BANKS AS A SIGNAL

Many pundits use bank stock relative performance as a signal for the market, but does it work?

The other day I heard a market pundit saying that the recent “bank index underperformance is an ominous signal that the stock market is due for another crash”. It made me realize that I have heard this line so often over my decades in the market, but I have never checked if this signal has any merit.

So, let’s dig into this idea and see if banks relativ…