Banks stocks fell further than the overall market yet again Thursday, as concerns about negative interest rates, the energy sector and other matters showed no signs of abating.
The KBW Nasdaq Bank Index closed at 56.51, down 4.18% from the previous day and 29.32% from the end of 2015. The index hit its lowest point since April 2013. Meanwhile, the S&P 500 dropped 1.23% during the day’s trading, closing at 1,829.08.
Citigroup and Bank of America led the broad decline among banks, with shares of each down more than 6%. Citi fell 6.60% to $34.96, their lowest since November 2012. Bank of America slipped 6.93% to $11.15, which was also three-year low.
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Other countries have already lowered interest rates below zero, and the financial stability concerns of such a policy taking shape in the U.S. should not be dismissed.
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Evans, soon to retire as CEO of Cullen/Frost Bankers, believes his company is well positioned to withstand the fallout from low oil prices. He is advising his successor to avoid the temptation to panic and focus on the long view.
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Federal Reserve Board Chair Janet Yellen faced tough questions Wednesday by House Financial Services Committee lawmakers over the central bank's regulatory treatment of big banks.
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JPMorgan Chase and Wells Fargo fared somewhat better. Wells shares dropped 2.23% to $45.14, and JPMorgan shares declined 4.50% to finish the day at $53.02.
Major regional players also felt the market’s sting. U.S. Bancorp in Minneapolis dipped 4.07% to $37.45, and SunTrust Banks in Atlanta fell 4.52% to $31.36. Additionally, Detroit-based
The day’s sell-off was preceded by a similarly disappointing day for European bank stocks, which fell once again after recovering a bit the day before.
Globally, banks are feeling the pain from low interest rates and falling oil prices. Additionally, uncertainty has cropped up about the Federal Reserve’s plan to raise rates in the future following Chair Janet Yellen’s testimony before Congress both
Overseas, Sweden’s central bank, the Riksbank, cut rates into negative territory, following the lead of other central banks including the Bank of Japan.
