Global Bank-Stock Weakness Poses Challenge to Fed's Policy Plans
- Industry-index ratio to MSCI World sets 20-year low this week
- BofA's Hartnett sees indication of `deflationary expansion'
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Bank stocks are signaling the Federal Reserve may struggle to tighten credit after keeping interest rates near zero for seven years, according to Michael Hartnett, chief investment strategist at Bank of America Corp.’s Merrill Lynch unit.
The chart below tracks the ratio of the MSCI World Banks Index, consisting of 98 lenders based in developed markets worldwide, to the broader MSCI World Index. Hartnett made a similar comparison yesterday in a report.