We know the second quarter was a period of profit pressures for the banks as the U.S Treasury yield curve was inverted for every day of that period. It is the shape of the yield curve that really determines profitability, though. With the 3-month U.S. Treasury Bill yielding 2.12% and the 10-Year U.S. Treasury Bond yielding only 2.07% we are still in the land of yield curve inversion. The current stock market is in a state of delusion that I have not seen in my 27 years of following stocks professionally. I don’t believe the bank stock pullback will be as extreme as the coming plunge in the Nasdaq, but a nice 10% downside move post-Fed is what I am envisioning for money-center names.

Source: Forbes July 17, 2019 15:24 UTC