U.S. Bank Stocks May Be Too Hot With Earnings Season Nearing
- KBW Bank Index is up almost 40% this year as lenders thrive
- Bank of America, Morgan Stanley could be priced for perfection
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Bank stocks have been one of the best trades of 2021, and with third-quarter earnings set to kick off on Wednesday analysts expect the industry to show continued strength. The question for the shares, however, is how hot is too hot?
The KBW Bank Index has surged almost 40% in 2021, more than doubling the broader S&P 500 Index’s 17% gain, as investors keep buying lenders amid growing expectations that a U.S. economic recovery will spur the Federal Reserve to scale back is massive asset purchase program and eventually begin raising interest rates.