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Quarter-End Insights

Our Outlook for Financial-Services Stocks

Investors should continue to pick their spots carefully in the financial-services space.

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  • Most European banks remain thinly capitalized, compounding the risks associated with the ongoing sovereign debt crisis on the continent.  
  • J.P. Morgan Chase's announcement of a large trading loss reinforced our view that large money center banks are riskier than regionals. However, these firms are also cheaper.
  • Slow improvement in the U.S. economy could be overshadowed by growing problems in Europe and China, leading to volatile markets. This should continue to benefit diversified asset managers. 


Jim Sinegal has a position in the following securities mentioned above: BLK. Find out about Morningstar’s editorial policies.