Kevin O'Leary Talks Interest Rates And His Bearishness On Financials

Investor, businessman and TV personality Kevin O'Leary recently visited Benzinga's headquarters in Detroit, Michigan, to partake in Benzinga's initial Leadership Series event.

Among several topics, including the first steps to take as an entrepreneur, O'Leary delved into interest rates within the context of high expectations of a hike this year.

“I think 10-year goes to 3 percent max, and that’s it,” O'Leary stated. “I’m negative on financials. I think they are going to underperform [although] everyone is really bullish.”

Elaborating a bit on his bearishness on financials, O'Leary added, “You have got a 16 percent pop on equity valuations on small regional banks and 12 percent at money saving banks, [but] nothing has changed: Regulation is still there. There is no additional cash flow. ROAs on the balance sheets are under 6 percent. You have got to wait until he [President-elect Donald Trump] addresses [the] Dodd-Frank [Wall Street Reform and Consumer Protection Act] — which I think comes at 2018.”

He doesn't think the market will bring those price-to-earnings rates higher, he concluded.

“I think you have seen the move in financials, and they are going to do nothing in 2017.”

If you enjoyed these insights, check out O’Leary’s impromptu jam session with a Detroit beatboxing sensation.