The big US banks are emerging from the tail to the protagonists of the stock market, recovering from the lows led by the pandemic crisis, as investors expect a large increase in fiscal spending in 2021.
Whether they maintain this momentum will depend on the success of the agenda of new US President Joe Biden, the monetary policy of the Federal Reserve and how quickly the Covid-19 pandemic will be addressed. Last month, Janet Glenn's election to the top job at the US Treasury Department and the decision to give the green light back to treasury bills contributed the most to the return of the banking industry, which benefited the most from both the increase in acquisitions and mergers as well as stock exchanges.
The KBW index for banks strengthened 8.4% in January, well above the 1.8% rise in the S&P 500 index. Vaccine optimism and a shift in value stocks from growth stocks boosted stocks in both large and small US banks. And now that the corporate results period for the last quarter of 2020 is opening, the stock movement will have less to do with the results of the quarter and more with the prospects of 2021, as some analysts typically report.
"US banking stocks are once again attractive, thanks to optimism about support measures, infrastructure spending and better capital returns," said Richard Ramsden, a Goldman Sachs analyst. "The best is yet to come," said Erika Nayarian, an analyst at BofA, referring to 2021, which she believes will be a strong year for bank shares.