Regional banks lead industry declines as Q2 earnings season kicks off

PacWest Bancorp

14/07/2023 17:52

** Shares in regional banks were falling sharply on Friday, with
the KBW regional bank index  .KRX  last down 2.0%, snapping a
five-session winning streak as bigger banks kicked off earnings
season
    ** Some of the largest U.S. banks got a profit boost from
higher interest rates and pointed to early signs of recovery in
investment banking, but warned of stress among consumers and
that losses would increase in commercial real estate
    ** After opening up 0.81% on Friday the regional index
quickly lost steam to fall as much as 2.7%. The index had
advanced almost 8% in the last 5 sessions
    ** Also, S&P 500 bank index  .SPXBK  was down 0.9% after
earlier rising as much as 1.7%. it had gained 4.7% in the
previous five sessions 
    ** "The group was pretty extended going into the print this
morning. It's not a surprise to see some sell the news. Every
one of the prints was a beat and raise. That doesn't mean the
stock has to go up," said Michael James, managing director of
equity trading at Wedbush Securities
    ** "Positioning was extremely crowded going into the
results.  From a stock price action standpoint it's not
surprising to see some pullback from the gap up openings," he
said
    ** Among the biggest regional banks included in the SPXBK,
the biggest percentage decliners were Zions Bancorp  ZION.O ,
3.3%, Keycorp  KEY.N , 3.2% Citizens Financial  CFG.N  2.6% and
Comerica  CMA.N  2.6%
    ** The S&P 1500 Regional Banks index  .SPCOMBNKS  was last
off 1.9% on Fri with PacWest Bancorp  PACW.O  the biggest loser
down 5.8%

 (Reporting By Sinéad Carew)
 ((sinead.carew@thomsonreuters.com; +13322191897;))