Moody's Managing Director Of Financial Institutions Says U.S. Bank Downgrades And Rating Reviews Driven By Profit Outlook; Downgrades Reflect Earnings That Were 'As Good As It Gets' In Q2; Banks Face Challenges From Rising Rates, Potential Recession, Funding Costs
Portfolio Pulse from Happy Mohamed
Moody's Managing Director of Financial Institutions has stated that bank downgrades and rating reviews are driven by profit outlook. The downgrades reflect earnings that were 'as good as it gets' in Q2. Banks face challenges from rising rates, potential recession, and funding costs.
August 08, 2023 | 3:42 pm
News sentiment analysis
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NEGATIVE IMPACT
The SPDR S&P Bank ETF (KBE) could be negatively impacted by the bank downgrades and rating reviews driven by profit outlook.
KBE is an ETF that tracks a broad-based, equal-weighted index of US banks. The negative outlook on banks' profits could lead to a decrease in the value of the ETF.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The SPDR S&P Regional Banking ETF (KRE) could be negatively impacted by the bank downgrades and rating reviews driven by profit outlook.
KRE is an ETF that tracks an equal-weighted index of US regional banking stocks. The negative outlook on banks' profits could lead to a decrease in the value of the ETF.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The SPDR S&P 500 ETF (SPY) could be slightly impacted by the bank downgrades and rating reviews driven by profit outlook.
SPY is an ETF that tracks the S&P 500 index. While it is not solely focused on banks, the negative outlook on banks' profits could lead to a slight decrease in the value of the ETF.
CONFIDENCE 75
IMPORTANCE 50
RELEVANCE 60
NEGATIVE IMPACT
The Financial Select Sector SPDR Fund (XLF) could be negatively impacted by the bank downgrades and rating reviews driven by profit outlook.
XLF is an ETF that tracks a market-cap-weighted index of US financial companies. The negative outlook on banks' profits could lead to a decrease in the value of the ETF.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80