The Globe and Mail reports in its Saturday edition that over the past three months, the Big Six banks have moved 16 per cent higher on average, not including dividends. The Globe's David Berman writes that after underperforming the S&P/TSX Composite Index through the first 10 months of 2023, bank stocks have since moved into the passing lane and have outperformed the benchmark. The sector is now just 8 per cent below its 52-week high. That marks an impressive comeback after being down 22 per cent in October when high interest rates, a looming recession and concerns about credit quality weighed heavily on bank stocks. "We feel that the market has perhaps become too optimistic even as we acknowledge that the outlook is better than we thought for much of last year," Meny Grauman, an analyst at Bank of Nova Scotia, said in a note last week. Bank stocks are tracking a profound shift in the bond market. Inflation is subsiding while economic activity in the United States and Canada is holding up. Expectations are the U.S. Federal Reserve and the Bank of Canada will cut interest rates this year. The year ahead for Canadian banks could be bumpy. For starters, it is far from clear that the U.S. will avoid a recession.