It’s been a nightmarish year for big banks. And the beating might not be over yet.
Stocks of Bank of America, Citigroup and Goldman Sachs all took another hit on Friday, deepening their 2016 slumps further into double-digit territory. Banks have been among the worst performers on the day, dragging the Dow down over 100 points.
Up until last Friday’s ugly jobs report, bank stocks had been on the rebound, buoyed by hope that the Federal Reserve would raise interest rates soon. That would have been huge because banks struggle to make profits when rates are ridiculously low, like now. But the jobs report was a big dud that dramatically lowered the chances of a June rate hike and sent U.S. Treasury bond rates tumbling to insanely low levels.
“The hope of higher interest rates has been at best delayed and at worst derailed,” David Joy, chief market strategist at Ameriprise Financial, wrote in a note.
Read More: http://money.cnn.com/2016/06/10/investing/bank-stocks-worst-year-since-2011/index.html
Source: CNN (10 June 2016)