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The stock is gradually trending higher, buoyed in part by its recent deals. Of course, everyone knows that the reason banking stocks are likely to thrive in 2017 is the Fed. On December 14, 2016, the 2-day meeting of the Fed FOMC resulted in a 25-basis point rate hike. That raised the federal funds rate (FFR) from 0.25% – 0.50% to its new level at 0.50% – 0.75%. When you consider that at least 3 rate hikes are expected in 2017, there is plenty of upward momentum in the tank. Every rate hike that is agreed-upon raises the cost of borrowed money. Since banks are in the business of borrowing money, their revenue streams are going to balloon this year.

How Did JPM Get One Up on State Street?

BlackRock was instrumental in accelerating losses of State Street Corporation (STT) when their Q4 revenue declined and the company reported a 3.4% drop. BlackRock announced that $1 trillion in assets would now be placed in custody of JPMorgan Chase & Company Incorporated. Because of this news, STT stock dropped 7.5% +. This is a significant asset portfolio adjustment, given that State Street ranks #2 in the world as a custody bank with some $28.8 trillion of assets under its control.

State Street has been controlling BlackRock’s assets since 1988, and it will continue to preside over the company’s iShares ETF assets. Over the past quarter, State Street’s revenues increased by $2.53 billion, down 3.4% year on year. Of course, JPM is smiling all the way. Presently, JPM has an estimated $20.5 trillion under its custody, and the $1 trillion deal will increase that by just under 5%. This is a big positive for traders looking to find direction with the stock.

What Should Binary Options Traders Be Looking for with Banking Stocks?

Things to look out for with banking and financial stocks like JPM:

• Deregulation of the corporate sector will free up companies from restrictive government bureaucracy and allow business to prosper.
• Lower corporate and personal income taxes will allow US banks and financial institutions to invest more of their money in the US and employ more people. Tax rates in the region of 15% – 20% have been bandied about.
• The repeal and replace of Obamacare will go a long way towards removing burdensome regulation on banks with employees.