Financial Mix: US Stocks Dip, Non-US Surge Amidst Crypto Miners' Loss

Financial stocks commenced the second quarter with losses, driven by the decline in bitcoin prices. Bitcoin miners CleanSpark, Marathon Digital, and Riot Platforms suffered the most significant losses, while Coinbase, a cryptocurrency exchange, also faced a downturn. In contrast, non-U.S. banks outperformed, benefiting from the weaker U.S. dollar, with Grupo Financiero Galicia, Bancolombia, Banco Macro, HDFC Bank, and NatWest Group posting notable gains.

Financial Stocks Post Mixed Performance in First Week of Q2

Financial stocks experienced a lackluster start to the second quarter of 2023, with the Financial Select Sector SPDR ETF (XLF) declining 1.3%, slightly underperforming the broader S&P 500's 1% dip.

Cryptocurrency Miners Tumble with Bitcoin Price

Bitcoin (BTC) miners faced significant losses as the cryptocurrency's price suffered a decline this week. CleanSpark (CLSK) plummeted 26.5%, Marathon Digital Holdings (MARA) retreated 18.4%, and Riot Platforms (RIOT) lost 16.7%, marking the steepest declines among financial stocks.

Crypto Exchange and Insurance Company Join Financial Losers

Alongside BTC miners, Coinbase Global (COIN), the largest cryptocurrency exchange in the United States, witnessed a 9.1% decline. The company's acquisition of a restricted dealer license in Canada came amidst ongoing regulatory scrutiny in the US.

Specialty insurance company Kinsale Capital Group (KNSL) also posted a substantial loss of 14.6%.

Non-U.S. Banks Surge on Weaker Dollar

In contrast to the downward trend in US-based financial institutions, non-U.S. banks benefited from the ослабление доллара. Argentina's Grupo Financiero Galicia (GGAL) emerged as the top gainer, advancing 7.7%.

Other notable performers included Colombian lender Bancolombia (CIB), which climbed 6.3%, Argentina-based Banco Macro (BMA) with a 6.1% jump, India's HDFC Bank (HDB) rising 5.4%, and NatWest Group (NWG) from the UK gaining 5.2%.

Analysts' Insights

Analysts have weighed in on the recent performance of financial stocks. Some speculate that CleanSpark may benefit from the upcoming Bitcoin halving event, while others caution that the risk-reward proposition for HDFC Bank remains uncertain.

Citi's research team has identified several highly rated stocks and undervalued stocks within the financial sector, providing investors with valuable insights for portfolio management.