Some strength in investment banking is making up for some seasonally weak fixed-income trading, reports Rouhan Sharma for Morningstar.
“We expect the issues facing the sector … to continue with loan growth remaining muted and weak investment banking revenues. Offsetting these negatives, we see credit quality continuing to improve and as we have more clarity on new capital levels,” according to a Doleman Securities report. [Will Mortgage Settlement, Card Fees, Revive Financial ETFs?]
Financial Select Sector SPDR Fund (NYSEArca: XLF) was up 0.7% in premarket trading Thursday. The financial ETF invests 8.8% of assets in JP Morgan and 6.5% in Citigroup. The iShares Dow Jones U.S. Financial Services Fund (NYSEArca: IYG) is another large financial sector ETF. [Financial ETF Fails Test as Bank of America Sets New Low.]
Financial Select Sector SPDR Fund
Tisha Guerrero contributed to this article.