This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Banks Unshakeable Uncertainty

Stocks in this article: JPM PNC WFC SNV TAYC NEWS

NEW YORK ( TheStreet) -- For bank stock investors, uncertainty is now the name of the game and will likley grip the sector for the foreseeable future.

"Year-to-date, banks have been the best performing asset class; since April, they're the worst performing asset class," Eric Heaton, managing director and co-head of financial institutions group at Deutsche Bank, (DB) said earlier this week. Heaton was speaking during a panel presentation at the SNL Financial Bank M&A Symposium held in New York.

The Keefe, Bruyette & Woods bank index (BKX), which tracks the top 25 U.S. banks, is down nearly 17% since April 30 after posting a roughly 30% rise to that point.

As of this date the BKX is up roughly 8% for the year

Despite some of that uncertainty alleviating with the signing of the Dodd-Frank Act by President Obama in July and new international capital standards coming out of Basel III last month, bank stocks are still in flux.

According to Jim Meyer, the chief investment officer at Tower Bridge Advisors in West Conshohocken, Pa., that's not about to be alleviated anytime soon.

"There are two overriding issues with the banks right now: FinReg and the flattening yield on then U.S. Treasury bond that both work against banks stocks until they're resolved," Meyer says, adding that his firm is underweight the bank sector. "The environment is still hostile and will likely be hostile for longer than not and so we stay away."

Meyer continued: "We know that as FinReg rules are contemplated and written that there are going to be a lot of speed bumps and other issues along the way. But the other issue just fundamentally, banks borrow at one rate and lend at another and when the yield curve flattens, they make less money."

"The banks are going to be playing defense for a lot longer until they know the rules of the game. And it's not really the economy. ... The ability to clean up yesterday's problem and start anew just gets stretched out for longer," Meyer says.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs