Financial stocks are the best-performing group in 2024, and although they are widely believed to have more room to run as a sector, a subset of them are better off. The S&P 500 is up 36% so far this year, outpacing the communications and information technology services sectors that contain all the high-flying giant tech stocks. In particular, investors expect financial companies to benefit following President-elect Donald Trump's election victory and his promises to liberalize business. This month alone, the group is up 10%, twice the return of the S&P 500. “Basel III,” said Sam Stovall, chief investment strategist at research firm CFRA, referring to global capital requirements. “We have an overweight in financials, and we look to maintain that for some time.” XLF YTD Financial Sector Select SPDR Fund (XLF) in 2024. The technical setup for all financial stocks – which have risen to new highs and are in a bull market – is also encouraging, but this backdrop may particularly benefit the fast-growing financial sector. Technology companies, according to Rob Ginsberg, a technical analyst at Wolfe Research. Ginsburg said fintech stocks will outperform the entire financial sector, represented by the SPDR Financial Sector Select Fund (XLF), as well as bank stocks in the SPDR S&P Bank ETF (KBE), each of which could rise 10% to 15% over the course of The next 12 months. “If this bull market continues, the upside in these fintech names could reach 3-4 times what we see in overall XLF,” Ginsberg said. Block is one example of a fintech name that could thrive, the tech analyst said. He added that the stock last traded at $90, but it could rise more than 75% to $160 a share “easily” by the end of 2025. The stock is a consensus buy on the Street, according to the CNBC analyst consensus tool. PayPal could jump nearly 40% to $125, from about $87, where it was recently trading. Toast is another name that Ginsberg endorses. Financial stocks could be punished first in the event of a correction in the broader market, Ginsberg said. But even with sentiment at high levels, the base case for a bull market is expected to remain intact.
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Financial stocks are the best-performing stocks of 2024. One corner could outperform
