Bank stocks popped after former President Donald Trump secured a second term in the White House. The financial select sector SPDR fund (XLF) rose more than 6% in intraday trading on Wednesday, with names like JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), and Goldman Sachs (GS) gaining. KBW managing director David Konrad joins Josh Lipton on Asking for a Trend to discuss why Trump's win sent the sector higher and what bank investors are looking for from his second term. Konrad says, "There's three main factors, all kind of surrounding deregulation to some extent," that sent bank stocks higher: less antitrust regulation leading to more mergers, lower capital constraints, and less pressure from the Consumer Financial Protection Bureau (CFPB) on consumer fees. "The other factor would be a little bit of the concern of the inflationary ramifications of the Trump administration, potentially, and so people are looking for more asset-sensitive names for kind of a higher for longer, and those are really the true outperformers that we saw today." Watch the video above for more about Konrad's expectations for the banking sector under Trump. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. This post was written by Naomi Buchanan.
