Wells Fargo says banks are the best economy comeback trade, tells clients to get 'aggressive'

People walk past the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., November 10, 2020.
Carlo Allegri | Reuters

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This week's outperformance for bank stocks could continue as the economy recovers, and it's time for investors to buy in, Wells Fargo said in a note to clients Wednesday.

The KBW Bank Index popped more than 13% on Monday after Pfizer announced that preliminary results of a phase-three trial showed that its Covid-19 vaccine candidate was more than 90% effective. Bond yields have also risen, with the 10-year Treasury note threatening to break above 1% for the first time since March.

Even after that jump, bank valuations are at abnormally low levels and the stocks have upside, Wells Fargo said.