Wells Fargo & Company (NYSE: WFC)
It used to be that Alcoa(AA) was the the stock recognized as the one to kick off each earnings season.
However, since the company went through a transformation, splitting its operations into two different subsidiaries- one remaining in the S&P 500 Arconic (ARNC) and the other Alcoa(AA) not, we now have the banking industry to look to as the signal of the beginning of earnings season.
To say that the season has started with a bang would be putting it lightly. Not only did Wells Fargo report their earnings but so did JPMorgan and Citibank. While Citibank and JP Morgan beat on earnings and revenue, Wells Fargo did not fare so well.
The company had revenues of roughly $22 billion dollars when many estimates came in a bit higher around $22.3 billion. To add insult to injury it came out that Warren Buffett, CEO of Berkshire Hathaway-one of Wells Fargo’s largest shareholders has begun selling shares that it owns.
The amount is speculated to be about 9 million shares of which it has stated it’s sold 7 million already. Shares closed down 3.3% on heavy volume. Volume came in at 47 million shares compared to a daily average of about 18 million.
The stock is now down 6.36%for the week.
But it wasn’t only Wells Fargo that took it on the chin today. Shares of Citigroup as well as JPMorgan closed sharply lower even though they had better earnings.
All of the major indices and ETF’s (SPY,DIA,QQQ) closed lower and may be an indication we will see a correction out of this 1st quarter of 2017 earnings season.
Below you will see three charts showing these three stocks. Highlighted you can see the oval areas on each showing the long range red candlestick bars in today’s trading action.
All are significantly below it’s 8 day exponential moving average which this author uses as a guage of support or resistance in short-term trading.
With a holiday shortened week this week with good Friday and Easter weekend, Monday morning will be very interesting in the financial and trading world.
Many Traders and investors may look for added weakness following the action in the big Banks from Thursday. You can bet professional traders will be at their screens bright and early Monday waiting to strike.
CFO John Shewsberry had this to say:
“Expenses were elevated compared with last quarter, driven by typically-higher first quarter personnel-related expenses,” Shewsberry said. “Credit results improved, with lower net charge-offs and nonaccrual loans, and we benefited from lower income tax expense.”
A company’s press release added, “Period-end loan balances were $958.4 billion at March 31, 2017, down $9.2 billion from December 31, 2016, driven by a decline in credit card balances due to seasonality, a slowdown in new credit card account openings, and a continued decline in junior lien mortgage loans,” said the bank’s release. “In addition, there was an expected decline in auto loans from the fourth quarter as continued proactive steps to tighten underwriting standards resulted in lower origination volume.”
Wells Fargo & Company, a diversified financial services company, provides retail, commercial, and corporate banking services to individuals, businesses, and institutions. Its Community Banking segment offers checking, savings, market rate, and individual retirement accounts, as well as time deposits and remittances; and lines of credit, automobile floor plan lines, equity lines and loans, equipment and transportation loans, education and residential mortgage loans, and debit and credit cards.
This segment also provides equipment leases, real estate and other commercial financing, small business administration financing, venture capital financing, cash management, payroll services, retirement plans, merchant payment processing, and private label financing solutions, as well as purchases retail installment contracts.
Its Wholesale Banking segment offers commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, international trade facilities, trade financing, collection, foreign exchange, treasury management, institutional fixed-income sales, commodity and equity risk management, insurance, corporate trust fiduciary and agency, and investment banking services, as well as online/electronic products.
This segment also provides construction, and land acquisition and development loans; secured and unsecured lines of credit; interim financing arrangements; rehabilitation loans; affordable housing loans and letters of credit; loans for securitization; and real estate and mortgage brokerage services.
The companys Wealth and Investment Management segment offers financial planning, private banking, credit, and investment management and fiduciary services, as well as retirement and trust services.
It serves clients through approximately 8,600 locations and 13,000 ATMs; online and mobile banking; and offices in 42 countries. Wells Fargo & Company was founded in 1852 and is headquartered in San Francisco, California.-YahooFinance