Markets may be trying to discern shapes in the shadows where there are none, overreacting to the recent spate of economic weakness. For instance, banking analyst Mike Mayo argues that Wall Street banks are trading at “recession prices but no recession.” On a price-to-tangible book value, banks have dipped to levels below pre-financial crisis, and some bank stocks are now trading below book value.
“More than $350 billion have been erased in financial shares in 2016, the worst start to a year in data going back to 1990. The selloff in Goldman Sachs Group Inc., Citigroup and Bank of America continued Wednesday, driving the industry down another 1.6 percent at 12:30 p.m. in New York. So far this year, the group has lost 13 percent, almost double the benchmark gauge’s decline,” according to Bloomberg.
Each of those stocks is held by XLF.
Financial Select Sector SPDR
