This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Quick Take: Big Expectations for Banks

NEW YORK ( TheStreet) -- With earnings season underway, many investors will be watching the financial sector for clues on the economy.

Stephanie Link, the co-portfolio manager of Action Alerts Plus, told TheStreet's Lindsey Bell that while Alcoa (AA) kicked off earnings on Monday afternoon, Wells Fargo (WFC - Get Report) and JPMorgan (JPM - Get Report) will really be the earnings to watch when they report Friday morning.

Investors will be waiting to hear what the firms expect from the economy in the second half of 2013, Link said. While investor optimism appears high, Link thinks it will be a "sell-the-news" type of event, citing limited top-line growth.

The banks will also continue doing well with cutting costs and releasing some of its reserves, but loan growth will likely remain stagnant, she added.

However, while there is limited potential right now, more positive catalysts should begin to propel the bank stocks higher going into 2014, including higher net interest margins, an improving housing market and a growing economy -- albeit, slowly.

But will the new capital requirements be a negative for the banks going forward? "Not at all," according to Link.

With the 2018 deadline, the banks should be able to exceed these amounts well before then. However, investors will continue to worry about the banks being allowed to payout dividends and buy back outstanding shares.

Aside from JPM and WFC, both of which are holdings in the Action Alerts Plus portfolio, Link likes regional banks M&T Bank (MTB) and Hudson City Bancorp (HCBK) for their potential going into the next year.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter. Focuses on short-to-intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JPM $66.47 0.00%
WFC $56.00 0.00%
AAPL $132.54 0.00%
FB $80.54 0.00%
GOOG $540.11 0.00%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs