Banks Could Tank if Rates Break Out

ng.investing.com/analysis/banks-could-tank-if-rates-break-out-176823

By Chris Kimble | Jul 11, 2023 09:41

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It’s always nice to see bank stocks leading the market higher… but it doesn’t always work out that way.

This is why we always let the price action (and patterns) dictate our investment choices.

Bank Index Chart

For most of my career, though, bank stocks have liked rising interest rates.

But for the past 2 years, interest rates have risen nearly 5 percent, and the all-important KBW Bank Index (for bank stocks) has declined nearly 50%.

I have not seen this in my 43-year career.

You can see this in today’s chart, where we compare the Bank Index to the 2-Year Treasury Bond Yield.

As you can see, the 2-year yield is testing its 2007 highs.

As this occurs, a couple of questions come to mind… what if interest rates peak here, what will banks do? What if rates break out, what will banks do???

This dynamic is definitely worth watching. Add it to your trading radar… and stay tuned!

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Central Banks

Interest Rates

Next Meeting

CBN

18.75%

Jan 23, 2024

BOE

5.25%

Dec 14, 2023

ECB

4.50%

Dec 14, 2023

FED

5.50%

Dec 13, 2023

SNB

1.75%

Dec 14, 2023

RBA

4.35%

Dec 05, 2023

BOC

5.00%

Dec 06, 2023

RBNZ

5.50%

Feb 28, 2024

BOJ

-0.10%

Dec 19, 2023

CBR

15.00%

Dec 15, 2023

RBI

6.50%

Dec 08, 2023

PBOC

3.45%

BCB

12.25%

Dec 13, 2023

NSE 30	2,625.00	-0.35	-0.01%
NSE All Share	71,419.87	+54.62	+0.08%
US 30	36,219.2	+268.3	+0.75%
US 500	4,590.8	+23.0	+0.50%
FTSE 100	7,529.35	+75.60	+1.01%
DAX	16,397.52	+182.09	+1.12%
South Africa Top 40	69,800.58	+153.44	+0.22%

Brent Oil	79.27	-1.59	-1.97%
Crude Oil WTI	74.49	-1.47	-1.94%
Gold	2,069.60	+31.50	+1.55%
Silver	25.530	+0.237	+0.94%
Copper	3.9153	+0.0648	+1.68%
London Cocoa	3,504.00	-76.00	-2.12%
London Wheat	184.00	-4.60	-2.44%

Nigeria 10Y	16.009	+0.002	+0.00%
Nigeria 2Y	14.308	+0.001	+0.00%
U.K. 10Y	4.1780	+0.0370	+0.89%
Germany 10Y	2.3580	-0.0050	-0.21%
U.S. 10Y	4.231	-0.118	-2.73%
U.S. 5Y	4.165	-0.133	-3.10%
U.S. 2Y	4.576	-0.139	-2.96%

Access Bank	10.00	+0.00	+0.00%
Zenith Bank	35.10	+0.95	+2.79%
UBA	21.30	-0.05	-0.23%
FBN Holdings	22.15	+0.10	+0.45%
Guaranty Trust Holding	39.15	+0.10	+0.26%
Sterling Bank	3.570	+0.020	+0.56%
Dangote Cement	321.00	+1.00	+0.31%

Banks Could Tank if Rates Break Out

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