Why Regional Bank Stocks Will Benefit More From a COVID-19 Vaccine
Bank stocks surged after Pfizer released promising data on its coronavirus vaccine Monday -- and regional banks did best of all.
On the day of the announcement, the SPDR KBW Regional Banking ETF (NYSEMKT: KRE), which tracks regional bank stocks, climbed by 15.4%, That result beat both the KBW Nasdaq Bank Index, which tracks large bank stocks, and the NASDAQ OMX ABA Community Bank index, which tracks smaller bank stocks. Those two rose roughly 13.5% and 12.8%, respectively.
The gap between those market responses can be attributed to a key difference in those bank classes' business models. It's a difference that ties the health of regional banks somewhat more closely to the state of the pandemic than both their larger and smaller counterparts, and suggests that they'll benefit a bit more from the swift arrival of a vaccine.
Source Fool.com