CADE - Jefferies sees better times ahead for Financials with rate hikes tapering on horizon

Jefferies equity strategists map out their reasons for going bullish on Financials in a recent report. With the U.S. yield curve steepening in the past two months and the U.S. breakeven curve flattening from deep inversion, "the market is beginning to recognize that both tapering and the rate cycle are appearing on the horizon," write the strategists led by Global Equity Strategist Sean Derby. U.S. bank stocks have been treading water during that time as forward earnings revisions have been stable. And before the Delta variant, surveys were indicating a shift to a lending cycle from an impairment phase, they noted. In the past six months, the SPDR S&P Bank ETF (NYSEARCA:KBE),  SPDR S&P Regional Banking ETF (NYSEARCA:KRE), and the Nasdaq KBW Nasdaq Bank Index have lagged the S&P 500 as seen in the chart below. "The environment for financials appears to be improving and the catalyst for performance from

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Jefferies sees better times ahead for Financials with rate hikes, tapering on horizon