U.S. bank stocks are rising on the hope that the economy is slowly bouncing back after a lockdown due to the coronavirus pandemic.
Four major U.S. banks, including Wells Fargo & Co (NYSE: WFC), Citigroup Inc (NYSE: C), Bank of America Corporation (NYSE: BAC) and JPMorgan Chase & Co (NYSE: JPM), are seeing a rise in their stock value. The increase in these U.S. bank stocks is as a result of plans to reopen the U.S. economy, after a total shutdown because of the coronavirus pandemic.
U.S. Bank Stocks
With the stock market looking very good on Monday, the financial sector recorded big wins, as these four US banks posted gains. Wells Fargo, Citigroup, Bank of America and JPMorgan banks have all experienced positive shifts in their stock value.
Wells Fargo (WFC) rose nearly 9% yesterday, closing at $25.41. Currently, at a premarket price of $25.27, it lost 0.55%. WFC has not been profitable in recent times. It has lost nearly 46% in the last 3 months and about 53% in 2020 alone. In the past 5 days, however, it has climbed more than 5%.
Citigroup (C) also climbed about 9% yesterday and closed at $46.67. Just like WFC, it has also lost some of its steam and is currently in premarket at $45.42. Citigroup has lost nearly 43% in 2020 alone, but has gained 9.86% in the last month.
Bank of America (BAC) climbed 6.95% yesterday and closed at $22.93. Currently, at $22.80 in premarket, it has climbed 5.96% in the last month. Generally, Bank of America is on its way to regain its 2020 loss of nearly 35%.
JPMorgan (JPM) rose by more than 5%, yesterday, closing at $90.45. Just like the others, JPM has since Thursday, JPM has gained 4%.
The rise in prices is encouraging for investors and shows that the financial market is ready to recover from the effects of the pandemic.
What Next for Investors?
Major biotech company Moderna Inc (NASDAQ: MRNA), announced encouraging results for its COVID-19 vaccine candidate on Monday. While the results are only from the early-stage clinical trials, general optimism is currently at a high. There is also the possibility that in general, COVID-19 has peaked in the U.S. While the country is still recording new cases, the improvement in infection and death rates are encouraging for the financial market.
The rise in bank stocks in particular, is good for the economy. According to CFRA Chief Investment Strategist Sam Stovall, banks are crucial to the growth of the economy, even in a crisis. Stovall said:
“I think a bounce in banks is good in general…Usually the financials in general, the banks in particular are the canary in the coal mine because the economy really can’t grow unless the banks are lending. If investors believe people will not be borrowing then they will be borrowing then they have a lot of problems.”
Federal Reserve Chairman Jerome Powell has also said that the agency will do more to help the economy. Coupled with the optimism from the coronavirus vaccine, a lot of respites is now on the horizon.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.