Despite worries about the global economy, the rapidly unfolding Libor scandal and pressure from regulators around the world, this is a good time to buy U.S. banking stocks, according to Dennis Gartman, author of The Gartman Letter.
“The piano just about hit the ground on Friday,” he told CNBC’s “Squawk Box Europe” Monday.
“Markets are dependent on psychology as much as numbers. The psychology has got as deeply blackened as it might, and the silver lining is about to show. This is a good time to be buyer of banking stocks.”
Gartman told CNBC in December that banking stocks had hit their bottom following a round of downgrades by ratings agency Standard & Poor’s. His prediction has had mixed success – while JPMorgan and Wells Fargo, for example, have risen since then, Citi has fallen amid worries about a deep recession in Europe.
JPMorgan has recently suffered following the "London Whale" trading incident, which has cost it $5.8 billion in 2012 so far on bad bets in the derivatives market.
“It’s in the market, it’s done, we can probably move on,” Gartman said.
“There’s never just one cockroach. Once the problem is announced it usually gets worse until you have the final number. Mr Dimon has a lot more explaining to do to the public.”
He added that he thought recent better-than-expected Wells Fargo results were “reasonable.”
“The worst is behind, better times lie ahead (for banks),” Gartman said.
Emerging markets will be key for the big international players as developed markets like Europe stymie, with negative interest rates in countries like Denmark, Gartman believes.
“The Citis of the world have no choice but to continue to expand in emerging markets. We have to see more of that going forward,” he said.
