Bank ETFs Get Ready For Earnings Deluge

The Fed is believed to be targeting three rate hikes in 2017 while Fed funds futures data currently imply the U.S. central bank will boost borrowing costs twice this year.

“The Federal Reserve’s decision to increase short-term rates 25bps came late in the quarter, such that net interest margins did not likely benefit. Fitch expects credit trends remained fairly benign during the quarter, particularly as oil prices stabilized,” adds Fitch.

Incoming President is looking to ease the regulatory burdens faced by many of the big name companies in ETFs like XLF.

Trump has said he would “dismantle” financial reform, or the Dodd-Frank financial reforms, that have caused big banks to take on increased capital requirements to obviate another depression event associated with high-risk debt.

“While overall loan growth is expected to be sluggish for the quarter, consumer lending likely came in relatively stronger, mainly driven by credit card and automobile loan growth. According to Federal Reserve figures for large domestic banks, overall loan growth is estimated at 0.5%-0.7% for 4Q16, dampened by election and monetary policy uncertainties,” notes Fitch.

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