“Thanks to the post-election rally fueled by Donald Trump’s victory, the financials surged to finish the year up 20 percent from where the sector started in January. With JPMorgan hitting all-time highs in the first trading day of the year, Chad Morganlander, portfolio manager at Stifel Nicolaus, predicts that 2017 will be another banner year for the banks,” reports CNBC.

There is another important catalyst to consider for financial services stocks and ETFs: The potential for bullish earnings trends to emerge.

Higher interest rates would help widen the difference between what banks charge on loans and pay on deposits, which would boost earnings for the financial sector. Regional banks are among the stocks most positively correlated to rising interest rates because higher rates improve net interest margins.

“Along with the possibility of three interest rate rises in the coming year and Morganlander’s own observation that mortgage credit is starting to expand, both of which would also be good for banks, leads the portfolio manager to be overweight financials,” according to CNBC.

For more information on the banking sector, visit our financial category.

Financial Select Sector SPDR (NYSEArca: XLF)