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New York (CNN Business)The prospect of higher interest rates this year is spooking investors in tech stocks and other high growth sectors. But it's a different story for big banks.
Bank stocks are off to a solid start in 2022, extending gains from the second half of last year.
JPMorgan Chase, Citi and Wells Fargo will tell investors how they did during the fourth quarter and what to expect in 2022 when they report earnings on Friday.
Banks will benefit from rising rates, provided that they don't go up too rapidly and hurt demand for mortgages, credit cards and other loans. Although higher rates make lending more profitable for banks, there is a limit to how high rates could go before they cool off the red hot housing market.
Financial firms are also thriving thanks to the boom in the stock market, which has helped boost trading activity. The stock surge has also fueled more demand for mergers and initial public offerings, and led to a jump in lucrative investment banking fees.
Together, the trends could supercharge bank earnings. Analysts are predicting that JPMorgan Chase's earnings per share soared nearly 70% in 2021.
Wall Street is also forecasting substantial profit increases for Citi, which is now under the leadership of new CEO Jane Fraser and Wells Fargo, which is finally starting to recover after years of underperforming due to its fake...
Read Full Story: https://www.cnn.com/2022/01/09/investing/stocks-week-ahead/index.html
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