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Regional bank rebound may be short-lived

May 31, 2023

“Is the regional banking crisis really over? Not yet, according to Garrett DeSimone, head of quantitative research at OptionMetrics.

‘I don’t think we’re out of the woods yet. We’ve had a shift in attention to this tech driven AI rally,’ DeSimone told me, referring to the surge in Nvidia and other stocks riding the artificial intelligence wave.

DeSimone said he’d still be worried about the fact that a lot of regional bank stocks are heavily shorted. That means many investors are continuing to bet against them and the recent pops could very well turn out to be ephemeral, driven more by short squeezes than a true change in fundamentals.”

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