DPST: Favorable Outlook For Regional Banks In 2026
Summarize this article with:
Ivo Kolchev1.48K FollowersFollow5ShareSavePlay(11min)CommentsSummaryThe Direxion Daily Regional Banks Bull 3X Shares ETF (has had a volatile 2025, characterized by a steep drop in April followed by a full recovery into year-end.Looking ahead to 2026, expectations for higher GDP growth and a lower unemployment rate should create a favorable backdrop for regional banks.Regional banks offer a sizable 24% P/E discount relative to the broad U.S. financials sector, with EPS growth seen at about 10%.I confirm a Buy rating on DPST, although I do see the rationale of taking profits/switching to unleveraged regional bank ETFs into next year.Significant near-term drawdowns and the U.S. economy underperforming bullish 2026 predictions are key risks in the investment case. georgeclerk/iStock via Getty Images Introduction Despite a challenging macroeconomic backdrop for the U.S. economy in 2025, as evidenced by an increase in the unemployment rate to 4.6% in November, ETFs focused on U.S. financials have had a positive return this year.This article was written byIvo Kolchev1.48K FollowersFollowI ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view.
On Seeking Alpha I mostly cover REITs and financials, with occasional articles on ETFs and other stocks driven by a macro trade idea.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.