Two things that could lift bank stocks? A dovish Fed, and 'a week and weekend with no more U.S. bank failures,' analyst says

Earlier this week, bank stocks were ailing, after the collapse of Silicon Valley Bank and Signature Bank and growing concern over First Republic Bank and Credit Suisse. A possible cure, some analysts say? A fix for Credit Suisse, a lighter touch from the Federal Reserve on monetary policy, and just a single “week and weekend” without another U.S. bank failing.

“Of course, in a crisis, bank valuations tend to reflect system stress rather than individual fundamentals,” they said. The second driver, UBS analysts said, would be “resolutions for mid-sized regional banks that are deemed more vulnerable to deposit pressure by the market.” The third: “a week and weekend with no more US bank failures.”

With flashbacks from the 2008 crisis intensifying for some, UBS said that interest rate cuts by the Fed might be what the banking industry needs, even though analysts say the current situation is different and not yet as dire as during the financial crisis 15 years ago.

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