Another tough day for bank bears. On the heels of better than expected earnings from Citi and BB&T most banks are trading on the upside today. Following upside surprises from JP Morgan, Goldman Sachs, and Wells Fargo, bank stocks are again posting gains for the week:
Citigroup up 28 percent
Fifth Third up 23 percent
SunTrust up 25 percent
M&T Bank up 8 percent
Wells Fargo up 2 percent
This is the 6th consecutive weekly gain for the Bank Index, which is up 108 percent since the bottom in early March.
It wasn't supposed to happen this way — bears were quite sure there would be selling into bank earnings this week.
This has left bulls happy, and bears in a state of apoplexia. Bears are insisting:
- earnings quality has been poor
- there are lots of one-time gains
- credit continues to worsen
Bulls are content to point out that the metrics that matter — Tier One Capital and Tangible Common Equity (TCE) have been improving for most banks, and that mortgage refinancings and trading (particularly fixed income) have led the way.
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