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Will Bank Stocks Keep Sliding
Despite Higher Interest Rates?
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Banks stocks have taken a hit due to
low lending rates.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
So, one might think that the prospect
of the Fed raising rates several times
this year would be a promising sign
for the financial sector.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
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Before We Continue…
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
But, CNBC reports that the Fed may
not be able to save financial
stocks with rate increases.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
As banks have struggled to cut costs
and add new sources of income to
combat lower rates on lending,
investors have kept close watch on
the Fed for clues to when officials
will raise rates.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
But even with one rate hike in
December and the prospect of more
hikes this year, traders say higher
rates may not be enough to save
financial stocks from their slide.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
“Even in the current environment,
which is not bad, they’re not really
creating value for shareholders,”
Nick Colas of Convergex said
Thursday on CNBC’s “Power Lunch.”
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
According to Colas, the bigger
problem for financial companies is
that their profitability has already
taken a huge hit.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Colas said financials are returning 6
to 7 percent on capital, falling short
of the 8 percent minimum that
investors expect.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
For now, it seems that some
investors are giving up, he said.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Investors pay for a predictable rate of
return and today with bank stocks
they are not getting it.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Thus bank stocks are on a downward
slide.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
But stocks that fall commonly bottom
out and often present investors with
long term value on the cheap.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
When will it be time to buy bank
stocks again?
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Bank Stocks to Consider
Right Now
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
24/7 Wall Street reports four
attractive bank stock picks for
now.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
It seems hard to believe, but since the
highs that were posted last summer,
the bank stocks as a whole are down
a stunning 20%, which is more than
two times the loss that the S&P 500
put in.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
The question for investors looking at
the group is whether this is a bottom
or they have farther to fall.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
With worries about a slowing
economy, harsh election year
political rhetoric and weakening
capital markets, some are still
steering clear.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
A new Deutsche Bank research
report touches on all the above-
mentioned concerns and numerous
others, not the least of which is the
fallout from bad energy loans, which
could be around for years.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
However, the firm does have bank
stocks in its research universe that
are rated Buy.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
We found four that look very
attractive now.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
The four suggestions are Bank of
America, JPMorgan Chase, PNC
Financial Services and Wells Fargo.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
All of these stocks pay dividends and
as a point of reference Wells Fargo is
one of the top Berkshire Hathaway
holdings.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
How High Would Interest
Rates Need to Go to Help
Banks?
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
The Financial Times looks at banks
and the hit they have taken from
the Fed’s more dovish stance.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Officials expect to follow up the
modest rate rise they brought in
before Christmas with only two
increases this year, not four as
previously envisioned.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
The more dovish stance will cost the
US banking industry about $5bn,
estimates Mike Mayo, analyst at
CLSA.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
It would appear that to help out the
big banks the Fed would need to be
much more aggressive in raising
interest rates, perhaps four or more
times this year.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
But then they could also through the
country back into recession.
http://profitableinvestingtips.com/stock-investing/will-bank-stocks-keep-sliding-despite-higher-interest-rates
Perhaps the banks just need to tough
it out for the time being.

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Will Bank Stocks Keep Sliding Despite Higher Interest Rates?