May 21, 2020 - Economy & Business

Banks are underperforming during the stock market's coronavirus recovery

Felix Salmon, author of Edge
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Data: FactSet; Chart: Axios Visuals

The S&P 500 hit a curious milestone earlier this month: Less than 10% of its market capitalization was made up of financial services companies. That ratio was as high as 22% in 2007, before the 2008 financial crisis.

Why it matters: This is not a financial crisis. America's banks are well capitalized, the Fed has restored liquidity to the markets, and trust in the financial sector is hitting new highs. Still, banks are severely underperforming the stock-market recovery.

The financial companies in the S&P 500 include all the major banks, as well as other giant companies like Berkshire Hathaway, BlackRock, and American Express.

  • Together, they're worth some $2.4 trillion — but that's only 10% of the $24 trillion market cap of the S&P 500 as a whole.

By the numbers: An update to Edelman's trust barometer shows 65% of Americans saying that they trust their country's banks. That's up from 54% at the end of last year and 42% at the end of 2012.

Go deeper: Big banks trade profits for coronavirus insurance

Go deeper

Updated 39 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 6,724.516 — Total deaths: 394,018 — Total recoveries — 2,996,832Map.
  2. U.S.: Total confirmed cases as of 9 p.m. ET: 1,894,753 — Total deaths: 109,042 — Total recoveries: 491,706 — Total tested: 19,231,444Map.
  3. Public health: WHCA president says White House violated social-distancing guidelines to make reporters "a prop" — Jailing practices contribute to spread.
  4. Sports: How coronavirus could reshuffle the sports calendar.
  5. Jobs: Better-than-expected jobs report boosts stock market.
  6. Media: The Athletic lays off 8% of staff, implements company-wide pay cut.

Scoop: German foreign minister to travel to Israel with warning on annexation

Heiko Maas. Photo: Michael Kappeler/picture alliance via Getty Images

German Foreign Minister Heiko Maas is expected to travel to Israel next week to warn that there will be consequences if Israeli leaders move forward with plans to annex parts of the West Bank, Israeli officials and European diplomats tell me.

Why it matters: Israeli and European officials agree that if Israel goes ahead with unilateral annexation, the EU will respond with sanctions.

Minneapolis will ban police chokeholds following George Floyd's death

A memorial for George Floyd at the site of his death in Minneapolis. Photo: Steel Brooks/Anadolu Agency via Getty Images

Minneapolis has agreed to ban the use of police chokeholds and will require nearby officers to act to stop them in the wake of George Floyd's death, AP reports.

Why it matters: The agreement between the city and the Minnesota Department of Human Rights, which has launched an investigation into Floyd's death while in police custody, will be enforceable in court.