4 Banks Riding High On Impressive Q3 Earnings
Zacks Investment Research | Oct 18, 2019 07:27AM ET
The third-quarter 2019 earnings season began earlier this week with some of the country’s top banks reporting solid earnings. Bank stocks performed remarkably well despite headwinds such as the Federal Reserve slashing interest rates twice during the said quarter and slowdown in global growth bothering business and customers alike.
Therefore, it would be prudent to take a look at some of these bank stocks.
Financial Sector Flourishes
The financial sector has witnessed decent growth this year, with the Financial Select Sector SPDR Fund (XLF) rising 17.7% on a year-to-date basis. What’s more, the sector ranks third in witnessing maximum growth (54.8%) among the broader S&P 500 sectors in the last five years.
Specifically in the third quarter, investment banks with large retail operations such as JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corporation (NYSE:BAC) outperformed despite the low-lending rate scenario.
The central bank reduced interest rates in July and September because of weakness in U.S. and global economy, which were largely the results of the ongoing U.S.-China trade war. The current benchmark rates are in the range of 1.75% to 2%.
As of Oct 16, Q3 results from 36.8% of the financial sector’s total market capital surfaced. About 85.7% of these companies have beaten EPS estimates and 64.3% have outpaced revenue estimates, per a Zacks Zacks Investment Research
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