Banking Stocks Rise as Democrats Gain Control of the U.S. Senate

Strategic Insights -

The outcome of the Georgia runoff election has ignited a surge in banking stocks, with shares of JPMorgan Chase & Co., Bank of America, Citigroup, and Wells Fargo & Co. rising between 4.6% and 7.6% on Wednesday. The election results have brought the possibility of a Democratic takeover of the U.S. Senate, which could give President-elect Joe Biden more freedom to implement policies such as increased government spending, support for renewable energy, and more pandemic aid.

Key Takeaways:

  • JPMorgan Chase & Co. (JPM) shares rose 4.6%, while Bank of America (BAC) was up 7.1%, Citigroup (C) increased 6.4%, and Wells Fargo & Co. (WFC) was up 7.6%.
  • Analysts believe a Democratic majority in the Senate would give President-elect Joe Biden more freedom to enact policies such as increased government spending, support for renewable energy, and more pandemic aid.
  • A win by Democrat Jon Ossoff in the Georgia runoff would result in a 50-50 seat tie between the two parties in the upper chamber, with Vice President-elect Kamala Harris holding the tie-breaking vote.
  • Deutsche Bank named Bank of America a "top pick" due to its strong cost controls, solid capital returns, and positive factors.
  • Deutsche Bank analyst Matt O'Connor raised Bank of America's price target to $35 from $30 and maintains a buy rating on the shares.
  • Benchmark 10-year Treasury note yields rose above 1% for the first time in ten months.

Statistics:

  • JPMorgan Chase & Co. (JPM) shares rose 4.6% on Wednesday.
  • Bank of America (BAC) shares rose 7.1% on Wednesday.
  • Citigroup (C) shares rose 6.4% on Wednesday.
  • Wells Fargo & Co. (WFC) shares rose 7.6% on Wednesday.
  • Vice President-elect Kamala Harris would hold the tie-breaking vote in a 50-50 Senate.
  • Benchmark 10-year Treasury note yields rose above 1% for the first time in ten months.

Sources:

  • https://www.thestreet.com/investing/solar-shares-rise-georgia-elections
  • National Public Radio, quote from Jon Ossoff remarks.
  • The Fly, quote from Deutsche Bank analyst Matt O'Connor.
  • JPMorgan Chase & Co. (JPM) (https://secure2.thestreet.com/cap/prm.do?OID=038652)