Related: Financial Sector ETFs Maintain Momentum
In the Jefferies note “three major banks saw their targets raised handily along with reiterating their Outperform ratings. Other targets were raised or ratings were given bumps as well. The firm said that its favorite names remain BofA, Citi, CIT and Goldman Sachs,” according to 24/7 Wall Street.
Those stocks are components in the Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF. Jefferies also raised “earnings estimates for 2016, 2017 and 2018 were raised for JPMorgan Chase, Morgan Stanley and Wells Fargo,” reports 24/7 Wall Street.
Those are also major holding in XLF.
Politics are also boosting bank stocks. President-elect Donald Trump’s official transition website stated that the “financial Services Policy Implementation team will be working to dismantle the Dodd-Frank Act,” which was signed into law by President Barack Obama in 2010 to obviate another financial downturn. The law increased the burden of banks to safe guard against another meltdown event and forced many to greatly reduce exposure to riskier assets, which have also dragged on the financial sector’s bottom line.
For more information on the banking sector, visit our financial category.