Here’s the one reason US banks are rejoicing over Donald Trump’s victory

SINGAPORE (Nov 18): In the wake of Trump’s win, US bank stocks have surged.

The Financial Select Sector SPDR exchange-traded fund has rallied more than 10% since Aug 9. The rally has been supported by the surge in bond yields. JP Morgan Chase & Co, one of the largest components of the ETF, has hit all-time highs. Goldman Sachs Group and Bank of America are up 14%.

 This may be only the beginning of a sustained rally. Several US banks stocks are trading at a 40% discount to their tangible book value. This is almost two standard deviations from the mean over the last quarter century.

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