JPMorgan released a note to investors upgrading regional stocks, including Western Alliance, Zions Bancorp, and Comerica, to overweight.
The move came as bank stocks declined early in the week after it was announced that financial authorities shut down First Republic Bank.
- JPMorgan also purchased the assets of First Republic Bank; as such, it is interested in helping stabilize the regional bank industry.
- JPMorgan and other major financial institutions previously attempted to support regional banks by depositing $30B in First Republic Bank to demonstrate their confidence in the bank's stability.
- Following the note from JPMorgan, PacWest shares rose by over 80%, while Western Alliance shares rose by just under 50%.
- The SPDR S&P Regional Banking ETF was up more than 6% on Friday.
- In related news, the SEC has announced that it is investigating executives at First Republic Bank for possible insider trading.