Markets

Bank Stocks Look Ripe for a Plunge

Bank Stocks Look Ripe for a Plunge

(New York)

Bank stocks enjoyed a major run following President Trump's election. Then they stalled in March and have been lagging the market since then. Now, they look ripe for a big fall, as they have dropped well below key support levels. Banks seem to be suffering from a number of issues, all related to rates. Treasuries have rallied, the Fed has stalled its hikes, and inflation is low, all a recipe for lower net interest margins at banks. A major part of the excitement that drove the rally in bank shares was hopes for a higher-rate, higher-inflation environment, but that vision for the future is receding quickly.

FINSUM : Given how much the rate outlook has changed from earlier this year, it would not be a surprise to see bank stocks come back down considerably. Their rise was always a bit overzealous, so a decline shouldn't be unexpected.

  • stocks
  • banks
  • rates
  • inflation
  • Trump

    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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