U.S. Banks Are Winning

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The U.S. markets are all about beating records highs this year.
As the fourth-quarter earnings are released, U.S. banks are showing stronger than expected results.

JPMorgan & Chase Co. [NYSE: JPM], despite experiencing a fixed income slump, have been reporting rising net income on a year-over-year basis. We expect rising interest rates to continue to support JPMorgan’s revenues as well as the lower tax rates.

Berkshire Hathaway Inc. [NYSE: BRK.B] shares have gained 25.1% in a year and outperformed the industry by 20%. Berkshire’s biggest asset is still Warren Buffett.┬áHis unique skill to create tremendous value for shareholders over the last 50+ years creates positive market sentiment for the companies he is in involved with.

Wells Fargo & Company [NYSE: WFC] shares have also outperformed the industry, despite the scandal. The San Francisco native bank has been focusing on rebuilding its reputation and cost-cutting measures. WFC is one of the largest financial services company in the U.S. with $1.9 trillion in assets and $ 1.3 billion in deposits.

Our analysts are expecting the corporate bottom line of S&P 500 companies to rise by around 15% over the quarter, with a focus on whether 2018 projections will be supported by last year’s overhaul of the U.S. tax system.

Given the strong fundamentals and the bullish trend, we expect U.S. Banks to have an outstanding year in 2018 and encourage investors to pay special attention to those undervalued stocks in the financial sector.

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