Bank Stocks Remain Risky as More Bad News Looms
Profit warnings from banks hit by U.S. subprime-related losses are likely to continue throughout the quarter, Elissa Bayer, director of private clients at Insinger de Beaufort, told "Worldwide Exchange" Monday.
She said this is likely to increase volatility in shares in the banking sector in the fourth quarter, as financial institutions will continue to report third quarter earnings.
"There is much more to come out," Bayer said "as these banks come out with their figures … there will be more downside, you have to be very careful."
U.S. banking giant Citigroup and Swiss wealth manager UBS joined the growing list of firms revealing a subprime-induced drag on their earnings.
Bayer said volatility was going to stay high: "As more news come out like the UBS story, markets are going to get jumpy."
She suggested the technology and energy sectors could make attractive alternative investments to financial stocks.
"We are positive (on the energy sector) … energy is absolutely the right sector," said Bayer.
Other economists said commodities, precious metals, food and utilities were also high on the list of favorites.