5 Finance Sector Stocks Set To Beat Q1 Earnings Estimates
Zacks Investment Research | Apr 25, 2019 08:56AM ET
Performance of finance sector depends on the health of the nation’s economy. During the first quarter, major factors influencing the U.S. and global economy included the Fed’s dovish stance on future rate hikes, uncertainty over Brexit, expectations of economic slowdown, the unsolved U.S.-China trade deal negotiations and the U.S. government shutdown.
All these factors impacted the performance of the banksand other lenders, while overall lending scenario remained decent with higher interest rates providing some support. Also, the insurance industry seems to have benefited from a not-so-active catastrophe environment, while asset inflows will likely offer support to asset managers.
On the cost front, expenses are likely to increase as finance sector companies continued with investments in franchise and technological upgrades. Business restructuring activities are also expected to keep such expenses high.
Performance So Far
The quarterly numbers from approximately 53% of the finance sector’s market capitalization in the S&P 500 index already out.
Like always, major banks (accounting for roughly 45% of total finance sector earnings) – JPMorgan (NYSE:JPM) , PNC Financial (NYSE:PNC) and Wells Fargo (NYSE:WFC) – kicked started the reporting cycle with decent performance on the back of steady loan growth, strong asset quality and relatively high interest rates. Nonetheless, weakness in trading and investment banking performance hurt the financials of these some of these banks and those of Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) – two big investment banks – as well.
Now coming to investment managers such as BlackRock (NYSE:BLK), the quarter witnessed decent asset inflows driven by strong equity market performance. Further, insurance providers like Torchmark Corporation (NYSE:TMK), Progressive Corporation (NYSE:PGR) and Travelers (NYSE:TRV) Companies benefited from lower cat losses and higher premiums.
Overall Earnings Growth Expectations
In the S&P 500 universe, the Zacks Original post
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