Bank Stocks Are Roaring as Growth Outlook Brightens
Prospects for lower interest rates are helping lenders’ shares
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Bank stocks are on a tear on both sides of the Atlantic: In Europe, the Stoxx 600 Banks Index rose 29% in the six months through yesterday, its strongest first half since 1997, while a gauge of financial stocks in the S&P 500 is at a record.
One common theme is lower interest rates. Investors expect the Federal Reserve to cut rates in the US further this year, which could spur lending, while the European Central Bank has been easing to support the fragile economy. (While typically higher rates are favorable for banks, cuts this year are welcome given concerns about a growth slowdown.)