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NEW YORK (
Citigroup(C - Get Report) and
Regions Financial(RF - Get Report) were the winners among the largest U.S. banks on Monday, with shares of both companies rising 2%.
Citigroup closed at $47.60 and Regions closed at $8.31.
The broad indexes on Monday all ended with slight gains, as investors continued to digest Friday's improving employment numbers. The Bureau of Labor Statistics said that the U.S. economy added 236,000 jobs during February on a seasonally adjusted basis, and that the unemployment rate improved to 7.7% from 7.9% in January.
Although the effect of the required $85 billion in federal spending cuts this fiscal year has yet to be felt, "U.S. employment data are on a track suggesting a strengthening recovery," according to Citigroup director of economic and market analysis Steven Wieting.
Wieting said in a report in Monday that the
Federal Reserve's "easing cycle is showing greater signs of impacting end borrowing costs, away from simply generating low bond market yields," however, "there is much still to recover. Outside 18 housing-related job categories, employment remains about 1.5 million below the level of five years ago while the adult population has risen by 12.2 million over the same time frame."
The Federal Reserve has been making monthly purchases of $85 billion in long-term securities, in an effort to hold long-term rates down. "The Fed will most likely taper off the size of asset purchases during 2013 and conclude QE in early 2014," Wieting wrote.
Upcoming Dividend and Buyback Announcements
With the Federal Reserve completing its annual stress tests for the nation's 18 largest banks last Thursday, investors are looking ahead to Thursday, March 14, for the regulator to announce the results of the Comprehensive Capital Analysis and Review (CCAR) of the banks' capital plans through the first quarter of 2014. Most of the big banks and many large regional banks not subject to CCAR but subject to the Fed's Capital Plan Review (CapPR), are expected to announce dividend increases and/or stock buybacks.
Credit Suisse analyst Craig Siegenthaler in a report on Sunday said that he expected capital deployment to be a "catalyst" for shares of Regions,
SunTrust(STI - Get Report) and
Zions Bancorporation(ZION - Get Report), even though he feels "cautious" about the industry over the short term.