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Data: FactSet; Chart: Andrew Witherspoon/Axios

An index that tracks the major banks is underperforming the broader market. And not just in light of the stock market rout — it's underperformed for most of the past year.

Why it matters: The higher interest rate environment that's spooking investors is supposed to be good for banks. They can charge consumers more for lending, boosting profit. But the advantage is not showing up in these companies' stocks.

Why the slump in bank stocks? Analysts are pointing to banks' loan businesses, which has not been as strong as expected in a booming economy.

  • Last quarter, embattled Wells Fargo reported declining loan growth and recently warned at an investment conference that this quarter probably would not be any different.

What's going on: It isn't just that consumers are taking out fewer loans for fear of higher interest payments. There is more competition for lending from companies like Quicken Loans to private equity firms.

  • Banks are facing probably the "largest threat" from non-bank loan originators, Mark Doctoroff of MUFG's Financial Institutions Group told Axios.
  • Yes, these non-traditional lenders are backed by traditional banks, but it's not showing up as typical loan growth as it has in the past.
  • Another factor: post-financial crisis, banks have been more disciplined and diligent about the quality of loan and origination, Doctoroff points out.

What's next: A clearer picture of the health of the banks' loan business. J.P. Morgan, Citigroup and Wells Fargo report third quarter results today.

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Updated 5 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 20,755,406 — Total deaths: 752,225— Total recoveries: 12,917,934Map.
  2. U.S.: Total confirmed cases as of 9 p.m. ET: 5,246,760 — Total deaths: 167,052 — Total recoveries: 1,774,648 — Total tests: 64,831,306Map.
  3. Politics: House Democrats to investigate scientist leading "Operation Warp Speed" vaccine projectMcConnell announces Senate will not hold votes until Sept. 8 unless stimulus deal is reached.
  4. 2020: Biden calls for 3-month national mask mandateBiden and Harris to receive coronavirus briefings 4 times a week.
  5. States: Georgia Gov. Brian Kemp to drop lawsuit over Atlanta's mask mandate.
  6. Business: Why the CARES Act makes 2020 the best year for companies to lose money.
  7. Public health: Fauci's guidance on pre-vaccine coronavirus treatments Cases are falling, but don't get too comfortable.

Trump says he intends to give RNC speech on White House lawn

President Trump speaking to reporters on South Lawn in July. Photo: Jabin Botsford/The Washington Post via Getty Images

President Trump told the New York Post on Thursday that he plans to deliver his Republican National Convention speech from the White House lawn, despite bipartisan criticism of the optics and legality of the location.

Why it matters: Previous presidents avoided blurring staged campaign-style events — like party conventions — with official business of governing on the White House premises, per Politico.

Fauci's guidance on pre-vaccine coronavirus treatments

Illustration: Aïda Amer/Axios

Antibody drugs and various medicine cocktails against the coronavirus are progressing and may provide some relief before vaccines.

The big picture: Everyone wants to know how and when they can return to "normal" life, as vaccines are not expected to be ready for most Americans for at least a year. Two therapies are known to be helpful, and more could be announced by late September, NIAID Director Anthony Fauci tells Axios.