Bank Stocks Shine amid Tax Cut Hopes
Bank ETFs rose
Financial stocks rose last week amid the government’s plan to cut the corporate tax rate and the potential of less dovish action from the Fed. The S&P 500 Financials Index rose 1.5%, while the S&P Insurance Select Industry Index (SPSIINS) rose 0.88%. The SPDR S&P Regional Banking ETF (KRE) rose 4.3% followed by the SPDR S&P Bank ETF (KBE) and the Financial Select Sector SPDR Fund (XLF) with a gain of 3.70% and 2.8%, respectively.
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Although most of the major banks posted decent gains, Goldman Sachs (GS) was the clear winner with a gain of 2.7%. Other major gainers included Citibank (C), Wells Fargo (WFC), and Bank of America (BAC) with gains of 1.9%, 1.7%, and 1.3%, respectively.
Cautious optimism on bitcoins
Speaking at an event hosted by the Federal Reserve Bank of Philadelphia, Keith Noreika, the acting Comptroller of the Currency for the U.S. Department of the Treasury, said that he’s open to the idea that a new breed of banks might conduct business in bitcoin and other cryptocurrencies.
AIG released from “too big to fail” supervision
A decision to remove AIG (AIG) from “too big to fail” supervision could help save the company ~$150 million in annual compliance costs. The “too big to fail” tag brings more capital and regulatory requirements. The company won’t need a clearance to complete large acquisitions.