Hurdles ahead as big US banks beat expectations | Ausbiz

Isaac Poole from Oreana Financial shares his insights on the US banking sector, stating that the results were better than expected and demonstrate the industry’s resilience. Isaac explains that the coming year will be challenging with interest rates moving higher in the US, affecting loan quality and credit provisions, which may negatively impact earnings outlooks for the financial sector in 2023. Additionally, Isaac compares the Australian banking sector to the US, noting that both economies are facing slowdowns due to interest rate hikes. He suggests this could lead to a decrease in credit quality and a looming mortgage cliff, which may not yet be priced in.

Regarding China, Isaac acknowledges that the country’s recovery has been somewhat underwhelming, lacking a sharp V-shaped recovery seen in other economies. He anticipates China will exceed growth targets and undergo a protracted recovery cycle that will positively affect the equity market, including material stocks. Finally, Isaac recommends investors consider Chinese equities, especially for those with high-risk profiles, despite potential risks associated with Chinese assets.

(Source: Ausbiz)

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