Thanks to favorable Covid-19 vaccine developments, the stage is set for bank stocks to rebound in a big way in 2021
Bank stocks popped big this week on the back of favorable Covid-19 vaccine news from Pfizer (NYSE:PFE). The general idea is that widespread distribution of a highly effective vaccine will spark a rapid economic recovery in 2021, and by extension, breathe life back into depressed bank stocks.
Over the past five days, the SPDR S&P Bank ETF
(NYSEARCA:KBE) has rallied about 10%.
That’s a big move for the normally dormant and unexciting
bank sector.
The analyst team over at Wells Fargo thinks that there is
more to come. Much more.
“We advise getting aggressive on Banks despite Monday’s…
run-up. In Banks we have historic valuations, significant scope for upside
potential, an uncrowded opportunity, and catalysts in the form of
fundamentally-driven reflation and near-term Covid solution(s),” analysts at
Wells Fargo said in a recent research note.
I couldn’t agree more.
Bank stocks are dirt cheap today because the U.S. economy is
in shambles. But that broken economy is recovering, with the recovery set to
accelerate in 2021 thanks to an effective vaccine. As the economic recovery
accelerates, dirt-cheap bank stocks will rally in a big way.
With that in mind, here are my five favorite bank stocks to
buy to play the economic recovery:
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