According to external sources, Citi has recently lowered the perception of the US bank block, which is at the forefront of this year ' s performance and where there is less space to continue. It was reported that the banking unit had previously benefited from interest rate expectations, profitability and the return of funds, but valuation was no longer cheap after a clear round of increases.

Citigroup turns more cautious.

According to the article, Citi believes that the previous strong performance of the bank block already reflects a number of good interests. As stock prices continue to rise, so does the market ' s demand for subsequent performance improvements. It would be more difficult for the plate to continue at its earlier rate of increase if the basics were not further ahead of expectations.

Citi’s judgement does not point to a sudden deterioration in the industry, but rather emphasizes a change in the risk return ratio. In other words, the main factors driving the upswing are weakening and the follow-up may shift from a general increase to a polarization.

Valuation and interest rates become the focus

It was mentioned that the current market's judgement of the interest rate path remains a significant factor affecting the bank equity. If changes in the interest rate environment are no longer as favourable as before, the valuation support of the bank block may be reduced.

At the same time, the relative attractiveness of the banking unit may decline after a round of leadership. For institutional investors, more explicit profit improvements or valuation rehabilitation opportunities for other plates could increase the pressure on financial rotation.

  • Large increases in the prior period and better valuation recovery
  • Follow-up increases rely more on performance to continue
  • The money could be turned to other more expensive segments.

Blocks or enters the fragmentation phase

The article suggests that the market ' s focus on the banking unit may then shift from the overall opportunities of the plate to the individual stock differences. Capital strength, loan growth, net interest-rate performance and the recovery of the investment bank ' s operations all affect the equity performance of different companies.

This means that the rise in the bank stock may not necessarily end immediately, but the overall windfall phase may be slowing down. For the market, this judgement also reflects the fact that, after the continued high United States share, the agency has begun to place more emphasis on the valuation constraints and the plate wheel rhythm.