But to make matters worse, investors punished banking stocks further over the last few days, as the market grasped the consequences of Brexit, with US lenders facing uncertainties over the outlook of their large UK operations. A day after the UK's popular vote to leave the bloc after 43 years, the shares prices of Bank of America (NYSE: BAC), JPMorgan Chase & Co (NYSE: JPM) and Citygroup (NYSE: C) fell 6.31% to US$13, 3.34% to US$59.6 and 4.52% to US$40.3 on June 24 against the day earlier.
The S&P 500 banking sector became one of the worst-performing of the ten S&P 500 industry sectors this year. As a group, the index was held down by about 5% during the period tracked. Another analysis made by Mergent of five US major component bankers on the KBW NASDAQ Bank index - JP Morgan Chase, Bank of America, Citigroup, Wells Fargo (NYSE: WFC) and Goldman Sachs (NYSE: GS) - showed that, despite a considerable 12% bounce since the mid-February lows, the BKX was down by 5.62% post-Brexit.
Overall, with the unfavorable market situation plus Brexit, trading activity will remain somewhat subtle, especially given the cautious steps taken by investors when the global economy is in doubt. The five major banks tracked, have already hinted at miserable trading conditions amid worries that a protracted period of slowing global growth, uncertainties in the UK as well as in the whole European region, plus low interest rates, plummeting commodity prices and a unstable stock markets. All these combined are expected to continue to inflict pain on the world’s largest financial institutions, with investors expected to continue to shun banking stocks until the market stabilizes. #MergentInc #industryreports #banking #brexit