The top U.S. indices have gained momentum on the back of a limited deal that is closing between the United States and China. The ongoing trade war between the two economic superpowers has rattled markets, which is why even a small breakthrough has encouraged traders. However, investors should temper their expectations.
The World Trade Organization (WTO) and International Monetary Fund (IMF) have both warned of slow growth as we move into the next decade. Central banks in Europe and the United States are turning back to monetary easing, but the effectiveness of this policy may be limited in the face of broader headwinds.
Today I want to take a quick snapshot of two bank stocks that Iām looking to avoid and target in late October.
Goldman Sachs (NYSE:GS). The stock has dropped 3% over the past three months. Shares last had an RSI of 60, which puts it close to technically overbought territory even after this stretch of weakness. The stock has climbed 28% in 2019 so far.
In the third quarter, Goldman missed profit estimates at $4.79 per share and its investing and lending division posted the largest miss.
Bank of America (NYSE:BAC). Shares of Bank of America have climbed 6% over the past three months. The bank put together another earnings beat as net income rose 4% year-over-year to $7.5 billion in Q3 2019.
Three of its four main division posted an increase in revenue. Revenue in its global banking business climbed 8% to $5.2 billion. The stock boasts a solid price-to-earnings ratio of 11.5 and a price-to-book value of 1.1. Shares have an RSI of 72 at the time of this writing, putting it in technically overbought territory.
