| March 1
March 1 Shares of large U.S. banks touched new
highs on Wednesday, buoyed by comments from several Fed
policymakers that stoked expectations for a March interest rate
President Donald Trump's measured and inclusive tone in his
first speech to a joint session of Congress since taking office
added to the optimism in the market.
JPMorgan Chase & Co Goldman Sachs Group Inc
and Wells Fargo & Co touched record highs, while Bank of
America Corp and Morgan Stanley rose to their
highest levels in more than eight years.
Gains in financial stocks pushed the S&P financial index
to its highest level since December 2007.
Bank stocks have been on a tear since the Nov. 8 U.S.
presidential elections on hopes that the lenders will benefit
from lighter regulation, rising interest rates and lower taxes
under Trump administration.
New York Fed President William Dudley, among the most
influential U.S. central bankers, said on Tuesday that the case
for tightening monetary policy "has become a lot more
compelling" since the election of Trump as president and a
Traders have now priced in a nearly 70 percent chance of a
rate hike when the Fed's policy-setting body meets on March
14-15, according to Thomson Reuters data.
"Chances are that rate hikes are coming through faster and
the President's speech yesterday showed that tax reform, which
will hugely benefit the banks, is a key policy item for the
administration," Keefe, Bruyette & Woods analyst Brian
"Faster interest rate hikes would come as a relief to banks
that have been reeling under pressure to grow their revenue over
the last several years."
Overall, revenue at the top six U.S. banks fell 0.9 percent
in 2016, compared with a 0.5 percent fall in 2015.
The Fed hinted at three rate hikes in 2016 but held back
till December, when it raised the interest rate by 25 basis
points. At that time, it also signaled a faster pace of rate
hikes in 2017.
JPMorgan also struck a positive note at its investor day on
Chief Executive Jamie Dimon, a lifelong Democrat, said he
remained confident about the U.S. economy, adding that the
outlook will be even better if the federal government overhauls
corporate taxes, thins out redundant regulation and boosts
spending on public infrastructure.
"The future is bright," he said.
(Reporting by Sweta Singh and Sruthi Shankar in Bengaluru;
Editing by Anil D'Silva)