Chris Verrone, head of technical analysis at Strategas Research, said a steep decline last year should give some of these names a pop.
“Goldman, Morgan, they had 40% declines last year. These were devastating bear markets. We think they’re bottoming. Morgan Stanley back above its 200-day moving average for the first time in a year. Maybe this is a sign that the yield curve actually steepens here. Maybe this is a sign that rates actually go up. … It’s a broad call for us. We think rates are starting to bottom here. We think frankly signs of cyclicality are emerging everywhere and banks benefit from that.”
Jeffrey Harte, principal at Sandler O’Neill, said it’s best to bet on the largest of the financials and sees one winner among them.
“For those looking at bank stocks and your financials in general, I’d be looking at the large-cap big ones. Citi is one I like a lot and they reported this morning and actually the numbers look really good. The big thing we needed to see was consumer growth and we saw it. They kind of delivered on the big market skepticism there.”
Jim Cramer, host of CNBC’s “Mad Money,” said it was an uneven quarter with some bright spots that should continue.
“They key thing to recognize is March was great. January was weak … March was full bore, continuing, that’s what matters, not what happened this quarter but what was happening and what’s going to happen in subsequent quarters. It could be an opportunity.”
Stephen Weiss, founder and managing partner at Short Hills Capital, said regulatory headwinds from Washington might linger.
“This is a group that just hadn’t done well, it’s sort of been ignored. Now it’s done quite well so it snuck up on you. … There’s no basis for regulating them further and to the extent that we regulate them further you weaken the smaller competitors.”
Josh Brown, co-founder and CEO of Ritholtz Wealth Management, said major pre- and post-market moves in these stocks makes trading difficult.
“All of these post-earnings moves are happening in gaps and they’re happening at night or before the open in the morning so they’re not really allowing you to trade the news so you kind of have to almost place two bets: the first is what are the results going to be and the second is what will the reaction be because it’s going to happen prior to market hours.”