Financial stocks will finally be able to breathe a sigh of relief once the Federal Reserve raises interest rates -- which would be the first time in nearly 10 years. Yet, investor focus is already shifting from who benefits from a rate hike to "what the environment looks like after the first rate hike".
The analysts noted the six financial stocks it considers "top picks" based on higher rates. But the note also mentioned other financial stocks set to benefit once the Fed lifts rates.
Raymond James Financial, Bank of New York Mellon, Northern Trust, and Bank of America are "best-positioned in the event of a 'one-and-done'" rate hike as stocks that "get most of the earnings upside from rates in the initial hikes rather than relying on normalized rates," the analysts wrote.
As well, "deposit betas could be a source of underappreciated upside as we do not believe banks will pass on a large part of the initial 50 basis point [rise]" to customers, the analysts wrote, with JPMorgan Chase, Bank of America, Wells Fargo, PNC Financial Services and E*Trade Financial most exposed.
Goldman's top stock picks on higher rates are: Bank of America, JPMorgan Chase & Co., Northern Trust Corp., Regions Financial, Charles Schwab Corp. and Zion Bancorp.
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.