Tom Lee, CFA
FS Insight Head of Research
Mark L. Newton, CMT
L . Thomas Block
Wall Street Debrief - Weekly Roundup
Key Takeaways* The S&P 500 slipped 0.16% to 4,450.32 this week, even as the Nasdaq skidded to 13,708.33, down 0.39%. Bitcoin was around 26,392.10, down roughly 0.53%.
On Regional Banks
Since May 7, we have had a tactical overweight call on regional banks (KRE) . As a group, they rose 15% (compared to 9% for the S&P 500). But there has been consolidation in recent weeks, even though -- as Xuan pointed out, "recent FDIC reports show that [their] health hasn't gotten any worse." He admitted that "they haven't gotten any better either," however.
Whatever the reason for the recent consolidation, Newton's technical views suggest that "regional banks are under a substantial amount of pressure. If you have a time frame of the next couple months, I don't think regional bank stocks are going to work, in my view."
For these reasons, said Lee, "we feel it is prudent to become more selective and remove our tactical overweight recommendation."