Financial stocks have radically underperformed the broader equity market as overnight interest rates have remained pinned at 0%, and the long end of the yield curve refuses to steepen meaningfully.
While the S&P 500 is boasting positive gains for the year, and with the technology sector posting returns north of 20%, financial stocks have significantly lagged.
KRE: Regional Bank ETF YTD Performance:
Source: Bloomberg
The weak performance out of financial stocks and regional bank stocks, more specifically, is not a new trend that started after the COVID-19 crisis.
Regional bank ETF (KRE) peaked