Financial Sector Update for 05/30/2023: EFC, AAIC, EFC, CS, XLF, FAS, FAZ

Financial stocks were gaining pre-bell Tuesday with the Financial Select Sector SPDR Fund (XLF) up 0.1%. The Direxion Daily Financial Bull 3X Shares (FAS) was 0.6% higher and bearish counterpart Direxion Daily Financial Bear 3X Shares (FAZ) was down 0.5%.

Ellington Financial (EFC) was slipping past 2% after saying it has agreed to acquire Arlington Asset Investment (AAIC), resulting in a combined entity with an expected pro forma equity capital base of more than $1.5 billion.

UBS (UBS) is facing a potential regulation that would limit its assets after completing the acquisition of Credit Suisse (CS) as Switzerland's Social Democratic Party is set to propose an upper limit for the bank's assets, Reuters reported, citing newspaper Aargauer Zeitung. UBS was 0.5% lower.