Citizens Financial Group, Inc. (CFG)

Based in Providence, Rhode Island, Citizens Financial Group Inc. operates as the bank holding company for Citizens Bank, National Association and Citizens Bank of Pennsylvania. As of December 31, 2025, the company had approximately 17,000 employees in 14 New England, mid-Atlantic, Western, and Midwestern states, California, and Florida. It also provides online, telephone, and mobile banking services.

Earnings season accelerates this week, while tech stocks remain under pressure. Last week, the Dow Jones Industrial Average gained 1%, while the S&P 500 lost 2% and the Nasdaq shed 5%. Year to date, the Dow is up 8%, the S&P 500 is up 12%, and the Nasdaq is up 12%. On the economic calendar, there are no top-tier reports due out this week, but Wall Street is starting to gear up for the next Federal Open Market Committee (FOMC) meeting next week. As of Friday, the odds that there will be no change in interest rates were at 83%. On the earnings calendar, highlights include General Electric, Netflix, General Motors, Northrop Grumman, and United Airlines on Tuesday. After that, Meta Platforms, Tesla, Philip Morris, IBM, and AT&T report on Wednesday; Procter & Gamble and Lockheed Martin on Thursday; and American Express on Friday. Turning to economic data, gas prices fell two cents last week to an average of $4.33 per gallon for regular gas. Elsewhere, the Atlanta Fed 3Q GDPNow forecast is unchanged week over week at 3.6%. The Cleveland Fed Inflation Nowcast continues to call for CPI of 3.8% in October, up from 3.7% in for September. Mortgage rates were flat last week, with the average 30-year fixed-rate mortgage still at 7.40%, according to FreddieMac. Taking a deeper dive into performance so far in 2026, a leading industrialized global stock market index, the ETF EFA, is up 7% year to date, while the leading emerging market ETF (EEM) is up 15%. U.S. growth stocks are up 2% so far in 2026 when looking at ETF IWF, and value stocks (IWD) are up 21%. Crude oil continues to be volatile. On Friday, oil was at about $99 per barrel, up 71% for the year. In other asset classes for the year, AGG bonds are down 5%, gold is down 4%, and Bitcoin is down 7%. The U.S. dollar is up 4%, tracking DXY. The VIX Volatility Index was up to about 20 on Friday, in line with its historical average. Turning to sector performance, the list from first to worst so far in 2026 is Energy (+49%), Information Technology (+31%), Healthcare (+14%), Consumer Staples (+12%), Materials (+11%), Industrial (+8%), Real Estate (+4%), Financial (+1%), Utilities (-2%), Communication Services (-4%), and Consumer Discretionary (-5).

Despite bursts of outperformance, small- and mid-cap stocks (SMID) have underperformed large-caps year to date -- as they have over the past five years. But they are edging closer to their large-cap rivals with a year-to-date return of 10%, just two percentage points below the S&P 500. As well, SMIDs may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by trade and tariff issues, fallout from unrest in the Middle East, the Russian invasion of Ukraine, issues in China, or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps, with the P/E ratio on the Russell 2000 SmallCap Index at 17, compared to a trailing P/E of 25 for the S&P 500. Finally, there are long stretches in the record books when SMID stocks have outperformed large-caps. SMID risks do carry risk, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record.

For the past decade-plus, the performance record has favored growth stocks over value. Yet the tide may be changing. In 2025, value stocks and growth stocks had similar returns, with growth advancing 13.8% and value returning 13.6%. More than halfway through 2026, value stocks have climbed 16.8% while growth stocks have returned 5.7%. The post COVID-19 economy gave a lift to some of the cyclical companies (energy and regional banks), and value stocks outpaced growth stocks that year. While growth stocks led for a few years after that, history has shown other instances where value stocks have outperformed. Value stocks tend to be more resilient in times of market uncertainty and higher volatility as they are less likely to overreact to economic news. Another factor, in our view, has been the level of interest rates. If interest rates are high, discount rates will be high, and future profits will be worth less, creating an unfavorable environment for growth stocks. In any event, the value sector is the place to achieve income.