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People walk inside JP Morgan headquarters in New York, October 25, 2013.
People walk inside JP Morgan headquarters in New York, October 25, 2013.
(Eduardo Munoz/Reuters)

U.S. bank stocks outlook still bright – with two caveats

U.S. bank stocks provided investors with a tremendous 38 per cent return in 2013 and to date, fourth quarter earnings reports suggest more room to run in 2014. Interested investors, however, will have to keep a close eye on the U.S. yield curve.

Investors jettisoned U.S. bank stocks during the financial crisis on justifiable fears that clever accounting was hiding substantial balance-sheet risk. As a result, average valuation levels plunged.