Global bank stocks show strong underlying trends
The bull case argued for global banks is that their underlying technical trends remain exceptionally firm despite near-term overbought conditions.
The argument
The guest argued that global banks in the US, Europe, and Japan have reclaimed leadership since mid-May. He noted that even with JGB yields rising, Japanese banks continue to perform well, and public credit conditions remain highly benign.
The thesis, stress-tested
✓ What validates it
- ✓Continued benign public credit spreads
- ✓Small and MidCap regional banks breaking out to new multi-year highs
▸ Risks discussed
- ▸Near-term overbought conditions could lead to a seasonal correction in August or September
Hear it yourself
"And from Ran here. And you know, our kind of main point here is when you look at kind of the setup of the bank stocks into earning season, they are on very sound footing. Are they overbought in the near term, Yeah, they probably are. I don't particularly care because the underlying trends are so firm. These are still the relative leaders. After frankly, what. Was a pretty funky, you know, March April period, the banks have really since about mid may come back and reclaim the bar of leadership. And you see it not just domestically."
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