U.S. bank stocks have run based on an incrementally improving economy and the guaranteed profit they are making due to the policies of the Federal Reserve.
And now the stocks have stalled as Wall Street temporarily panics on concerns the Fed is going to ease off on easing. The Fed will ease off on its liquidity programs. But the Street is thinking it will happen sooner rather than later. In reality it will end later rather than sooner, well beyond this year and probably beyond 2014.
Fear and bank stocks
That being said, the Street’s fears are now running the bank stocks to and fro. Here is what to do in light of relative strength and misguided fears: nothing.
Let’s look at five bank stocks to see why.