Investors crave more strong bank results

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

Strong results from JPMorgan Chase & Co in successi~ Friday bolstered expectations for top U.S. banks, many of that are due to report next week, including Citigroup and Goldman Sachs.

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

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

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

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

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

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

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

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

Besides the banks, relating to housekeeping bellwether General Electric as well as marquee tech names Apple, Google and eBay are what is ~ to report.

DREAMING OF BANK DIVIDENDS

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

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

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