The financials pulled off an amazing V-bottom in January, but that rally is now being aggressively questioned. Keefe Bruyette & Woods has an interesting note out skeptical of the rally. They noted:
--The bank stock run in January was based on speculation about potential benefit to banks from aggressive Fed easing: "We think enthusiasm will be ratcheted back as investors revisit fundamentals."
--Large-cap bank stocks are up 6.5 percent year to date versus a 6.1 percent decline for the S&P 500 (!)
--January was the first month in which large-cap banks outperformed the market since February 2007 (!!)
--Relatively high valuations and a high probability of further estimate cuts do not bode well for performance.
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