U.S. stock indexes reached new highs on Monday, getting a boost from a financial sector that might just be starting to heat up. Compelling valuations, the possibility of easing regulations and the potential that the Federal Reserve is rethinking its strategy were all cited as reasons by Jason DeSena Trennert why his firm, Strategas Research Partners, is now especially bullish on financial stocks, according to Barron’s.

Four financial favorites of Strategas are JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C) and E*Trade Financial Corp. (ETFC). Year to date, JPMorgan is up over 13%, Bank of America is up more than 18%, Citi is up more than 21%, and E*Trade is up over 26%. (To read more, see: Betting on Bank ETFs.)

Compelling Valuations

Considering price-to-earnings ratios (P/E Ratio) and price-to-book ratios (P/B Ratio), JPMorgan, Bank of America and Citigroup definitely look compelling. E*Trade, not so much.

The average P/E ratio and P/B Ratio of the Financial Select Sector SPDR Fund (XLF) is 16.5. JPMorgan, Bank of America and Citi, all three of which are components of the XLF, have P/E ratios below the average at 14.4, 14.4 and 15.5, respectively. E*Trade’s P/E ratio is 20.5.

Only Citi, at 0.97, and Bank of America, at 1.09, have P/B book ratios below the XLF average of 1.44. However, JPMorgan’s is close at 1.53, while E*Trade’s is further stretched at 2.07.

All three of JPMorgan, Bank of America and Citi, recently reported their Q3 earnings and all three beat Wall Street analysts’ forecasts, despite weaknesses in fixed-income trading revenues. E*Trade is scheduled to report Q3 earnings on Thursday.

For JPMorgan, it was their community and community banking as well as corporate and investment banking divisions that drove earnings beyond estimates. Despite weak trading revenues, Bank of America saw 4% revenue growth across their four lines of business driven by a 10% increase in consumer banking revenues. Citi’s earnings beat was driven by a 9% year-over-year increase in its Institutional Clients Group business.

Regulatory and Policy Environment

While E*Trade’s valuation may not be as attractive as the other three banks, all financial stocks would get a boost from tax reform and a more lax regulatory environment.

President Donald Trump’s plans to cut the corporate tax rate would mean that all of corporate America would be able to keep a greater share of their gross profits. (To read more, see: Trump Tax Plan ‘As Good as It Gets’ for US Banks.)

Randall Quarles’ recent confirmation as the Federal Reserve Board’s newest Vice Chair for Financial Regulation will likely usher in an era of less stringent bank stress tests, while the Fed has already been looking for a more lax interpretation of the Volcker Rule

On top of that, Trump is currently in the process of trying to choose the next Fed Chairperson, with Janet Yellen’s term up in February. A new Fed leader could bring about a complete turn around in Fed policy.