Banking on a Recovery: Wells Fargo & Co (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM)

Speaking about prices, they seem to have bottomed too. Prices tend to move in a self-reinforcing way: once it becomes clear that the market is recovering, people start accelerating their bids in order to buy before it gets more expensive. This should especially be the case now that mortgage rates are at historically low levels thanks to the Fed´s intervention.

Bottom Line

Banks have been on a tear lately, but this move was not disconnected from their fundamentals. On the contrary, things are looking much better for the sector, both in terms of corporate balance sheets and macroeconomic trends. Valuations are still quite attractive, so the banks are well positioned to deliver strong returns while benefiting from the economic recovery over the years ahead.

The article Banking on a Recovery originally appeared on Fool.com and is written by Andrés Cardenal.

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