Bank stocks rise nearly 19 percent in November, notch best month in history

Digital display signs on the exterior of the headquarters of Morgan Stanley in New York's Times Square.
Mike Segar | Reuters
Digital display signs on the exterior of the headquarters of Morgan Stanley in New York's Times Square.

November treated bank stocks well.

The SPDR S&P Bank ETF (KBE) gained 18.69 percent for the month, notching its best month in history. Leading the index higher were shares of SVB Financial Group and Bank of the Ozarks, which had both gained around 30 percent month to date, while 60 of 65 KBE components are up at least 10 percent.

The KBE was also on pace to handily outperform against the broader S&P 500, which posted monthly gains of 3.42 percent.

Shares of big banks Morgan Stanley and Goldman Sachs, meanwhile, both spiked around 23 percent, while JPMorgan Chase's shares rose nearly 16 percent.

KBE (blue) vs. S&P (green) in NovemberSource: FactSet

Bank stocks began their ascent after President-elect Donald Trump stunned the world by defeating Hillary Clinton in the U.S. presidential election, as investors zeroed in on the deregulation of the financial sector, one of Trump's points during the campaign.

"We thought we were going to get higher interest rates ... then you get this tail wind after the election," said Mark Spellman, portfolio manager at Alpine Funds. "You're getting a valuation pop not only from higher rates, but from all the things Trump has said he's going to do."

U.S. Treasury yields have also surged since the election, with the benchmark 10-year yield at around 2.4 percent. Heading into the election, the yield was around 1.8 percent.