Q4 Earnings Reports From Financials Put Recession Fears To Rest

2026-02-02 14:02:22 ET

Shares of financial stocks State Street Financial Sel Sec SPDR ETF ( XLF ) have been an underperformer over the past year, mostly treading water aside from the brief dip and rally post-Liberation Day. Given their highly regulated nature and capital requirements, they cannot match the growth seen in AI-driven tech stocks, and their earnings can be greatly influenced by macro conditions with fears percolating at varying points about rising consumer losses, private credit problems, and the impact of Fed rate cuts. However, with most of the sector having reported earnings, financials are fundamentally performing quite well and signaling a positive outlook for the economy. That leaves me bullish on the sector....

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