The main sector we are looking at for this upcoming week are Financials. With a vacant seat in Federal reserve open thanks to the resigning of Daniel Tarullo, financials are on everybody's radar. Mr. Tarullo was the main person who led the regulations put on Wall Street banks after the 2007-2008 financial crisis. President Trump now has the ability to appoint a new member to take his position. With Mr. Trump's promises of tax cuts and deregulation he will most likely appoint someone who has identical views.
For the financials we are going to focus our sights on regional banks. We are looking at regional banks because they make most of their profits from their loans. Bigger banks such as Bank of America, JP. Morgan etc. will benefit from the deregulation as well, but with so many different revenue streams, not as much as smaller regional banks. Our three picks are:
$KRE: $KRE is the regional bank ETF. Of course this is the go to option when trying to have decent exposure to the regional banks.
$RF: Regions Financial Cop. is a stellar shiner in the regional banking space. This past year its share price has improved over 89% and has been showing growing EPS for the past couple of quarters. Milder regulations will only strengthen this company's strong growth.
$ZION: This is another solid bank that has had an exceptional year. They might be in the best position to profit with any compromise to Dodd Frank. Right now systematically important banks are categorized as any banks with over 50 billion dollars AUM. Zion is around 64 Billion which means the narrowly made the cut. Because of this they have hired hundreds of staff positions to deal with compliance and paperwork. One popular measure that seems to have bi partisan support is increasing that threshold from 50 billion. If this is the Case Zion will have a huge cost reduction.
For the financials we are going to focus our sights on regional banks. We are looking at regional banks because they make most of their profits from their loans. Bigger banks such as Bank of America, JP. Morgan etc. will benefit from the deregulation as well, but with so many different revenue streams, not as much as smaller regional banks. Our three picks are:
$KRE: $KRE is the regional bank ETF. Of course this is the go to option when trying to have decent exposure to the regional banks.
$RF: Regions Financial Cop. is a stellar shiner in the regional banking space. This past year its share price has improved over 89% and has been showing growing EPS for the past couple of quarters. Milder regulations will only strengthen this company's strong growth.
$ZION: This is another solid bank that has had an exceptional year. They might be in the best position to profit with any compromise to Dodd Frank. Right now systematically important banks are categorized as any banks with over 50 billion dollars AUM. Zion is around 64 Billion which means the narrowly made the cut. Because of this they have hired hundreds of staff positions to deal with compliance and paperwork. One popular measure that seems to have bi partisan support is increasing that threshold from 50 billion. If this is the Case Zion will have a huge cost reduction.
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