Tuesday marks the start of big bank reporting season as Wells Fargo (NYSE: WFC) and Dow component J.P. Morgan Chase (NYSE: JPM), XLF’s two largest components, each step into the earnings confessional.
As bank earnings season evolves, investors should keep an eye on trust and custodian banks because “ttrust bank stocks have historically rallied 12 to 14 months before the first Fed rate hike, and whether a rate hike comes in ’15 or ’16, trust bank stocks are within or not far from the next ‘rally window’,” Citigroup said in a note obtained by ValueWalk.
Among those trust banks, Citi likes State Street (NYSE: STT), but notes that Warren Buffett favorite Bank of New York Mellon (NYSE: BK) could be the better long-term play. Checkout the handy pie chart below to see the massive percentage of XLF holdings reporting earnings this week.
