Are bank stocks too hot?The KBW Bank Index has now risen 16% year-to-date, following last year's 25% decline. Sterne Agee analyst Todd Hagerman on Friday expressed caution over the sector's strong year-to-date performance, heading into next week, when the Federal Reserve will publicly announce the results of its annual stress tests on the largest U.S. bank holding companies, saying that "while bank stocks have regained their footing with an improved investor outlook and the recent steady flow of positive economic data," the likelihood for more subdued GDP forecasts relative to 2H11 are each likely to weigh on valuations and further potential upside in the shares."
Fifth Third BancorpFifth Third's shares have now returned 6% year-to-date, following an 11% decline during 2011.
Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.