Why the banking sector is better, but with room for improvement (Part 2 of 5)
This good news is a big reason why my team and I are less bearish on the global financials sector than we have been in the past. In fact, in our latest Investment Directions monthly market outlook, we upgraded the sector to neutral from underweight mainly because of our improved outlook on US financials, which dominate the global financials index, and our expectation that rates will moderately rise over the next year.
Market Realist – The graph above shows you how the financial sector (XLF) has shown increased levels of return on equity after the sharp fall it witnessed during the financial crisis of 2008.
Most of the top banks beat Bloomberg analyst estimates for earnings for the second quarter of 2014. Here are the highlights:
Read on to the next part of this series to see why the picture isn’t as rosy as it seems.
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