Bank stocks around the globe dramatically underperformed respective stock markets in 2007. And by 2008, a global financial collapse punished every economic sector.
Here in 2020, bank stock troubles are resurfacing. Year-over-year differences between ‘Big Finance’ and primary stock benchmarks are downright jaw-dropping.
In Europe:
And in the United States:
In a world where central banks have destroyed yield curves with negative interest rate policy (NIRP) and zero percent rate policy (ZIRP), not to mention a pandemic that has decimated millions of private businesses, banks have little reason to lend. Prospects for bank growth appear limited at best.
That hasn’t deterred get-rich-quick investors from bordering the IPO rocket ship. Returns in the first day of trading have been astronomical. Think Snowflake (SNOW) or JFrog (FROG).
The last time that participants went completely bonkers for anything ‘IPO?’ The 2020 tech bubble burst in dramatic fashion, wiping away more than 75% of the Nasdaq’s price.
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