Traders are betting that red-hot bank stocks will surge even more

Business Insider executive editor Sara Silverstein breaks down the red-hot quarterly earnings reports turned in by the biggest Wall Street banks, and while their stocks weren’t immediately boosted as one might expect, traders are pricing in future strength. In the Fidelity Insight of the Week, Silverstein outlines a recent report from fund manager Matthew Fruhan, whose large-cap stock fund has been significantly overweight the financial sector over the last few years. Fruhan said that the sector was out of favour for a while because the market undervalued the earnings potential of many banks, but that they have since recovered.

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