Banking crisis: Goldman Sachs sees 'encouraging sign' in Google search data

·2 min read

Maybe Treasury Secretary Janet Yellen and Fed chief Jerome Powell have done just enough — for now — to temper consumer concerns about the state of the U.S. banking system.

Google Trends search data crunched by Goldman Sachs show that the large initial increase in the public focus on banks perceived to be under stress has cooled over the past week (chart below). Search trends related to bank withdrawals also initially increased amid the busts this month of Silicon Valley Bank (SIVB), Signature Bank (SBNY), and Credit Suisse (CS) but have since normalized.

Goldman goes on to add that broader economic confidence amid the rolling bank crisis has only experienced a moderate decline, as indicated by the investment bank's GS Twitter Economic Sentiment Index.

Goldman's chief economist Jan Hatzius says the data is an "encouraging sign."

Fear on the banking crisis normalizes a touch.
Fear on the banking crisis normalizes a touch.

As consumer fear has pulled back a bit, bank stocks have caught a bid — particularly after Yellen promised further support for lenders if needed.

The KBW Bank ETF (KBWB) — which counts JPMorgan (JPM), Citigroup (C), and Bank of America (BAC) as its top three holdings — is up about 5% since last Friday's close. The closely watched bank ETF is down 24% in March to date, per Yahoo Finance data.

People walk past a Silicon Valley Bank sign at the company's headquarters in Santa Clara, Calif., Friday, March 10, 2023. The Federal Deposit Insurance Corporation is seizing the assets of Silicon Valley Bank, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis. The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday. (AP Photo/Jeff Chiu)
People walk past a Silicon Valley Bank sign at the company's headquarters in Santa Clara, Calif., Friday, March 10, 2023. (AP Photo/Jeff Chiu)

"U.S. large cap banks are cheap enough to own here, but the Fed’s stress test and CCAR process this June could pose a risk if regulators decide these firms should bolster their capital positions by cutting/merely maintaining dividends and stock repurchases," DataTrek co-founder Nicholas Colas explained on the push higher on bank names this week. "This outcome is not our own base case, but recent bank failures may spur regulators to be more cautious than they would otherwise have been."

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on the banking crisis? Email brian.sozzi@yahoofinance.com

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