Everyone was trash talking the banks going into the quarter. Everyone. They were all acting as if there regionals would be the same as the nationals. Maybe worse. They said that there would be no loan growth, that loan losses would be severe and that the mortgage put-backs would be endless.
Now we have seen Wells Fargo (WFC), US Bancorp (USB) and Comerica (CMA). And, frankly, they look great. The media is so powerful these days that they were able to trash Wells Fargo unequivocally except for me and the New York Times. Comerica had been down, widely considered to be a total disaster going in. Instead it was terrific. I mean really fantastic. M&T (MTB), another company widely considered overvalued, also is moving up nicely.
Best of all might have been US Bancorp, an Action Alerts Plus name that had been repeatedly downgraded ahead of the quarter from analysts who actually believed that it was overvalued and couldn't supply the revenue growth needed to move it higher. I think numbers have to come up, rather big perhaps, and that those who downgraded it will be dragged kicking and screaming into pushing it again.
Of course, all of these banks are colored by the action in Europe because they are part of ETFs and all anyone cares about when it comes to the banks is the ETFs. Or at least it seems.
But right now, it is very clear that things are better than people realize and that's the main issue.
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