Stupid Stock Move of the Day! BofA up 8%?June 6, 2012: 1:39 PM ET
Apparently I forgot to wear my "Risk-On" t-shirt today. Why on earth are big bank stocks rallying this much? Bank of America (BAC) is the biggest gainer but Wall Street rivals Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan Chase (JPM) were all up at least 2.5% too.
Yes, it's nice that investors took a break from worying about Spain and Greece for a minute or two. But considering that Europe's woes are not yet over, we still don't know how bad JPMorgan's "$2 billion" trading loss will really be and that the IPO window is nailed shut thanks to Morgan Stanley and Facebook (FB), is there any compelling reason to rush back into the big banks now?>
Sure, bank bulls will say that they were oversold in the past month? But bank skeptics can reasonably retort that the were overbought in the first three months of this year and that this sell-off is the payback for the earlier rally. It's tough to claim with any certainty that the worst is behind the big financials. Any investor that is interested in this group is probably better off waiting until after we see what second quarter earnings look like in about a month.