Jim Cramer’s 10 Reasons Financials Will Rally (C, JPM, HBAN, WFC, ZION, CMA, USB)

Although the financial sector has been underperforming for the past few months, Cramer believes that financials may rally just like last year. The reasons that make Cramer feel so strongly about financials are:

1. Financial institutions are not suffering from huge credit losses and JP Morgan (NYSE: JPM), Zions Corp (NASDAQ: ZION), Huntington Bancshares (NASDAQ: HBAN) and Wells Fargo (NYSE: WFC) are ready to witness a turnaround.
2. Government proposals aimed at reforming the financial sector have slowed down.
3. There is a sudden wave of confidence in Citigroup (NYSE: C), after the bank’s CEO, Vikram Pandit, made his speech in the Congress.
4. The common stock offering by Comerica (NYSE: CMA) and Citi's secondary offering indicate that there is demand for bank offerings. This allowed financial institutions to clean up their balance sheets.
5. Banks, such as US Bancorp (NYSE: USB), JPM and WFC, want to hike their dividends. They are, however, being restrained by the government.
6. The rumor of a collapse in commercial real estate is unlikely to be true. On the contrary, the demand for commercial mortgages is significant.
7. The FDIC has taken over fewer banks than one would have thought possible, considering the amount taken over in the S&L crisis. According to Cramer, bank failures are stopping.
8. With the financial sector not performing well of late, money managers may be ready to pounce on the stocks on any decline.
9. Retail numbers are strong, indicating increase in consumer spending. This is good news for credit card issuers.
10. The continuous rise in the unemployment numbers has stopped. As a result, more consumers will become eligible for credit.

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