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Financial stocks managed to rise during the week even as a U.S. government default hangs in the balance. The Financial Select Sector SPDR ETF (NYSEARCA:XLF) rose 2.2%, outpacing the S&P 500’s (SPX) 1.7% gain.
Many of the biggest climbers were regional banks that dropped the most when banking stresses emerged in March. In the losers’ column are two Latin American banks and two Chinese fintechs.
The biggest gain, +41%, was notched by Upstart Holdings (NASDAQ:UPST), after it reached an agreement to sell up to $4B of consumer installment loans. The deal lowers risk for UPST by offloading loans from its balance sheet and gives it capacity to make new loans.
Western Alliance Bancorporation (NYSE:WAL) stock jumped 25% after its latest business update showed that its deposits increased by more than $2B since the beginning of Q2. It also described as “imminent” the sale of about half of the $6B of loans it had reclassified to held-for-sale in Q1 2023.
Comerica (NYSE:CMA) also took part in the regional bank rally, rising 20%;
Zions Bancorporation (NASDAQ:ZION) gained 19%; and
F&G Annuities & Life (NYSE:FG) increased 14%.
The biggest decliner, among financials stocks with market cap of at least $2B, was Qifu Technology (NASDAQ:QFIN), formerly 360 DigiTech, sliding 13%. The Shanghai-based fintech isn’t paying a dividend in Q1 as it changes its dividend policy, and Q1 results missed on the top and bottom lines.
Colombian bank Grupo Aval Acciones y Valores (NYSE:AVAL) dropped 8.1% for the week.
Hong Kong-based Futu Holdings (NASDAQ:FUTU) slipped 7.1% in the week that the fintech announced it’s pulling its app from Mainland China app stores; as a result, J.P. Morgan downgraded the stock to Neutral.
Argentinian bank Grupo Financiero Galicia dipped 6.3%; and
Insurance-focused company CorVel (NASDAQ:CRVL) also fell 6.3%.
Earlier on Friday, banks stocks slid as Janet Yellen called for more bank mergers.