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Some strategists also argue that the financial sector may be a good area to look at this time around, given the potential for growth in a rising rate environment, along with potential tax and regulatory changes under the Donald Trump administration.
“Worries about banks’ underlying performance have weighed on bank stocks this year, even though first-quarter results were strong. Financial stocks in the S&P 500 have led all sectors since last November’s election, but the bulk of the gains came in late 2016. In the first half of 2017, financial stocks trailed the broader market,” according to the Journal.
Interest rate concerns are evident following recent commentary from some big-name bank executives. Additionally, analysts have been reining in second-quarter earnings estimates for large banks, based in large part on declining net interest margins. XLF is up almost 8% this year.
For more information on the financial sector, visit our financial category.