Bank Sector Is Stabilizing: Piper Jaffray COO
Financials weighed heavily on the broader market Thursday amid the mounting foreclosure mess and following mixed reviews on JPMorgan earnings. Piper Jaffray President and Chief Operating Officer Thomas Schnettler shared his outlook on the banking sector and how business is doing at his own company.
"Right now the [bank] stocks are trading on the mortgage mess," Schnettler said.
"But with a little longer-term perspective, I do think there is stability in the sector. Corporate credit is improving. Underlying business fundamentals are reasonable."
Within financial services, Schnettler points to mortgages as the number one issue at hand, but sees stable business down the line that reflects a recovering economy.
While the domestic U.S. market is on a slower track, the overall mergers and acquisitions market is improving and "set up to see accelerated activity." (Jon Najarian sees M&A plays out there, too.)
As for the rest of the earnings season, Schnettler says he is "relatively bullish" and expects to "continue to see some good corporate earnings."
With positive results from bellwethers such as Intel and CSX, Schnettler sees investors coming off the sidelines and favoring stocks again.
At his own firm, Schnettler says he expects an "accelerated pace" of advisory activity as corporations get ready to deploy the cash sitting on their balance sheets. Investment banking makes up about a third of Piper Jaffray's business.
More on Mortgage Mess:
- Bank Stocks Slammed as Foreclosure Crisis Grows
- 'Mortgage Loan Pools' Looming Over Big Banks
- 'Fast Money' Traders: Will Banks Derail the Bulls?
CNBC Data Pages:
Thursday's Top Dow Gainers (as of this writing):
No immediate information was available for Schnettler or his firm.