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3 Proxies of the Global Banking Environment

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Last week, I tweeted about what I called "globalist stocks" leading the rally in late April. I have to say, I was being a little tongue-in-cheek considering the fact that the current political atmosphere believes all the countries in the world could put up walls and not trade with each other - which, I might add, is very unrealistic. That being said, there is a stark difference between economic interactions and the goal of a "One World Government."

3 Proxies of the Global Banking Environment (JPM, GS, MS)

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The three names I mentioned were JPMorgan Chase & Co. (NYSE: JPM ), Goldman Sachs Group Inc (NYSE: GS ) and Morgan Stanley (NYSE: MS ).

These large money center banks feed at the trough of central bank money. However, if there is one group of names that represents the politicalization of a global economy, it's these three.

Taken together, they're a good proxy of the health of the banking system. JPM and GS are solid picks for longer-term investors, though be aware that they are more fully valued.

In the end, a better global economic proxy is Caterpillar Inc. (NYSE: CAT ), which blew away consensus when it released first-quarter earnings on Tuesday. It was an earnings trifecta, with the company beating on both the top and bottom lines and also raising its full-year outlook.

I've recommended this stock for a while, and my subscribers have already made a lot of money in it, but I suspect it could be on the precipice of a major breakout.

But circling back to banks, I'm more a fan of the regional banks, which remain undervalued. One of my favorites in this group is Zions Bancorp (NASDAQ: ZION ). It reported solid earnings after the close on Monday, and I expect the strengthening economy and higher interest rates will benefit the company nicely.

Management must be confident in higher share prices as well, since ZION repurchased $45 million worth of stock in the last quarter.

All in all, the heartbeat of the economy is humming along much faster than it's getting credit for and I can't wait to see what the rest of the year has in store for us.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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