CE 100 Index Climbs 4.2% as Banking Names Rally on Possible Rate Cuts

A broad stock market rally was the hallmark of last week’s trading action. The Federal Reserve signaled a pause on interest rate hikes and three possible rate cuts next year.

To that end, the CE 100 Index was swept up in the optimism and was 4.2% higher for the week and into its last full trading week before the year-end holidays.

Banks Rally as Fed Pause Refreshes

Banking names led the surge, up 7.7% as a group.

The prospect of rate cuts may stimulate demand for loans, while the banks themselves may face less pressure to offer higher interest rates on loans — with an attendant boost to net interest margins and profitability.

Within that pillar, LendingClub was up 20.4%, Ally Bank gained 15.8% and Goldman Sachs rallied 8.4%.

In Goldman-related news, and as detailed here, the bank is reportedly aiming to double the size of its $110 billion private credit business. Bloomberg reported that Goldman has traditionally been ahead of other big banks in the $1.6 trillion private credit market. Elsewhere, Goldman has been anticipating a substantial increase in trading volumes of blockchain-based assets in the next one to two years.

There is also growing interest in cryptocurrency derivatives trading among clients as the market awaits the approval of a spot bitcoin exchange-traded fund (ETF) by the U.S. securities regulator, Mathew McDermott, the investment bank’s global head of digital assets, told Reuters.

Within the Work pillar, which was 4.8% higher, DocuSign soared 26.9% as headlines swirled about a potential sale of the company. A DocuSign spokesperson told PYMNTS, “as a matter of policy, DocuSign does not comment on market rumors or speculation.” According to media reports, including outlets such as the Wall Street Journal, DocuSign is considering a leveraged buyout, with suitors including private equity firms and technology companies. The company went public in 2018.

In the Enablers segment, which added 2.7%, gains were muted by Vodafone’s 6.4% loss. As reported by Reuters this week, the French telecom Iliad has sought to finalize a proposal to Vodafone Italy to combine their Italian operations in a joint venture by the end of next month. The British telecom has reportedly been reviewing options for those operations in a bid to improve profitability. Reuters also reported that Vodafone is mulling a combination of some of its assets with Swisscom’s Italian unit Fastweb.

iRobot Deal Under the Microscope

Elsewhere, iRobot shares sank 5.2%. As noted here,  on Monday (Dec. 18), Amazon is set to defend its $1.4 billion acquisition of the robot vacuum maker in front of senior officials from the European Commission and national regulators. The regulators have expressed concerns over how the competitive landscape for robot cleaners might be impacted by the Amazon/iRobot combination — and whether a monopoly might result from the deal.