📊 US banks under pressure: Recession fears shake the market!📉
US bank stocks are losing ground, a direct result of growing fears of a possible recession. Investors are turning to safer assets, fleeing a sector that is closely linked to the state of the economy.
Citigroup $C, along with Wells Fargo $WFC, recorded the biggest loss over the past five days by more than 13 %, followed by Bank of America $BAC, Goldman Sachs $GS, JPMorgan Chase $JPM and Morgan Stanley $MS, which lost approximately 10 %.
Lenders are sensitive to economic fluctuations as a recession can increase the number of non-performing loans due to higher unemployment. At the same time, demand for new loans is decreasing, which directly affects bank profitability.
Market nervousness has been growing since last year, when investor confidence in the banking sector was undermined by the crisis caused by higher interest rates.
The S&P 500 Banks Index fell by 3,3 %, while the KBW Regional Banking Index 4 %. Increased unemployment, which reached a near three-year high in July 4,3 %, and aslowdown in wage growth are other factors raising concerns about a possible deterioration in the economic situation.
What is your view on the future of the banking sector? Which banks are on your radar in a potential downturn ?
All I have from the US is $BAC. If one buys shares of those big banks, I don't think one has much to worry about. I would be much more afraid of the small ones.
Banks are great in my opinion, but you have to have the right ones like in every sector :) I only have $JPM from the banking sector and I'm not going to change anything on it yet.