U.S. Banks Keep Tumbling as Bad News Piles Up, Curve Inverts


(Bloomberg) -- Big banks extended losses into a fourth day Friday, as 10-year Treasury yields tumbled, the 3-month/10-year yield curve inverted for the first time since 2007, U.S. manufacturing data missed expectations and Europe's economic outlook darkened.

The KBW Bank Index shed 3.4 percent to fall to the lowest intraday since Jan. 15, with top decliners once again including regional banks Regions Financial Corp., KeyCorp, and Citizens Financial Group. Silicon Valley lender SVB Financial Group was the biggest loser, slumping more than 6 percent, the most since late December.

Banks have been hit hard by the Fed's surprisingly dovish turn this week, with the KBW Bank Index dropping 8.4 percent in the past four days. Bellwether Bank of America Corp. was down 3.4 percent early Friday, though share still up almost 11 percent so far this year.

JPMorgan Chase & Co. was off by 2 percent after closing below its 50-day moving average Thursday, and Goldman Sachs Group Inc. was down 1.8 percent. Citigroup sank 3.8 percent; earlier, the bank was said to have ousted eight equities traders in Hong Kong and suspended three others after a sweeping internal investigation into dealings with some clients.

U.S. 10-year Treasury yields fell another 9 basis points to 2.45 percent Friday morning -- down from 3.24% last November.

The preliminary U.S. Manufacturing Purchasing Managers' Index (PMI) slowed to 52.5 in March, a 21-month low, IHS Markit said. The manufacturing output index fell to the lowest in close to three years.

Earlier, German 10-year Bund yields dropped below zero for the first time in more than two years after German manufacturing contracted further, compounding fears of an economic slowdown across the euro area. In the U.K., Theresa May plans a third vote on her Brexit deal next week.

"Economic data continue to signal slowing global growth," Citi's global chief economist Catherine Mann wrote in a note on Thursday. She flagged contracting South Korean exports and China activity that's unlikely to rebound strongly, along with Brexit uncertainty.

"Dovish central bank guidance has pushed global equities higher in recent weeks, in spite of the weaker global backdrop," Mann said. "The outcome of the Fed's March meeting may add fuel to the rally, but there are reasons to be cautious, namely abnormally low volatility and recent equity fund flows."

(Updates shares throughout.)

To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Scott Schnipper

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.


More Related News

N. Korea Says Bolton Comments on Third Summit Are Foolish: KCNA
N. Korea Says Bolton Comments on Third Summit Are Foolish: KCNA

"We never expected anything logical from Bolton, but as national security adviser, he should at least know the context of dialogue that took place between the two leaders regarding a third summit before he says anything," North Korea's Foreign Ministry diplomat Choi Sun Hee was quoted by the news agency as saying.

Butina Shouldn't Serve Any More Time in Prison, Her Lawyers Say
Butina Shouldn't Serve Any More Time in Prison, Her Lawyers Say

Attorneys for the 30-year-old Russian told U.S. District Judge Tanya Chutkan in Washington on Friday that she has spent more than nine months in detention and cooperated before and after her arrest and guilty plea. Butina arrived in Washington as an American University student in 2016 and made inroads with Republican Party figures, including Scott Walker, at the time the governor of Wisconsin, and officials at the National Rifle Association.

Pompeo says US will take
Pompeo says US will take 'tough action' on Russian meddling

Secretary of State Mike Pompeo vowed Friday the United States would keep taking "tough action" on Russia after Special Counsel Robert Mueller revealed widespread attempts by Moscow to help elect President Donald Trump. A day after Mueller's 400-page report was released publicly, Pompeo said that the Trump administration had raised interference in the 2016 election during each meeting with Russia.

Trump 'Tried to Control' the Russia Probe: Mueller in His Own Words

(Bloomberg) -- Special Counsel Robert Mueller says his investigation doesn't entirely clear President Donald Trump of wrongdoing, laying out 10 instances of obstruction by the president, with an analysis of each.

Trump Tweets
Trump Tweets 'Game Over' After Barr Briefing on Mueller Report

Trump has previously referenced the hit show in his tweets, including a famous warning that "sanctions are coming" after announcing his plans to increase penalties on Iran. For over a year, Trump's lawyers have warned him that his tweets and public statements could create legal jeopardy for him or prolong the investigation. It was advice Trump didn't always take.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Economy

Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.