What happened
The stock market is having a great day on Friday, and Royal Bank of Scotland (NWG -1.67%) is doing better than most. As of noon EDT, the U.K.-based bank was up by more than 12%.
So what
A few factors could be helping propel Royal Bank of Scotland higher, but the main driving force of the rally is new developments in the Brexit saga.
Image source: Getty Images.
Specifically, there has been little hope for a Brexit deal before the current Oct. 31 deadline, but that seems to be changing. European Council President Donald Tusk indicated on Friday that a deal could be possible.
There have been fears that a so-called hard Brexit could be coming. Prime Minister Boris Johnson has said that Brexit would occur by Oct. 31 with or without a deal, and while an extended deadline is the more likely outcome of failure to reach a deal, a no-deal Brexit could be disastrous for economic stability in the U.K.
In addition to Brexit, Friday is a strong day in the stock market in general, fueled by renewed hopes of a U.S. trade deal with China. Bank stocks are particularly strong performers, with the financial sector up by nearly 2% on the day.
Now what
To be perfectly clear, a Brexit deal is not imminent. This move is fueled by optimism that a deal could happen. If it does, there could be a lot more room to climb for Royal Bank of Scotland. If not, today's gains could end up being erased, especially if the U.K. leaves the European Union without a deal.
