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Buying Opportunity in Big Banks?

Financials may be the worst-performing sector year-to-date, but J.P. Morgan thinks the end might be in sight for United States-based banks. Today the firm upgraded Goldman Sachs and Morgan Stanley to a "buy" based on their excellent capital positions.

The European banks, however, are a different story. While J.P. Morgan does not think there is a liquidity crisis, the bank did downgrade Credit Suisse to "neutral." Today on the "Halftime Report" the experts discussed these calls, as well as the financial sector more broadly.

Right now Stephanie Link is looking at Bank of America. It's the cheapest of the big-five, and she likes it at this level. She argues that negative sentiment is already priced in: "valuations are discounting all the bad in oil, all the bad in terms of the markets in general."

Pete Najarian argues that in a year or so Deutsche Bank will be back up at previous levels. But in the immediate future he doesn't think the banks can make the sharp turnaround that J.P. Morgan calls for.

Jim Lebenthal points out that there have been no IPOs through the first six weeks of the year. They will resume once the market comes back, which Lebenthal argues is already happening. This, in turn, will bolster bank earnings and thereby lift prices to more attractive levels.

Trader disclosure: On February 16, 2016 the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:

Pete Najarian: Long AAPL, BAC, BKE, BMY, DIS, DISCA, GE, KMI, KO, MRK, PEP, PFE, VIAB. Long calls AA, AAL, AMJ, BAC, BHP, BX, CHS, DAL, DATA, EBAY, EEM, GDX, HAIN, HBAN, LB, LC, MCD, MSFT, MT, MTG, NRF, SLV, SWN, TWTR, UAL, WEN, WMB, WYNN, YDKN,ZIOP. Long puts DB, EWH, FCX, MRO, MS, RIG, VLO.

Stephanie Link: Long AAPL, ACE, AVGO, BAC, CCL,COST, CRM, CVX, DAL, DLPH, DOW, ESRX, GILD, GOOG, GOOGL, JPM, LOW, LPX, LRCX, LULU, MCD, MGM, MS, PF, PG, PH, PM, PPG, PRU, QCOM, SBUX, SLB, SWK, SYF, TJX,UNH, V, WFC, WHR, WMT.

Joe Terranova: Long VRTS.

Jim Lebenthal: Long AAPL, BA, C, CSCO, DCO, DIS, EEQ, GAIA, GM, INTC, JCP,KMI, MPC, OA, ORBC, PFE, QCOM, QRVO, SPLS, TIF, TRN, WGO.