US bank stocks (Goldman Sachs and Bank of America in particular) may be at the heart of this most recent setback in the markets. They've performed terribly when measured against the S&P 500. Institutional and retail investors have fled US bank stocks in droves and this - more than anything - could be the real reason behind the market "fear" investors have been feeling of late.
There was a time when bank stocks were looked upon as the safe haven in the investing world. Even more so than the US dollar.
Banking Index vs SPY
What does it say, then, when Goldman Sachs can't keep pace with the stock market or even when pitted against the under-achieving Philadelphia Bank Index?
Goldman Sachs vs SPY
The "People's Bank," has lost ground to a basket of US bank stocks, despite all the tax payer's money the US government has thrown at it. How is this possible and why has it happened?
Goldman Sachs vs Phildadelphia Bank Index
As bad as Goldman Sachs has performed, another US government fave, Bank of America, has fared even worse.
Bank of America vs Philadelphia Bank Index
All that tax payer money and it seems investors still want nothing to do with either of these two US banking icons.
That doesn't bode particularly well for the US banking sector - or the stock market - as a whole.
