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Wednesday, January 18, 2017 8:08:25 AM
U.S. Banks: Higher Rates Vs Weaker Loan Growth
* January 17, 2017
Bank stocks have experienced a sentiment-driven surge since the U.S. election, supported by expectations for higher interest rates. Lost in the exuberance has been a marked deceleration in credit creation.
Total bank loan growth has dropped to nil over the last three months, led by the previously booming C&I category. That is a sign that while businesses are expecting an economic improvement, they are not yet positioning for one via increasing working capital requirements. Coupled with increased bank staffing levels, the growth in bank loans-to-employment, a decent productivity proxy, has also dropped to zero. Importantly, the yield curve steepening trend has taken a breather, which may be a catalyst for some profit-taking.
Bottom Line: Our U.S. equity strategists are underweight banks.
https://blog.bcaresearch.com/u-s-banks-higher-rates-vs-weaker-loan-growth
• DiscoverGold
Click on "In reply to", for Authors past commentaries
* January 17, 2017
Bank stocks have experienced a sentiment-driven surge since the U.S. election, supported by expectations for higher interest rates. Lost in the exuberance has been a marked deceleration in credit creation.
Total bank loan growth has dropped to nil over the last three months, led by the previously booming C&I category. That is a sign that while businesses are expecting an economic improvement, they are not yet positioning for one via increasing working capital requirements. Coupled with increased bank staffing levels, the growth in bank loans-to-employment, a decent productivity proxy, has also dropped to zero. Importantly, the yield curve steepening trend has taken a breather, which may be a catalyst for some profit-taking.
Bottom Line: Our U.S. equity strategists are underweight banks.
https://blog.bcaresearch.com/u-s-banks-higher-rates-vs-weaker-loan-growth
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
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