Large U.S. banks have experienced a significant correction ahead of third-quarter earnings season. Goldman Sachs fell 15%, Bank of America tumbled 16%, Morgan Stanley dropped 13.7%, JPMorgan declined 7% and Wells Fargo fell 9% over the past month, while the Invesco KBW Bank ETF plunged 12% from its mid-August high. This correction stems from investor concerns over a more hawkish Federal Reserve and rising Treasury yields, which could weigh on lending activity and economic growth. However, analysts at MAI Capital Management and RBC Capital Markets view this decline as a buying opportunity, noting that fundamentals remain strong and the U.S. economy is not in a recession. Gerard Cassidy (RBC) highlighted specific opportunities in Wells Fargo, Bank of America, KeyCorp and PNC, which should benefit from commercial lending growth and rising interest rates.
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