FCFS - Jefferies strategist lifts view on U.S. banks consumer finance to 'bullish'

Jefferies global equity strategist Sean Darby improves his outlook on U.S. banks and consumer financial stocks to "bullish" from "modestly bullish" as "improved visibility towards a successful coronavirus vaccine, easier lending conditions, little evidence of deflation and a sentiment switch from growth to value will lift U.S. bank shares through 2021."The S&P 500 Banks Index gains 1.4% in midday trading in New York; S&P 1500 Composite Regional Banks Index rises 0.6%, and the S&P 1500 Composite Consumer Finance Index climbs 1.6%.Banks, which are particularly sensitive to economic growth, have set aside more than $110B, "a huge safety cushion," for loan losses since the pandemic started.Furthermore, bank stocks tend to hit bottom when revenue expectations outpace provisioning costs; the inflection tends to coincide with accelerating economic data and the easing of deflation fears and real negative interest rates, he said.S&P 500 Banks Index (orange) and S&P 1500 Consumer Finance Index (purple) underperform the S&P 500 (blue)

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Jefferies strategist lifts view on U.S. banks, consumer finance to 'bullish'