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U.S. Bancorp Message Board

  • fsbsgillie fsbsgillie Apr 3, 2014 11:22 AM Flag

    Getting Hit

    A lot of the banks seem to be getting hit with downgrades. C, USB, BBT, and RF all get downgrades. I can't see that anything has changed in the last several days, Looks strange.

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    • gwendolyn_modestino6955 gwendolyn_modestino6955 Apr 18, 2014 11:24 AM Flag

      Schnider, exactly. Apple, the greatest company in the universe when it was under Steve Jobs

    • We would have to know why the analyst downgraded them to be sure. But I can speak to what has changed, there are a couple of things that I see personally.
      Number one, the financials are expected to have very little growth in their earnings over the next 6 months therefor if their price increased relative to their zero growth forcast they may be bumping up against realistic "peg" ratio'.
      Secondly, for myself, there may be an over reaction to how the market perceives what the Fed is going to do.
      Earlier in March Yellin gave some guidance toward increasing rates in mid 2015 which would help banks invest the trillions of dollars they have parked at the Fed. Well fast forward to this Monday (I think) where Yellin gave what many have said was the most dovish speech ever heard from a Fed chairman.

      If the Fed were to raise the Fed funds rate from .25% up to lets say 2.25%, we are talking about Wells earning about an additional $8 billion annually. In other words we need short term rates to go up, all of this talk about the need for a steeper yield curve is also correct but not exactly a disaster if we don't get it. What we need is higher rates imo.

    • Gillie, i am keeping my short position. Still got half. Looks like there is support for USB at around these levels but i will maintain my position at this time.

39.86-2.37(-5.61%)Jun 24 4:02 PMEDT