Regional Banks Shares Surge After Bill Gross Says It's Time to Buy
A few U.S. regional banks' shares surged on Thursday. Pimco's former CIO, Bill Gross, the "Bond King," recently said that he thinks "regional bank falling knife has hit bottom," suggesting that the price has finally bottomed out while deviating from his previous statement that he wanted to wait a little longer before purchasing.
In the latest tweet on X, the co-founder and former chief investment officer of Pacific Investment Management Co. is claiming to buy $Truist Financial(TFC.US$ , $Citizens Financial Group Inc(CFG-D.US)$ ., $KeyCorp(KEY.US$ , and $First Horizon National(FHN.US$, he wrote in a post on X. Shares of each company jumped by 6% or more, outpacing the 3.5% gain in the S&P 500 Banks index.
In his last post on Oct. 30, Gross claimed that regional banks have "extraordinary long-term value," but was waiting to own some of them at 60% of book value and 7% yields. A week earlier, he said he saw a US recession in the fourth quarter.
The sharp selloff in Treasuries, which drove rates to almost 16-year highs and decreased demand for mortgages and other consumer loans, has put pressure on regional banks since the beginning of 2023. Benchmark 10-year Treasury rates fell to three-week lows on Thursday, after smaller-than-expected Treasury issuance and hints from the Federal Reserve that it is nearing the end of its rising cycle.
Source: Reuters
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