Bank stocks lagged Tuesday’s market rally, pressured by concerns over whether Greece’s Parliament will approve certain austerity measures that are critical to its acceptance of a debt-assistance package backed by the European Union and International Monetary Fund.
At risk is $114 billion in aid that is contingent on Greece’s agreement to specific austerity measures and the accelerated sale of certain state assets. Without the package, Greece is in danger of failing to meet debt obligations due in July and August, which would seriously strain certain European and U.S. banks.
“I think it’s just nervousness ahead of the Greek vote,” said Marc Pado, U.S. market strategist for Cantor Fitzgerald. “It still all gets down to the vote.”
Pado added he believed Monday’s upswing in bank stocks was more of a “relief rally” staged by investors, who had feared the new capitalization requirements for major banks drafted this past weekend in Switzerland would be harsher.
“We believe MasterCard’s current multiple is not reflective of the uniqueness and earnings power of the underlying business model. While ongoing regulatory concerns will likely prevent MasterCard from ever achieving its peak multiple again, and the best days of pricing power are likely over, we see room for upside to 2011/12 consensus estimates,” Jefferies said.
The analysts expressed similar sentiment regarding Visa, saying: “We believe Visa’s core position in the payments value-chain remains safe for the foreseeable future. Regulatory concerns are understandable, but we think the ultimate financial impact of the Durbin rules (to be released Wednesday) will be manageable.”
Dow Jones Industrial Average
(DJI: ^DJI )| Index Value: | 12,188.69 |
|---|---|
| Trade Time: | 4:01PM EDT |
| Change: |  145.13 (1.21%) |
| Prev Close: | 12,043.56 |
|---|---|
| Open: | 12,042.28 |
| Day's Range: | 12,042.28 -12,190.43 |
| 52wk Range: | 9,596.04 -12,928.50 |
