There had been a cascade in recent days of downgrades and other negative forecasts in connection with big banks, but some analysts on Wednesday picked up the industry's argument that fundamentals are stronger than the markets are giving banks credit for.
Investors are spooked by banks' exposure to oil and other sectors threatened by a global slowdown as well as by policy uncertainties, but banks argue credit quality is strong and recession fears are exaggerated.
Atlantic Equities’ John Heagerty cut his recommendation on JPMorgan Chase to neutral, saying the bank now “offers the least upside” to price targets among the major banks.
While equity prices drop an average 5% at big banks, bosses express confidence in the U.S. economy; the bank appoints new managers in payments, consumer banking and marketing.
U.S. earnings climbed 44% from a year earlier, aided by lower taxes, a widening net interest margin, record contributions from its stake in TD Ameritrade.
The ratings agency said that it views rollbacks of stress-test comparisons and liquidity coverage ratio requirements as "negative" for banks with between $100 billion and $250 billion of assets.
Berkshire Hathaway plowed $13 billion into bank stocks in the third quarter that included new investments in JPMorgan and PNC and additional investments in Bank of America and Goldman Sachs.
