“The last part of the puzzle for the bank recovery from the crisis is rising short-term interest rates,” Gerard Cassidy, an analyst at RBC Capital Markets, said in the article. “Investors were, prior to today’s employment report, convinced that the Fed was not going to raise rates in June, which weighed on the bank stocks throughout the first part of this year.”
For instance, Fred Cannon, a KBW Inc. analyst, would cut bank average earnings estimates by 5% to 6% if the Fed keeps interest rates unchanged this year.
SPDR S&P Bank ETF
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Max Chen contributed to this article.