If you keep up with my daily videos, then you know the top-performing sectors lately have been Energy and Financials.
I bet you also know I’ve been mostly covering energy names.
But because the Financials sector is holding well above its 50-day moving average — and there’s strong potential for even more upside in the near term — today is a great time to talk about the top bank stocks to invest in for fall 2021.
I don’t want to get ahead of myself… so I should warn you that the Federal Reserve tends to overpromise on interest rate hikes and cuts. There’s a good chance interest rates won’t rise as fast as predicted.
But at the same time, sentiment is still there…
So let’s not sleep on these top bank stocks to invest in for fall 2021.
Why Traders Should Invest in Bank Stocks for Fall 2021
In its latest Summary of Economic Projections, the Fed noted that the U.S. economy will grow at a rate of 5.9% in 2021. And steady falls in unemployment claims, a solid housing market and rising consumer confidence are just some of the major factors driving a robust economy.
Even major banks said robust capital deployments — including dividend hikes and share buybacks — were effective in the third quarter.
I mean, during Q3, the S&P Banks Select Industry Index (INDEXSP: SPSIBK) rallied 3.1%! Meanwhile, the exact same index was down almost 12% in 2020…
That’s a big difference, folks…
This tells us that banks are capable of withstanding micro- and macro-economic shock. And today, I’m ready to give you two top bank stocks to invest in for fall 2021 that’ll do well as the economy continues to improve.
2 Top Bank Stocks to Invest in for Fall 2021
The first top bank stock to invest in this fall is US Bancorp (NYSE: USB).
It’s primarily a commercial bank, with income from loans and other consumer banking products making up most of its revenue.
Because UBS doesn’t depend on investment banking, which is the more volatile side of these types of businesses, it’s profitable. And revenue is a little more predictable and consistent than the majority of other bank stocks.
It’s trading just a few dollars away from all-time highs right now, and has a one-year return of about 61%…
So I have a price target on USB of $72 per share over the next three months if the current strength in bank stocks sustains itself… Which is likely considering the Fed doesn’t appear to be changing its projections anytime soon.
But USB isn’t the only bank stock on my list…
The next top bank stock to invest in for fall 2021 is another commercial name. So like USB, it also doesn’t have a major investment banking division.
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