

EBC Markets Briefing | Dow outperforms on strong bank stocks

The S&P 500 and the Nasdaq 100 tumbled on Wednesday with the ongoing rotation out of the tech sector. The Dow held onto a modest gain and logged its third straight record closing high.

Global hedge funds have been reducing their exposure to US tech stocks in seven of the last eight trading sessions, according to Goldman Sachs. Bank stocks regain appeal after several rosy earnings reports. Wall Street has posted its best quarter for investment banking in more than two years with the five largest investment banks together reporting a 40% increase in investment banking fees from a year earlier. All those banks except Goldman announced higher than expected investment banking revenues for the quarter. Each of the five stocks has outperformed the S&P 500 index over the past three months. Fees from debt deals have outstripped other areas of investment banking, as corporate borrowers look to refinance or raise new debt as interest rates have stabilised. Citi and Morgan Stanley were particularly benefited. Some analysts have expressed scepticism about whether the rebound will stick, however, as there are more signs of tempering of the inflation prints and some normalisation in rates.

The Dow crossed 41,000 for the very first time in its history, but it looks quite overbought. If the index fails to hold above the level, a steep correction is more likely than not. EBC Trading Platform Security Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Online Trading Support or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Learn more

Contact:

mkt@ebc.com

Disclaimer:

Investment involves risk. The content of this report is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.

Publication date:

2024-07-18 07:35:21 (GMT)

The terms and conditions of use set out below (referred to as "FX Blue's Terms"), form a contractual agreement governing FX Blue's relationship with you in relation to your use of this Website (“Agreement”) and you agree to be legally bound by FX Blue's Terms just as if you had signed this Agreement. By using this Website and any Information, you are agreeing to comply with and be bound by FX Blue's Terms, including any revisions that may be made to FX Blue's Terms from time to time. FX Blue reserves the right, in FX Blue's sole discretion, to change, modify, add or remove portions of FX Blue's Terms at any time by posting the revisions on the Website. You should check FX Blue's Terms periodically for changes as by using the Website after FX Blue posts any changes to FX Blue's Terms, you are agreeing to accept those changes, whether or not you have reviewed them, and you waive any right you may have to receive individualised notice of such changes. FX Blue's Terms may be supplemented by additional terms and conditions pertaining to specific content and activities. You agree and understand that such additional terms and conditions are hereby incorporated by reference to FX Blue's Terms. Your continued use of the Website means that you accept any new or modified FX Blue Terms.