Investors aren't convinced the banking crisis — fanned by soaring interest rates — is over. And they're not making any secret of the banks they're most concerned with.
Eleven stocks in the SPDR S&P Bank ETF, including PacWest Bancorp, Western Alliance and First Horizon, are down more than 17.5% in the past week, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And that's just the latest leg down for the stocks which are down 55%, this year, on average.
Worries about smaller but still major banks linger following the failures of Silicon Valley Bank, Signature Bank and First Republic Bank. DoubleLine Capital founder Jeffrey Gundlach told CNBC Wednesday he expects more bank trouble. And he's not alone. "It's a real hazard," said economist Alan Blinder on the same network.
"The Fed is done hiking rates unless banking jitters completely disappear leading up to the June 14 meeting, Congress is able to make meaningful progress with the debt ceiling, and if soft landing calls become the consensus," said Edward Moya at Oanda.
Bracing For More Banking Woes
The SPDR S&P Bank ETF still points to pain in the sector. Shares of the ETF are down more than 29% this year, and has fallen more than 12% in just a week.
And that masks much of the pain in the market. Shares of some individual banks are off much more. Investors are trying to identify the banks under the most pressure. "Regional Banks that may have significant further downside include those that are highly leveraged, have a high percentage of exposure of loans to commercial real estate and still high percent of uninsured deposits," said Robert Maltbie of Singular Research.
Western Alliance, a Phoenix-based bank, is one stock investors are selling off. Shares dropped more than 70% in just a week, dragging it down 81% for the year. And then there's PacWest, based in Beverly Hills, Calif., that's fallen by more than any other bank in the index the past week: 73%. Shares are off more than 87% this year.
You're also seeing large declines in some banks with low BBB credit ratings as investors go for stocks with the highest ratings. First Horizon and Valley National, rated BBB- and BBB, respectively are down more than 25% in a week.
That's not to say further bank problems will happen. But following the stock market will show you where investors are looking.
Hardest Hit Bank Stocks
Among the SPDR S&P Bank ETF
| Company | Ticker | Week % ch. | Year-to-date % ch. |
|---|---|---|---|
| PacWest Bancorp | -73.1% | -87.3% | |
| Western Alliance Bancorporation | -70.1 | -80.9 | |
| First Horizon | -45.3 | -60.7 | |
| Comerica | -27.6 | -55.2 | |
| Zions Bancorporation | -27.1 | -60.6 | |
| Valley National Bancorp | -22.1 | -38.6 | |
| WesBanco | -20.8 | -43.1 | |
| KeyCorp | -20.7 | -50.2 | |
| BankUnited | -20.7 | -48.5 | |
| Citizens Financial | -19.8 | -38.7 | |
| CVB Financial | -19.6 | -53.4 | |
| UMB | -17.7 | -37.7 |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
