Why I Like Big Banks in 2021
I like big banks (and I cannot lie). I think 2021 could be a solid year for some of the leaders in banking, especially those that are well-capitalized and well-managed. Here's why.
U.S. Financials had a rough 2020, relatively speaking. The sector was down -1.7% for the year, which is very weak compared to the broad S&P 500 (+18.4) and the Technology sector (+43.8). Financials shares have been dragged by rock-bottom interest rates and a flattish yield curve, but I think some upward pressure on the long end of the yield curve could improve the profit picture for major banks in 2021. The 10-year U.S. Treasury has been moving higher and just crossed 1% for the first time since March 2020. I think it will keep moving higher in 2021.
The wall of liquidity building up in the capital markets—due to direct payments from the federal government and hyper-accommodative monetary policy at the Fed—has led to M2 money supply rising at an unprecedented 25% year-over-year rate. This pace is much faster than M2 money supply growth during the inflationary period of the 1970s.
The implication is that rising M2 money supply could give way to inflation in the not-too-distant future, which could start placing upward pressure on interest rates. Upward pressure on interest rates could widen net interest margins at major banks, meaning better profits in the year ahead. I like owning areas of the economy with accelerating earnings.
Below, Tickeron's A.I. runs an analysis of Major Banks, where investors can find trading ideas for some of the best names in the industry.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
Momentum Indicator for GS turns negative, indicating new downward trend
GS saw its Momentum Indicator move below the 0 level on September 09, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 74 similar instances where the indicator turned negative. In 44 of the 74 cases, the stock moved further down in the following days. The odds of a decline are at 59%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for GS turned negative on September 14, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In 22 of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at 50%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GS declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 55%.
The Aroon Indicator for GS entered a downward trend on October 06, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 4 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 14 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
GS may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 4 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 19 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 86, placing this stock better than average.
The Tickeron Price Growth Rating for this company is 60 (best 1 - 100 worst), indicating fairly steady price growth. GS’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 64 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 71 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.432) is normal, around the industry mean (4.351). P/E Ratio (14.149) is within average values for comparable stocks, (30.023). Projected Growth (PEG Ratio) (1.133) is also within normal values, averaging (0.809). Dividend Yield (0.020) settles around the average of (0.016) among similar stocks. P/S Ratio (4.394) is also within normal values, averaging (16.763).
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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General Information
a provider of investment banking, securities and asset management services
Industry InvestmentBanksBrokers
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