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Financial Stocks Likely to Post Strong Performance in February
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Loading...Financial stocks look set to resume their gains in February, following a month in which two of the largest U.S. banks, JPMorgan Chase (JPM) and Goldman Sachs (GS) , helped drive the Dow Jones Industrial Average to record highs.
The Federal Reserve, whose monetary policy committee is scheduled to conclude a two-day meeting on Wednesday approved its second 25-basis-point hike in short-term rates since the financial crisis in December.
Investors will also be watching for Trump's appointment for the Federal Reserve vice chair of supervision, the Fed's key role for banking regulation, Cannon added. There are two open vacancies on the Fed's Board of Governors.
It's not only banks that stand to benefit. As February begins, investors are awaiting fourth-quarter reports from insurers, including American International Group (AIG) , MetLife (MET) and Prudential Financial (PRU) , whose earnings have been pressured by years of low interest rates that affected returns on their investments.
A rise in interest rates, a relatively healthy U.S. economy and an easing of some regulatory provide most life insurers with a power catalyst for relatively favorable growth and profit margin improvement.
The question facing investors now is which stocks are best positioned to build on those gains.
Visa (V), Charles Schwab (SCHW), AON (AON), KKR (KKR), SVB Financial Group (SIVB), Voya Financial (VOYA), Colony Starwood Homes (SFR) National General Holdings (NGHC), Meta Financial Group (CASH).
Following bank's quarterly earnings, Cannon said that KBW analysts have become bullish on Bank of America
The KBW Bank Index, which tracks the performance of leading banks, climbed over 21% since the presidential election
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