Yahoo Finance

The financial sector (XLF) is readying itself for an eventful 2025, with many on Wall Street expecting an uptick in dealmaking amid possible deregulations under the second Trump administration.

Whalen Global Advisors Chairman Chris Whalen sits down with Seana Smith and Madison Mills on Catalysts to talk more about the financial sector. Whalen Global Advisors LLC manages several indexes tracking bank stocks and the financial sector: the WGA Bank Top 10 Index (WBXSW), WGA Bank Top 25 Index (WBXXVW), WGA Bank Top 50 Index (WBLW).

"We like to focus on quality and performance. So I think for the better performers in the group, you could see more expansion, frankly. American Express (AXP) could probably flirt with six times book value next year unless we see a negative come around," Whalen tells Yahoo Finance. "But, you know, I don't see that right now. If anything, you know, we've had three quarters where the banks have moved very much."

Whalen goes on to call commercial real estate one of the "only pain point[s]" for the industry, but warning: "Banks that don't have a lot of consumer or commercial exposures are going to be fine. Banks that specialize in commercial real estate or have historically specialized in multifamily in some of the blue states, some of the larger cities are going to be taking pain."

To watch more expert insights and analysis on the latest market action, check out more Catalysts here.

This post was written by Luke Carberry Mogan.