2 Major European Bank Stocks Have Thumped the S&P 500 Index This Year. They Still Trade at Less Than 65 Cents on the Dollar

It's been a wild year for the benchmark S&P 500 (SNPINDEX: ^GSPC). The index started the year on a high note and then got crushed, mainly due to concerns about U.S. President Donald Trump's tariffs. The index fell nearly 20% from highs seen in late February, but then battled back once Trump announced a 90-day pause on implementing the higher tariffs. It has since recouped most of its losses. The S&P 500 was only down about 4% (as of May 8), which isn't so bad, all things considered, although it could also suggest that the market isn't fully reflecting potential struggles ahead. That said, difficulties in one market open opportunities in others. Two major European bank stocks have thumped the S&P 500 this year, and they still trade relatively inexpensively.Shares of the large British bank Barclays (NYSE: BCS) have risen nearly 23% this year. During the past year, Barclays is up 54%. European banks have not fared well since the Great Recession, especially compared to their U.S. counterparts. They have struggled due to a combination of extremely low interest rates, weak gross domestic product (GDP) growth, and heightened regulation. Interest rates in Europe were negative for a number of years, making it very difficult to profit under the traditional bank model, which involves borrowing money at low short-term rates and lending it out at higher longer-term rates.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool