North American financial stocks have been on a wild ride this week. Monday looked like it was the start of something beautiful, with countries agreeing on new international rules - known as Basel III - that settled some of the uncertainty in the sector. Indeed, much of the focus on Canadian banks this week has been when they'll resume dividend hikes.
However, Monday is looking more and more like a one-day wonder. The S&P/TSX financials index rose 1.3 per cent that day, but has fallen every day since then and is now unchanged for the week. The S&P 500 financials index rose 2.3 per cent on Monday, but has since fallen on three of the four following days and is now up a mere 0.8 per cent for the week.
Both subindexes trail their respective benchmark indexes during the week, meaning that financial stocks have actually underperformed the broader market.
Clearly, though, some stocks have been performing better than others over this period. In Canada, Royal Bank of Canada and Bank of Nova Scotia are the winners, with gains of 0.9 per cent and 1.4 per cent, respectively. On the other hand, Canadian Imperial Bank of Commerce has fallen 1.1 per cent and Bank of Montreal has fallen 1.9 per cent.
In the United States, JPMorgan Chase & Co. is up 1 per cent and Citigroup Inc. is up 1.3 per cent. But Bank of America Corp. has fallen 1.1 per cent.