Selling in US regional banks returns. Where to watch. | Forexlive
The regional bank ETF that started the day so strong is now giving back gains and is up just 2.8%.
All the gains in the index came pre-market and it’s been selling since the start of regular trading hours.
One catalyst is that S&P has placed First Republic Bank’s rating on credit-watch negative. That shouldn’t be a surprise to anyone but it’s reminiscent of the financial crisis when a second round of panic was set off by ratings agencies that were late to the game.
You can see what’s happening in First Republic shares here.
Talking to people in Silicon Valley, First Republic has a unique business model in that it’s a bank that’s directly on the campuses’ of tech companies and is the go-to place for their workers. They’re all moving accounts as fast as they can.
The question is whether the company can raise enough liquidity to stem the tide. So far it has been price becomes narrative at some point and if the stock price gives back the remainder of the 34% gain, it’s not a good sign.
I get the sense that it’s been fast money and the WSB crowd that’s been pumping these stocks. Those are the flimsiest hands. What we need is for real money to buy these shares and they’re understandably hesitant. Better yet would be for bigger banks to step in.