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The investment bank revealed that it sees “multiple catalysts over the next three months,” including an easing of investor concerns regarding Basel 3 Endgame (B3E) and more news on capital returns through the CCAR.
“Our analysis shows that banks have underperformed their normal relationship with macro assets (both KBE and KRE), leading us to see increased potential for upside asymmetry as we approach these catalysts,” said Goldman.
Goldman said it has identified call options on various US bank names where analysts are bullish on fundamentals, including Buy-rated Citigroup, which is also on the firm’s conviction list.
Furthermore, three new catalyst-based idiosyncratic trades were also introduced by the bank, including buying GM calls ahead of earnings on April 23, buying RCL calls ahead of earnings on May 2, and buying EXPE calls ahead of earnings on May 2.
