Proprietary Data Insights
Financial Pros Top Bank Stock Searches This Month
As I write this in Los Angeles, it’s difficult to find gas below $6.00. With prices firmly over four bucks a gallon in every state, JP Morgan predicts a national average of $6.00 by summer’s end. Do the math and I guess we’ll be paying close to, if not $8.00 in California.
It’s Even Worse With Mortgages
Nationally, you’ll pay $2,242 a month on a 30-year mortgage for a $425,000 home. This math assumes a 5% down payment.
In Southern California, these numbers are simply mind-blowing, even when you up the down payment to 20%.
Here’s what you’ll pay across SoCal, based on each county’s median home price and a 30-year mortgage with 20% down.
Pretty much every number you see there is an all-time record.
Want A Bargain?
You can see why some people are moving from California. And why renting might just be easier on your pocketbook, despite record prices on that side of the housing market as well.
Financial Pros Top 10 Bank Stock Searches This Month
When you subscribe to The Juice, we give you frequent peeks into our proprietary Trackstar database, which keeps track of the stocks, ETFs, and cryptocurrencies financial pros and everyday investors are searching for.
Last week, we highlighted stocks with surging interest. Today, we reveal the top 10 bank stock searches and offer some color around a select few.
In each analysis, we focus on net interest income (NII) – the difference between the interest banks earn on assets, such as loans, and the interest they pay out. Rising interest rates drive NII and represent one factor that might help some bank stocks perform well in the present environment.
#1 Citigroup (C)
Of the big banks, we focus on today, Citi’s NII increase was most modest – 3.4% year-over-year. And its guidance on the metric most conservative. On its April earnings call, Citi said it expects a low single-digit increase for the current quarter.
#3 Wells Fargo (WFC)
Source: Wells Fargo
Wells Fargo provided super upbeat NII guidance on its recent quarterly earnings call:
Given our current expectations for higher loan growth and recent forward rate curves, net interest income for full year 2022 could be up mid-teens on a percentage basis from 2021.
Mid-teens guidance is nearly twice what Wells was expecting just a few months ago.
#4 Royal Bank of Canada (RY)
In terms of inflation, housing, and interest rates, Canadians are dealing with an environment just about as harsh as Americans.
So, as you’d expect, the NII story looks alike north of the border.
Source: Royal Bank Of Canada
RY does some business in the U.S., but is Canada’s #1 bank, based on market cap.
NII came up 26 times on HSBC’s recent earnings call. And, like Wells, the bank is bullish. In fact, HSBC expects to see the impact of increasing NII into and beyond 2023 with near-term growth “in excess of sort of mid-single digits.”
The Bottom Line: While net interest income is just one metric you can use to judge a bank stock, it’s an important one, particularly with interest rates rising not only in the US, but in Canada and elsewhere in the world.
It’s also a long-term story. Therefore, if you’re looking for a place to invest for the future, big banks might be a place to look.
Our Trackstar data helps to get us thinking about the stocks investors care about. It also helps generate ideas, The Juice can present to you. From there, conduct further due diligence to ensure specific stocks and sectors work in conjunction with your personal financial situation and near- and long-term investment goals and objectives.
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