Tumbling Bank Stocks Point to Problems in the Financial System?
Banks stocks continue to perform much worse than equities generally as this graph of the ratio of BKX to the S&P 500 index shows. BKX is an index of large US bank stocks.
Tumbling Bank Stocks Point to Problems in the Financial System?
Banks stocks continue to perform much worse than equities generally as this graph of the ratio of BKX to the S&P 500 index shows. BKX is an index of large US bank stocks. We believe relative bank stock underperformance of this magnitude may be an early warning that confidence in the financial system is under threat. If so, this is historically good for gold. For more on this bank stock indicator, see our previous post at Gold Investors Watching Bank Stocks.
The equivalent graph for European banks relative to the European market for large caps looks just as bad (below).
