Bank stocks are about to face another major challenge

U.S. bank stocks are at a crossroads — trying to regain the momentum they had earlier in the year amid signs that the Trump-trade cornerstones that had spurred the rally are not turning out as planned.

Investors will learn more about where the nation’s major financial institutions stand later in the week, when the sector kicks off second-quarter earnings season. Financials broadly are expected to show profit growth of 6 percent, third-best of the 11 S&P 500 sectors, according to market data tracker FactSet.

“They will figure out a way to hit their earnings numbers, which are relatively low. But the revenue numbers, I think you’ll see some misses,” said Christopher Whalen, head of Whalen Global Advisors and an expert on the industry.

JPMorgan, Citigroup and Wells Fargo all report Friday.

As banks have gotten a boost lately from positive stress test results and plan in some cases to return record levels of cash to investors, the catalysts for more growth nonetheless appear less certain.

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