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Financial Stocks’ $1 Trillion Wipeout Brings Echoes of 2008

  • Yet profit decline expected to be shorter and shallower
  • Risk of negative rates and dividend cuts weighing on banks
Goldman Sachs Group Inc. headquarters stands in New York.
Photographer: Christopher Lee/Bloomberg

After years of stress testing, financial companies might have been better positioned to withstand a market shock such as that triggered by the coronavirus. Instead, they’re standing out as persistent losers.

Down 29% since January, banks and insurers have trailed the S&P 500 by 20 percentage points, their worst performance at this point of a year on record. Along the way, about $1 trillion has been wiped off their market value, an amount that rivals the annual total of $1.2 trillion seen at the depths of the global financial crisis.