Banks Underperformance A Sore Spot For Stock Market Bulls

Chris Kimble
bank index stocks underperformance bear market caution risks investing chart image may 20

Bank Index to S&P 500 Ratio Performance Chart

Banks continue to underperform the broad markets.

And this could become a problem for stock market bulls soon.

In today’s chart, we look at the ratio of the Bank Index to the S&P 500 Index. As you can see, there was a major divergence before the Financial Crisis in ’07-’08 as well as before the coronavirus crash this year.

The concern this year is that banks continue to act sickly compared to the broad market.

The Banks to S&P 500 ratio continues to head lower, reflecting a negative message from banks… and one that may take the broader market lower again soon. Stay tuned!

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