Investors crave more strong bank results

NEW YORK (Reuters) – U.S. bank funds are flying high, and this week’s earnings could accord. investors more reason to be optimistic about the sector.

Strong results from JPMorgan Chase & Co ~ward Friday bolstered expectations for top U.S. banks, many of what one. are due to report in the coming week, including Citigroup and Goldman Sachs.

Financials be seized of been among market leaders in the recent rally, with the Standard & Poor’s 500 posting its seventh right week of gains on Friday.

While the earnings outlook is guardianship alive hopes that stocks have more room to run higher, the ascend in bank shares has pushed sector indexes to near resistance levels, that could signal a rest stop for the shares in this anniversary-shortened week.

The market will be closed Monday in observance of Martin Luther King Jr Day.

JPMorgan Chase ~ward Friday reported profit and revenue that were stronger than analysts had expected, and the CEO said the bank could start to increase its dividend once regulators bestow the go-ahead, likely at the end of March.

Analysts uttered the news bodes well for other financials, most of which are becoming to report results this week.

“Financials could very easily be one of the real darlings of this particular earnings cycle,” uttered Burt White, managing director and chief investment officer of LPL Financial in Boston.

Financials are projected to acquire by far the highest growth rate in earnings for the fourth allot, largely because of easy year-ago comparisons, according to Thomson Reuters data.

Overall, S&P 500 earnings are expected to have increased 32 percent from a year ~ne, the data showed.

Besides the banks, economic bellwether General Electric like well as marquee tech names Apple, Google and eBay are right to report.

DREAMING OF BANK DIVIDENDS

Investors have been keen on account of news on when bank dividends will be reinstated, and when it happens, it’s going to low more investment in financials, White said.

“Once they start (gainful dividends) … you’re going to see an enormous footing up of buying from yield-starved investors, as well as funds and ETFs (give and take reciprocally-traded funds) that really are going to have to relook at the view and put financials back in there,” he said.

Among other highest banks reporting this week are Morgan Stanley, Bank of America and Wells Fargo & Co.