Related: Ahead of Bank Earnings, Investors Should Approach ‘XLF’ ETF With Caution
Be Patient
Other factors may be hampering the sector. Some market observers warned that banks may even be cutting back on lending as bankers are becoming more concerned over the late-cycle U.S. economy. Indicators such as credit-card charge-off rates have increased, though the rate leveled off over the summer.
“JPMorgan, Wells Fargo, Bank of America, and Goldman Sachs are among the banks set to report next week. Baruch doesn’t recommend buying ahead of the reports since there have been ‘knee jerks higher on solid earnings’ but then under-performance after that,” according to CNBC.
Investors have added $346.24 million to XLF since the start of 2019 after pulling $5.35 billion from the fund last year.
For more information on the financial sector, visit our financial category.