an element of anxiety related to the stock as well as for the entire AI and semiconductor universe. NVDA's chart is setting up quite nicely before the print, as it has traced out a continuous inverse head-and-shoulders pattern. A break over $970 would complete the bullish pattern and open the door for a possible measured move to the $1,120 to (about) $1,200 level. A disappointment in results and/or guidance (seemingly not likely given the company's enormous beats in recent quarters) could send the shares back to moving average support in the $800/$880 zone or result in a possible test of the recent $756 low. Because of Nvidia's market-leading relative strength and momentum, any weakness likely will be gobbled up quickly.

Lazard has a storied history that can be traced back to 1848. The company's revenue is nearly equally split between financial advisory, such as acquisition and restructuring advisory, and asset management. The company's asset management business is primarily equities (over 80% of assets under management), has an international focus, and is geared toward institutional clients. By geography, the company earns approximately 60% of revenue in the Americas, 35% in EMEA, and 5% in Asia-Pacific. Lazard has offices across more than 20 countries and over 3,000 employees.

Lazard Ltd., one of the world's leading financial advisory and asset management firms, provides advice on mergers and acquisitions, strategic matters, restructuring and capital structure, capital raising and corporate finance, as well as asset management services to corporations, partnerships, institutions, governments, and individuals.