What's up with banks? Since Monday's close, I have noted that banks have been outperforming...a trend that is now stretching into four days, particularly the largest institutions.
Banks this week:
Likely causes for the rally...
Another explanation is that there is still a lot of cash on the sidelines, especially in Europe. One trader noted to me that In Europe, we saw two huge secondary placements last week at almost no discount to market. Gjensidige sold its 20% position ($550 million) to the market at a 3% discount and RBS sold its 28% position in Direct Line ($1.6B) at no discount. I know some Europeans are flush with cash due to the Verizon/Vodafone deal but to place $2B in 30 minutes at little discount tells me there is a lot of cash that still needs to be put to work.
And why is Bank of America a leader? Several traders told me the worst is behind them on the litigation front and there is a belief the core banking business is slowly improving.
—By CNBC's Bob Pisani