Portfolio management

The looming initial public offering from Swedish payments firm Klarna comes in the foreground of tariff uncertainties and inflationary pressures.

The KBW Nasdaq Bank Index is down more than 7% year to date. Analysts blame confusion caused by President Trump's evolving tariff policies and heightened worries about an economic downturn that could hurt banks' credit quality.

Analysts say lenders' shares could rally on deregulation, lighter tax burdens and a resurgence of M&A. Declining interest rates and lower loan losses could further bolster bottom lines and attract investor interest.

Anticipated interest rate cuts could help stressed borrowers, but such a shift in monetary policy may curb lending income.

Transportation, automotive, healthcare, and commercial real estate are the sectors most affected, but borrowers are doing better than expected.

Bank stocks are up this year as interest rates have leveled off and there are hopes that pressure on lenders' profits could moderate.

Institutions and their investors are facing pressure from climate activists, cautiously awaiting interest rate cuts and adjusting to new Federal Reserve and FDIC policies.

Global financial market euphoria over the last two months of 2023 is overdone, according to members of the International Association of Credit Portfolio Managers, who expect inflation, rates to stay elevated.

The market appears strongly divided, as commercial real estate presents investors with stark choices and big risk-management decisions, often differing by region and by sub-sector.

At the Most Powerful Women in Banking conference, asset management leader Jenny Johnson discussed opportunities and risks for portfolio managers in 2023.