European Banks Are Backsliding

Over the last week, European banks have been the worst performing industry group in the MSCI World index.  As a group, they are down 4.57%, on average, and have underperformed the MSCI World index by 5%.  While banks in North America and Asia are not market leaders, they have not experienced the hit that their European peers have in the last week.  Since bank relative performance is often an input in models of financial conditions, this would suggest a slight tightening in financial conditions in Europe recently.

MSCI Europe Industry Groups Performance (%)

MSCI North America Industry Group Performance (%)

MSCI Asia Industry Group Performance (%)

Only 3% of the banks in Europe experienced positive performance over the last week.

MSCI Europe Industry Groups - Percent Positive Performance

Banks in have Europe have been some of the structurally weakest stocks recently.  In the table below, we show the percent of companies in each industry group, in Europe, above 5 and 20 day moving averages.

MSCI Europe Industry Groups - Percent Above Moving Average

The move has been broad as only 9% of the European banks have outperformed the MSCI World index over the last 20 days.

MSCI Europe Industry Groups - Percent Outperforming MSCI World Index