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The Zacks Analyst Blog Highlights: Zions Bancorporation, State Street, Pinnacle Financial Partners and Western Alliance Bancorporation
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For Immediate Release
Chicago, IL – September 14, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Zions Bancorporation (Nasdaq:(ZION - Free Report) – Free Report), State Street Corporation (NYSE:(STT - Free Report) – Free Report), Pinnacle Financial Partners, Inc. (Nasdaq:(PNFP - Free Report) – Free Report) and Western Alliance Bancorporation (NYSE:(WAL - Free Report) – Free Report).
On Sep 12, the Financial Select Sector SPDR (XLF) increased 1.1%, leading gains for the markets on a day when benchmarks hit record highs. Gains for financials and banks in particular were powered by rising Treasury yields. These gains came on the back of a strong selloff in Treasurys on Monday, which occurred after the impact of Hurricane Irma was much lower than feared. Additionally, a widely anticipated North Korean missile test failed to materialize.
Replacing these lingering concerns was a couple of encouraging developments. U.S. job openings surged to a record level and Treasury Secretary Steven Mnuchin provided encouraging comments on tax reforms. This indicates that investors’ appetite for risk will only rise in the days to come, leading to a further spike in yields. Adding select bank stocks to your portfolios looks like a profitable option at this time.
Geopolitical Fears Subside, Irma Impact Less than Feared
Ultimately, the impact of Hurricane Irma was less than feared earlier. Also, after a widely anticipated missile test from North Korea failed to materialize, geopolitical tensions subsided substantially. As a result, the yield on the 10-year U.S. Treasury Note increased by 4.5 basis points to 2.171%, a level not witnessed since August. Yields on the 30-year and 2-year Treasury notes also increased to 2.774% and 1.335%, respectively.
Tuesday’s spike in yields followed a strong selloff in Treasurys on Monday. On this occasion, a sharp selloff in bonds ensued with investors forsaking safe-haven assets for riskier investment options. Consequently, the 10-year yield increased to 2.125%, marking the largest single day gain since Jul 25.
Tuesday’s increase takes the weekly increase for the 10-year Treasury note to more than 11 basis points. The rise in yields boosted the likes of Goldman Sachs and JPMorgan Chase, which gained 2.2% and 1.2%, respectively. Since banks lend over the long term and borrow for shorter periods, an increase in the long-term yield is beneficial for them. This boosts net interest margin, an important profitability metric for the banking sector.
An increase in rates and better prospects for the banking sector are generally accepted as a sign of economic strength. Data released on Sep 12 seemed to back such an inference, with U.S. job openings hitting a record level in July. With the metric increasing from 6.12 million to 6.17 million in July, job openings have now exceeded the 6 million mark for two successive months. This is first such occurrence since the inception of this particular Department of Labor report. Additionally, data from the Census Bureau has revealed a significant year-over-year increase in income levels.
Meanwhile, Treasury Secretary Steven Mnuchin has offered encouraging comments about tax reform efforts. Speaking at an investment conference in New York, Mnuchin said he was hoping that the Republican Party would be able to push tax reforms through Congress within this year.
Further, he revealed that the Trump administration may seek to backdate the benefits of such reform to the beginning of the current year. Such comments provide a firm basis for a further rise in yields.
Our Choices
With the abatement of geopolitical and weather related tensions, investors are looking to reap stronger profits from relatively riskier assets. Encouraging developments regarding the economy are also helping to stoke such optimism.
A selloff in bonds is resulting in a spike in yields, which bodes well for banks. Picking up banking stocks looks like a smart option at this point. We have narrowed down our search to the following stocks based on a good Zacks Rank and other relevant metrics.
Zions Bancorporation (Nasdaq:(ZION - Free Report) – Free Report) offers a wide variety of commercial and retail banking and mortgage-lending financial services.
Zions Bancorp has expected earnings growth of 41.3% for the current year. Its earnings estimate for the current year has improved by 0.1% over the last 30 days. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State Street Corporation (NYSE:(STT - Free Report) – Free Report) is a financial holding company. It provides a range of products and services for institutional investors worldwide through its subsidiaries.
State Street has a Zacks Rank #2 (Buy). The company has expected earnings growth of 16% for the current year. Its earnings estimate for the current year has improved by 0.6% over the last 30 days.
Pinnacle Financial Partners, Inc. (Nasdaq:(PNFP - Free Report) – Free Report) is a bank holding company which owns 100% of the capital stock of Pinnacle National Bank, a national bank operating in the Nashville, TN metropolitan area.
Pinnacle Financial has a Zacks Rank #2. The company has expected earnings growth of 14.3% for the current year. Its earnings estimate for the current year has improved by more than 0.3% over the last 30 days.
Western Alliance Bancorporation (NYSE:(WAL - Free Report) – Free Report) is the parent company of Western Alliance Bank and offers a range of banking products and services.
Western Alliance Bancorp has a Zacks Rank #2. The company has expected earnings growth of 21.5% for the current year. Its earnings estimate for the current year has improved by 0.3% over the last 30 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Zions Bancorporation, State Street, Pinnacle Financial Partners and Western Alliance Bancorporation
For Immediate Release
Chicago, IL – September 14, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Zions Bancorporation (Nasdaq:(ZION - Free Report) – Free Report), State Street Corporation (NYSE:(STT - Free Report) – Free Report), Pinnacle Financial Partners, Inc. (Nasdaq:(PNFP - Free Report) – Free Report) and Western Alliance Bancorporation (NYSE:(WAL - Free Report) – Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday’s Analyst Blog:
Surging Treasury Yields Boost Stocks: 4 Terrific Picks
On Sep 12, the Financial Select Sector SPDR (XLF) increased 1.1%, leading gains for the markets on a day when benchmarks hit record highs. Gains for financials and banks in particular were powered by rising Treasury yields. These gains came on the back of a strong selloff in Treasurys on Monday, which occurred after the impact of Hurricane Irma was much lower than feared. Additionally, a widely anticipated North Korean missile test failed to materialize.
Replacing these lingering concerns was a couple of encouraging developments. U.S. job openings surged to a record level and Treasury Secretary Steven Mnuchin provided encouraging comments on tax reforms. This indicates that investors’ appetite for risk will only rise in the days to come, leading to a further spike in yields. Adding select bank stocks to your portfolios looks like a profitable option at this time.
Geopolitical Fears Subside, Irma Impact Less than Feared
Ultimately, the impact of Hurricane Irma was less than feared earlier. Also, after a widely anticipated missile test from North Korea failed to materialize, geopolitical tensions subsided substantially. As a result, the yield on the 10-year U.S. Treasury Note increased by 4.5 basis points to 2.171%, a level not witnessed since August. Yields on the 30-year and 2-year Treasury notes also increased to 2.774% and 1.335%, respectively.
Tuesday’s spike in yields followed a strong selloff in Treasurys on Monday. On this occasion, a sharp selloff in bonds ensued with investors forsaking safe-haven assets for riskier investment options. Consequently, the 10-year yield increased to 2.125%, marking the largest single day gain since Jul 25.
Tuesday’s increase takes the weekly increase for the 10-year Treasury note to more than 11 basis points. The rise in yields boosted the likes of Goldman Sachs and JPMorgan Chase, which gained 2.2% and 1.2%, respectively. Since banks lend over the long term and borrow for shorter periods, an increase in the long-term yield is beneficial for them. This boosts net interest margin, an important profitability metric for the banking sector.
Job Openings Data, Mnuchin Interview Raises Optimism
An increase in rates and better prospects for the banking sector are generally accepted as a sign of economic strength. Data released on Sep 12 seemed to back such an inference, with U.S. job openings hitting a record level in July. With the metric increasing from 6.12 million to 6.17 million in July, job openings have now exceeded the 6 million mark for two successive months. This is first such occurrence since the inception of this particular Department of Labor report. Additionally, data from the Census Bureau has revealed a significant year-over-year increase in income levels.
Meanwhile, Treasury Secretary Steven Mnuchin has offered encouraging comments about tax reform efforts. Speaking at an investment conference in New York, Mnuchin said he was hoping that the Republican Party would be able to push tax reforms through Congress within this year.
Further, he revealed that the Trump administration may seek to backdate the benefits of such reform to the beginning of the current year. Such comments provide a firm basis for a further rise in yields.
Our Choices
With the abatement of geopolitical and weather related tensions, investors are looking to reap stronger profits from relatively riskier assets. Encouraging developments regarding the economy are also helping to stoke such optimism.
A selloff in bonds is resulting in a spike in yields, which bodes well for banks. Picking up banking stocks looks like a smart option at this point. We have narrowed down our search to the following stocks based on a good Zacks Rank and other relevant metrics.
Zions Bancorporation (Nasdaq:(ZION - Free Report) – Free Report) offers a wide variety of commercial and retail banking and mortgage-lending financial services.
Zions Bancorp has expected earnings growth of 41.3% for the current year. Its earnings estimate for the current year has improved by 0.1% over the last 30 days. The stock has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
State Street Corporation (NYSE:(STT - Free Report) – Free Report) is a financial holding company. It provides a range of products and services for institutional investors worldwide through its subsidiaries.
State Street has a Zacks Rank #2 (Buy). The company has expected earnings growth of 16% for the current year. Its earnings estimate for the current year has improved by 0.6% over the last 30 days.
Pinnacle Financial Partners, Inc. (Nasdaq:(PNFP - Free Report) – Free Report) is a bank holding company which owns 100% of the capital stock of Pinnacle National Bank, a national bank operating in the Nashville, TN metropolitan area.
Pinnacle Financial has a Zacks Rank #2. The company has expected earnings growth of 14.3% for the current year. Its earnings estimate for the current year has improved by more than 0.3% over the last 30 days.
Western Alliance Bancorporation (NYSE:(WAL - Free Report) – Free Report) is the parent company of Western Alliance Bank and offers a range of banking products and services.
Western Alliance Bancorp has a Zacks Rank #2. The company has expected earnings growth of 21.5% for the current year. Its earnings estimate for the current year has improved by 0.3% over the last 30 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.