WFC - Buy banks on weakness - and don't chase Baird says in Q3 update

Baird's Q3 update on U.S. banking stocks finds a mixed set of trends, and it's concluding that it's not the time to chase the stocks - but to buy opportunistically. Credit demand has generally weakened, and core loans have declined quarter-over-quarter: down 0.5% quarter-to-date, and down 5.4% year-over-year. The firm expects that loan growth to stay soft in the near term, as corporations look to tap large cash buffers to fund their working capital and capital expenditures needs before turning to banks. Meanwhile, certain cyclical fee businesses - mortgage, investment banking, trading - are seeing volumes trend lower. On the positive side, banks are still gaining new deposits, "credit quality remains solid, and several fee items such as card and wealth should continue holding up." And investor sentiment is sticking relatively high in spite of near all-time low interest rates, and "muted" loan growth. "We do expect long-term interest rates

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Buy banks on weakness - and don't chase, Baird says in Q3 update