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- U.S. bank stocks drop in premarket trading after Federal Reserve Chairman Jerome Powell's prepared remarks for his Senate testimony indicate the Omicron variant could threaten the country's post-pandemic recovery.
- That could lead to a later interest rate liftoff than investors had been expecting. According to CME's FedWatch tool, the probability of a 25 to 50 basis point increase at the June 15, 2022 FOMC meeting fell to 40.9% from 46.5% a week ago; the probability of a 50-75 bps boost declined to 9.9% from 23.0% a week earlier.
- The 10-year Treasury yield drops almost 6 bps to 1.44%.
- The SPDR S&P Bank ETF (NYSEARCA:KBE) falls 1.9% in premarket. By name, Citigroup (NYSE:C) drops 1.8%, JPMorgan Chase (NYSE:JPM) slides 1.4%, Bank of America (NYSE:BAC) -1.7%, Goldman Sachs (NYSE:GS) -1.7%; meanwhile Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) are unchanged.
- Among regional banks, Huntington Bancshares (NASDAQ:HBAN) dips 1.4%, Comerica (NYSE:CMA) -2.0%, Regions Financial (NYSE:RF) -1.7%, KeyCorp (NYSE:KEY) -1.3%.
- Previously (Nov. 29), Fed's Powell warns that Omicron could slow recovery