- Big bank stocks climb strongly as the U.S. and Mexico announce a trade agreement, and the U.S. economy appears on solid footing.
- On Friday, Federal Reserve Chairman Jerome Powell reaffirmed that the Fed plans to continue a gradual normalization of monetary policy, giving some reassurance that the Fed won't move too fast on raising rates.
- The trade agreement provides some relief to the recent escalation of trade tensions. In addition to the Mexico deal, President Trump says the U.S. will immediately start talks with Canada, part of his effort to replace the North American Free Trade Agreement that went into effect in 1994.
- Goldman Sachs (GS +3.1%) and Morgan Stanley (MS +3.7%) lead the gains, followed by Citigroup (C +2.5%), JPMorgan (JPM +1.8%), Bank of America (BAC +1.4%), and Wells Fargo (NYSE:WFC).
- The last week of August, though, typically feature thin-trading volumes, since it's one of the most popular weeks of the year for vacation. Those thin volumes can exaggerate swings in the market.
- Regional banks are also faring well: PNC Financial (PNC +1.9%), SunTrust Banks (STI +1.3%), and Fifth Third (FITB +1%) show the strongest gains.
- It's not just U.S. banks doing well. Brazil's big banks are all advancing -- Itau Unibanco Holdings (ITUB +3.3%), Banco Santander (MC:SAN) Brasil (BSBR +2.1%), Banco Bradesco (BBD +2.5%).
- Other international banks advancing are: Germany's Deutsche Bank (DE:DBKGn) (DB +3%), India's ICICI Bank (IBN +3%), U.K.'s Barclays (LON:BARC) (BCS +1.8%), Argentina's Banco Bilbao Vizcaya Argentina (BBVA +1.5%), and Canada's Toronto-Dominion Bank (TD +1%) and Bank of Nova Scotia (BNS +1.3%).
- Previously: Stock markets at record highs after U.S. and Mexico reach trade deal (Aug. 27)
- Now read: Top 2 Banking Stocks Post FED Stress Test
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