There are no Great Expectations for bank earnings next week.
A combination of weak trading volume and low interest rates have caused many analysts to lower their Q2 estimates for the biggest U.S. banks.
According to Refinitiv, revenue growth expectations have dropped to 1.6% from 3.4%, while earnings growth for the S&P 500 bank index is at 11%, down from 14.4%.
Bullish on banks
Still, Jim Paulsen, chief investment strategist at Leuthold Group, is bullish on the sector and thinks now is the time to buy.
“I don’t really expect the earnings to be that good, but going forward I think it’s going to get better here,” Paulsen said on Yahoo Finance’s “The First Trade.”
“I really think the economy is going to pickup in the second half, revive a bit, and actually we’re going to have rising yields in the second half, which also should help the financials,” Paulsen says.
He points to a recent pickup in loan growth and robust merger and acquisition activity as further positives for the banks.
“I think [bank stocks] are a good relative value, that also might come into a good cyclical environment in the second half of the year,” he said.
You can be sure investors will be looking for signs from bank executives that they can continue to grow their bottomline.
Alexis Christoforous is co-anchor of Yahoo Finance’s “The First Trade.” Follow her on Twitter @AlexisTVNews.