Here’s what could be in store for some of the largest financial firms in the United States including Bank of America (NYSE: BAC), JP Morgan Chase (NYSE: JPM), Wells Fargo & Co (NYSE: WFC), Citigroup (NYSE: C), CIT Group (NYSE: CIT), Genworth Financial Inc. (NASDAQ: GFIG), and Goldman Sachs (NYSE: GS).
Bank of America (BAC)
Bank of America’s shares were hammered last week, dropping from $16.16 per share at the beginning of the week to $14.58 at the end of the week. With the depressed market value and new announcements that Bank of America will expand its retail presence, it’s likely that Bank of America will have some form of small rally this week. All is not well with Bank of America though, there are still underlying risks of commercial lending losses, Bank of America is still searching for its next CEO and then there’s the TARP funds the bank has to repay.
JP Morgan Chase’s stock fell from $45.14 on Monday to $41.77 by the end of the week because of rumors the continuing decline in consumer credit and rumors that the lending portfolio it acquired from Washington Mutual has had an extremely high default rate. Although JP Morgan had a great earnings announcement a couple of weeks ago, there’s not much good news that will bring up its share price this week.
Wells Fargo (NYSE: WFC)
Wells Fargo also took a hit this week with its share pricing falling from $29.29 on Friday to $27.52 on the end of the week. The bank announced a dividend on Tuesday of $.05 per share which gave it a slight bump, but underlying fears about the credit market hurt WFC’s share price last week. There’s not much expected in the news this week for Wells Fargo and it will likely follow industry trends for the week.
Citigroup (NYSE: C)
Citigroup dropped from $4.49 at the beginning of the week to $4.09 at the market’s close on Friday, indicating a 9% drop in value. Last week, rumors that Citigroup would have to take a $10 billion tax deferred asset write-down hurt its value. Citigroup will likely continue to suffer in the market this week until it addresses the issue of the write-down publically.
Citigroup is also suffering significantly in consumer sentiment with reports that its raising most consumers credit card rates to 29.99% and that it had shut-down credit cards without properly notifying consumers. These harsh moves might indicate significant credit issues for Citigroup.
CIT Group (NYSE: CIT)
CIT group was probably one of the hardest hit stocks this week dropping from $1.16 per share to $0.72 per share, representing a 38% drop in its share price. With CIT Group’s fate still largely unknown for its common equity holders, the stock is in limbo with no official word on its pre-packaged bankruptcy filing. Until there’s an announcement about what will happen to common shareholders, CIT Group’s stock is in for a roller coaster ride.
Genworth Financial Inc. (NASDAQ: GFIG)
Genworth Financial is a stock that provided investors some surprises last week. Instead of posting an expected loss, it posted a gain, but that gain is deceiving. In its earnings report, Genworth said, “Book value per share grew 10 percent sequentially to $25.42 per share from $23.01 per share as of June 30, 2009, reflecting improvement in the investment environment and the additional equity capital partially offset by an increased number of shares. Book value per share, excluding accumulated other comprehensive income (loss), decreased sequentially to $25.37 per share from $27.33 per share as of June 30, 2009.” As a result of its earnings, Genworth Financial dropped from $6.62 on Monday to $5.15 on Friday. It’s possible that the company’s stock will appeal to value investors this week.
Goldman Sachs (NYSE: GS)
Goldman Sachs had a relatively quiet week on the market, dropping from $176.72 per share to $170.17 per share. This 3.7% drop isn’t a result of any specific news story, but rather represents a decline of the market as a whole this week. There are no pending news stories which would dramatically affect Goldman Sachs’ share price this week and it will likely follow the rest of the financials.
