- A major rally is underway in Europe following Sunday's French election. Leading the way are the banks, as the election result seems to assure status quo in the EU. Deutsche Bank (DE:DBKGn) is higher by 10.3%.
- U.S. banks are also outperforming about a rise in S&P 500 futures. Bank of America (NYSE:BAC), Goldman Sachs (NYSE:GS), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Morgan Stanley (NYSE:MS) are all up 2% or more in premarket action.
- KBE +2.6%, KRE +2.7%, XLF +2.25%
- Berenberg's James Chappell overnight said it was time to take profits in Bank of America after its 50% Y/Y run. Higher interest rates, lower tax rates, and eased deregulation have all been priced in, he says, and there could be disappointment coming in each of those three areas. He downgrades to Hold from Buy.
- As for interest rates, the low-rate scare of 2017 could be at an end. After falling as low as 2.16% at one point last week, the 10-year Treasury yield is up another seven basis points this morning to 2.31%.
- Now read: U.S. Financials: A Good Hedge Against Inflation
Original article