XLF - Bank stocks dip as Morgan Stanley double-cuts BofA and JPMorgan Chase

Financial stocks took a breather today after posting solid gains last week due to optimism over COVID-19 vaccines. Financial Select Sector SPDR ETF (XLF) ended the session down 2.1%.Furthermore, in a Morgan Stanley report upgrading large-cap banks and consumer finance overall to Attractive, analyst Betsy Graseck double-downgraded two megabanks — Bank of America (BAC) and JPMorgan Chase (JPM) — to Underweight from Overweight. Goldman Sachs (GS) got a single downgrade to Underweight from Equal Weight.BAC fell 2.9%, JPMorgan declined 2.7%, and GS dipped 2.1%.Graseck is looking for ~17% upside to the three Underweight stocks. "But on relative basis, that stack ranks at the lower end of our coverage group," she writes.Their lower skew to unsecured loans vs. consumer finance names "limits both their downside going into a recession and their relative upside coming out of one."In other finance names, Morgan Stanley cut Discover Financial (DFS) and SEI Investments (SEIC) to Equal Weight from Overweight.DFS dropped

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Bank stocks dip as Morgan Stanley double-cuts BofA and JPMorgan Chase