Bank Stocks Soar as the Sectors Rotate

Imagine if someone told you earlier this year that both Brexit and Donald Trump would win, and the market’s reaction to both would be a big bank stock rally. It sounds crazy, but that’s what exactly happened. A populist pulled off a surprising upset and shares of Goldman have rallied!

Check out this graph of four major banks since Brexit:

On our Buy List, shares of Wells Fargo haven’t done nearly as well, but Signature Bank has gained 28.3% in the last four weeks. The Dow has now rallied for six days in a row. Also, the Russell 2000 just touched its first all-time high in 17 months.

Here’s a look at the Russell 2000 divided by the S&P 500. You can see just how sharply the market has turned its attention to smaller-cap stocks.

Posted by Eddy Elfenbein on November 15th, 2016 at 7:55 am

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