Banking stocks have dropped significantly in 2020 as the industry's profits are hobbled by low interest rates and increased provisioning as bankers prepare for a potential surge in credit quality issues tied to the ongoing coronavirus epidemic. Meanwhile, large tech firms such as Apple Inc., Amazon.com Inc., Microsoft Corp. and Alphabet Inc. are setting new valuation records and each have a market capitalization above $1 trillion.
On Aug. 19, Apple became the first U.S. company to break above $2 trillion in market capitalization and has since trended even higher. By comparison, the U.S.'s largest bank by assets, JPMorgan Chase & Co., had a market cap of $296.7 billion as of Aug. 20. In fact, the market capitalization of every publicly traded U.S. bank combined, just shy of 850 companies, according to S&P Global Market Intelligence data, was only $1.283 trillion as of Aug. 20.
Alphabet, the laggard of Big Tech's trillion-dollar stocks in 2020, has still seen its shares return 17.7%, compared with a 6.1% return for the S&P 500. Bank of America Corp., the best-performing bank among the U.S.'s four banks with more than $1 trillion in assets, saw its shares return negative 27.8% in 2020. Shares in Wells Fargo & Co., meanwhile, have dropped more than half.