Global banking stocks are experiencing an enormous, enormous, enormous, enormous bull market.

In yesterday’s article comment section, a friend shared some value-oriented fund managers with me—mentioning Yang Jinghan and Huatai-PB New Financial Real Estate Fund. But nowadays, virtually all high-performing financial and real estate funds hold almost no real estate stocks; instead, they’re predominantly invested in bank stocks, supplemented by insurance and brokerage firms—otherwise, their performance wouldn’t have been so strong. The ‘Big Four’ state-owned banks have surged dramatically. Starting this week, amid heightened volatility triggered by Fed official Christopher Waller’s hawkish remarks over the weekend, banks—as well as the ‘Two Oil Giants’ (PetroChina and Sinopec) and coal stocks—have collectively served as hedges against market uncertainty. Coal stocks plunged yesterday. (They’d risen too much; further increases in coal prices could trigger regulatory intervention—perhaps even ‘A4-paper-level’ restrictions.) Today, despite a sharp rise in U.S. oil prices overnight, the ‘Two Oil Giants’ tumbled sharply. (Purely baffling.) Only bank stocks—especially the major state-owned banks—stepped up alone to stabilize the market. (Truly, the ultimate safe haven.) Yesterday, Bank of China hit an all-time high in share price. Since 2021, hasn’t every one of the Big Four state-owned banks delivered more than a doubling in price? It’s genuinely fascinating: six years ago, the dominant narrative was about China’s unstoppable consumption upgrade as the world’s most populous nation—a grand, epic story. Today, that narrative has been replaced by concerns over peaking population and deflation. Yet ironically, those very ‘low-quality’ businesses from back then have now delivered a five-year bull market. Back then, a popular and widely adopted strategy was ‘A-share consumer stocks + U.S. tech stocks.’ In recent years, it’s evolved into ‘A-share dividend-yield stocks + U.S. tech stocks.’ While A-share bank stocks have surged, global banking stocks have simultaneously entered a massive bull market—whether in Hong Kong, Europe, Japan, or the U.S., the trend is unmistakable. Global banking stocks are experiencing an enormous, enormous, enormous, enormous bull market. Although banking lacks the clear, globally synchronized industrial tailwinds seen in sectors like technology or liquor, stock price movements among major global banks remain highly correlated. 1. Leading the pack is Italy’s UniCredit Bank—its total return (including dividends, adjusted for reinvestment) stands at 10x. We all know Europe’s economy has been sluggish, largely absent from this AI revolution, and preoccupied with migration crises and the Russia-Ukraine conflict—yet look at its banking stocks. Spain’s Santander Bank, the Netherlands’ ING Group, Germany’s Deutsche Bank, Switzerland’s UBS Group, and France’s BNP Paribas—all have delivered solid, commendable performance. HSBC, listed in Hong Kong and sharing identical shareholder rights with its UK parent, has surged over 450%. Compared to the U.S. market’s heavy emphasis on tech and growth, Europe lacks prominent tech champions—but does host several large, globally operating companies in consumer staples and finance. Thus, in Western markets, the Nasdaq and S&P 500 represent growth, while European equities broadly represent value. 2. U.S. financial stocks aren’t top performers here, but Canada’s Royal Bank of Canada and Toronto-Dominion Bank—and Australia’s Commonwealth Bank—have posted equally impressive gains. 3. Asian banking stocks are also in a full-blown bull market. Japan’s Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group have soared roughly 8x and 7x respectively. South Korea’s KB Financial Group has gained 400%—not matching Samsung or SK Hynix, but still highly profitable. Singapore’s DBS Group has risen 350%. As for the Big Four Chinese banks listed in Hong Kong—Agricultural Bank of China, Bank of China, China Construction Bank, and Industrial and Commercial Bank of China—their gains go without saying. Yet compared to these peers, they seem comparatively modest. Globally speaking, aside from India—which has suffered a severe bear market over the past two years, dragging down share prices—virtually every major, recognizable bank stock worldwide is in a bull market. So while domestic bank stock rallies are certainly driven partly by insurance capital inflows and dividend-focused allocations, I believe there are deeper, broader, globally synchronized factors at play—not just local fund behavior.

Wall Street is again declaring a bull market—this time claiming U.S. stocks can rally further?

With year-end approaching, Wall Street is growing increasingly optimistic about U.S. equities next year. Recently, RBC Capital Markets (Royal Bank of Canada) joined the bullish camp, setting a new 12-month target for the S&P 500 Index: 7,750 points. That implies nearly 14% upside from current levels. RBC didn’t reference its prior target—instead, it revised its forecasting methodology to adopt a rolling 12-month outlook, rather than a fixed year-end projection. This shift reflects a broader sentiment among institutions that this U.S. equity rally still has room to run. Among current Wall Street forecasts, RBC’s view ranks among the more optimistic—close to Deutsche Bank’s earlier 8,000-point target—and overall market sentiment remains decidedly positive. Lori Calvasina, RBC’s Head of U.S. Equity Strategy, cited several key supporting factors. The most critical may be expectations for Federal Reserve rate cuts next year. Drawing on historical data, she found that when the Fed cuts rates by no more than 1% within a 12-month window, the S&P 500 has historically averaged roughly a 13% gain over the same period. Market expectations for rate cuts are currently high: according to the CME FedWatch Tool, the probability of a cut at the December meeting has climbed to nearly 90%. Beyond rate-cut expectations, macroeconomic conditions and corporate earnings are also viewed as catalysts for continued gains. RBC believes that although economic growth may be uneven, the overall environment remains supportive for equities.

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