The financial sector looks favorable after a recent earnings report from JPMorgan Chase (NYSE:JPM) and other factors, a market strategist told Benzinga.
What Happened: An earnings report from JPMorgan was strong and could lead the financial sector going forward, Freedom Capital Markets Chief Global Strategist Jay Woods told Benzinga.
"JPMorgan is the poster child of the financials," Woods said.
Woods said the bank's results were "solid," but investors don't always get a warm fuzzy feeling listening to the earnings call.
JPMorgan CEO Jamie Dimon looks to the future, and uses analogies to provide cautious outlooks and worst case scenarios, Woods added.
"Jamie Dimon, he's the ultimate trader."
Woods said JPMorgan never spikes the football, even after solid results.
JPMorgan is hitting new all-time highs and is back according to Woods. The stock is leading the way along with Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) in the financials sector.
Woods told Benzinga that of the 10 largest stocks by market capitalization, Berkshire Hathaway is the one trading positive and outperforming in recent weeks.
The financial sector "is just joining the party," Woods added.
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What's Next: Woods said that financials look strong going forward after the recent earnings reports and given past trends.
"The trends tend to continue for a long time."
A fun fact shared by Woods with Benzinga is the SPDR Select Fund – Financial (NYSE:XLF) has only traded higher in 15 of its 25 years in existence.
While it has been down in 10 of the years, Woods shared that the outperformance in the up years is strong.
"When it's up, an average of 21.5% a year."
The Financial Select Sector ETF is up 15.9% year-to-date, though it remains below its average. "I think financials are looking favorable," Woods said.
Another potential positive for the financials going forward is a return of Donald Trump to the White House, Woods said.
Woods said Trump is good for financials, as regulations could wane under the former president.
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Photo: Benzinga and Midjourney