Bank stocks don’t have a problem with the rising 10-year yield.
At the moment:
- Bank of America (BAC) is up about $1.80 on the day
- JP Morgan Chase (JPM) is up $6.03
- Wells Fargo (WFC) is up $1.53
- Citigroup (C) is up $2.15
- PNC Financial Services (PNC) is up $5.42
Or, look at the SPDR S&P Regional Banking ETF (KRE). Since February, the ETF ran from a low of about $55 to $72.70. Higher yields may be able to push it even further north.
All could rise even more with rising yields.
According to Barron’s, bank stocks are some of the top beneficiaries of rising yields.
“Banks lend money on the long end of the yield curve and borrow on the short end of the curve. Even with interest rates still low by historical standards, any steepening of the yield curve is a welcome sign for banks as they make their money on the spread between loans and deposits,” they reported.