Investors are eagerly anticipating the release of the U.S. government's stress test results Thursday where a number of the 19 banks reviewed are expected to require fresh capital. Ahead of this, experts tell CNBC to be cautious when investing in the sector.
Be Cautious with Financials
Financials are not out of the woods but progress is being made as quantifiable data is coming from the sector to help investors determine how deep the hole is, says Stephen Wood, senior portfolio strategist at Russell Investments.
Approach Banks with Caution
From a long-term perspective, banks have value, says Ron Cameron, senior analyst at Ord Minnett. He tells CNBC that investors should take a cautionary stance when buying banks in the next 6-12 months.
Prolonging the Recovery Process
The improvement of the financial condition of the U.S. financial system might take longer than previously thought because two key issues aren't being addressed. Nouriel Roubini, co-founder & chairman at RGE Monitor tells CNBC what they are.
Is the US Doing the Right Thing with Banks?
A decade ago, Asia was told to tighten their belts and not to bailout their banks. Nouriel Roubini, co-founder and chairman at RGE Monitor, tells CNBC that now the U.S. is doing the complete opposite.
Stress Tests Aren't Stressful Enough
Nouriel Roubini, co-founder & chairman at RGE Monitor, also known as Dr. Doom, doesn't put a lot of credibility into the U.S. bank stress tests. He tells CNBC that the tests aren't stressful enough.
The Problem With Excess Capacity
The recovery of the global economy will be weak as the excess glut of capacity will take a long time to work out, says Nouriel Roubini, co-founder & chairman at RGE Monitor.
Driving Through a Different Landscape
A new competitive landscape will unfold in the auto sector in the next 2 years, foresees Hans Roehm, global managing partner, manufacturing industry at Deloitte Touche Tohmatsu.
China Won't Be Asia's Locomotive
Josh Felman, assistant director at the IMF, says China's economy is rebounding but its robust domestic demand will not really help Asia because it is shifting from manufacturing investment to infrastructure.
Asia to See Sustained Recovery Mid-2010
Josh Felman, assistant director at the IMF, warns that while recent numbers show Asian economies are stabilizing, do not assume a recovery is round the corner. He is concerned governments will scale back their fiscal stimulus measures too soon.
Stress Tests Under Fire
The US government's stress tests aren't stressful enough and the results won't be significant, Richard Cookson from HSBC told CNBC ahead of the results Thursday.
How Reliable are the Stress Tests?
The US government's stress tests look increasingly like an effort to reassure investors that banks won't be nationalized, Duncan Weldon from Senhouse Capital told CNBC.