A confluence of factors going against Wall Street banks has their stocks outpacing the declines of the broader market.
One Wall Street analyst is chalking up big banks' stock plummet to prolonged pain in the energy sector stemming from plunging commodity prices. Worse still, he said there is still no end in sight.
"The expectation is that loan losses are going to pick up and wipe out earnings in 2016," said Dick Bove, vice president of equity research at Rafferty Capital Markets. However, he added, "at this moment, [loan losses] are not that bad."
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Until the oil market finds a bottom, Bove said, expect bank stocks' decline to keep outpacing that of the broader market. During Wednesday trading, benchmark West Texas Intermediate trimmed more than 6 percent and fell beneath the $27-a-barrel mark.
Wall Street banks have tens of billions of dollars of exposure to energy sector loans, and have been setting aside hundreds of millions to offset potential losses that are expected to come in the next few months as more lender defaults are anticipated. The longer it takes the commodity to rebound, the greater the potential for banks' exposure.