U.S. equities are suffering another bout of weakness on Wednesday, falling into negative territory after a big intraday reversal pushed the Dow Jones Industrial Average back below the 26,000 level. The catalyst, as you may have guessed, was more fears on the trade front. Reports are crossing that adding Canada to the recently penned bilateral trade deal between the United States and Mexico could be more difficult than previously believed.
Also weighing on sentiment was a downgrade of the semiconductor sector by Goldman Sachs, an area I warned about on Tuesday.
The latest area of the market to take it on the chin are regional banks, which are being pressured by evidence of slowing loan demand as long-term interest rates drift higher. The worry is this sets the stage for housing market weakness. Here are seven stocks to sell now:
Suntrust Banks (STI)
SunTrust Banks, Inc. (NYSE:STI) shares are suffering their worst one-day drop since February, slicing down to late July levels and returning to its year-to-date trading range in the low $70s.
This comes despite an upgrade by analysts at B. Riley FBR back in July 23, citing an improved loan growth outlook and efficiency improvements.
The company will next report results on Oct. 19 before the bell. Analysts are looking for earnings of $1.41 per share on revenues of $2.4 billion. When the company last reported on July 20, earnings of $1.49 per share beat estimates by 18 cents on a 3.9% rise in revenues.
Citizens Financial Group (CFG)
Citizens Financial Group (NYSE:CFG) shares are melting lower, threatening to fall out of a sideways range going back to March with a test below its 50-day moving average.
Watch for a decline to the early July lows, which would then set up a drop back to the summer 2017 lows near $32 which would be a fall of more than 20% from current levels.
The company will next report results on Oct. 19 before the bell. Analysts are looking for earnings of 90 cents per share on revenues of $1.6 billion. When the company last reported on July 20, earnings of 88 cents per share beat estimates by three cents on an 8.1% rise in revenues.
US Bancorp (USB)
Shares of US Bancorp (NYSE:USB) are falling out of a two-month topping pattern to cut below its 20-day moving average for the first time since June. This after hitting resistance near the March rebound high of $55.
Zooming out, the price movements look to be part of a large head-and-shoulders reversal pattern going back to early 2017, with a neckline near $49 that traces to a price target of $40 — which would be worth a loss of roughly 26% from here.
The company will next report results on Oct. 17 before the bell. Analysts are looking for earnings of $1.04 per share on revenues of $5.7 billion. When the company last reported on July 18, earnings of $1.02 beat estimates by two cents on a 3.5% rise in revenues.
CenterState Banks (CSFL)
Shares of CenterState Banks (NASDAQ:CSFL) are dropping hard below their 20-day and 50-day moving averages, setting up another test of the 200-day average as prices fall away from the highs set back in May. The company is focused on the Florida market and is in the midst of integrating a recently approved purchase of Charter Financial (NASDAQ:CHFN).
Strong technical support from the 2016/2017 trading range lies below near $25, a test of which would be worth a 15% decline from current levels. Analyst sentiment is mixed, with Raymond James issuing a downgrade in May but Sandler O’Neill resuming coverage with a “buy” rating around the same time.
Sterling Bancorp (STL)
Sterling Bancorp (NYSE:STL) shares are moving sharply lower, cutting through both their 20-day and 50-day moving averages. Watch for a test of lows near $22 going back to late 2016. If that critical level doesn’t hold, it would set up a reversal of the late 2016 surge that saw shares gain nearly 60%. The company has, oddly enough, been caught in the scandal surrounding ex-Trump lawyer Michael Cohen, with charges of bank fraud involving loans from STL among others.
The company will next report results on October 23 after the close. Analysts are looking for earnings of 52 cents per share on revenues of $279.3 million. When the company last reported on July 24, earnings of 50 cents per share beat estimates by two cents on a 110.8% rise in revenues.
MB Financial (MBFI)
MF Financial Inc (NASDAQ:MBFI) shares are dropping down out of a tight three-month trading range, losing its 50-day moving average setting up a filling of the gap created by the surge seen in late May.
That would coincide with a test of the 200-day moving average and be worth a decline of more than six percent from here. The company is in the midst of a merger with Fifth Third Bank (NASDAQ:FITB).
The company will next report results on Oct. 23 before the bell. Analysts are looking for earnings of 72 cents per share on revenues of $239 million. When the company last reported on July 19, earnings of 68 cents per share beat estimates by two cents on revenues of $242.4 million.
Boston Private Financial Holdings (BPFH)
Boston Private Financial Holdings (NASDAQ:BPFH) shares are breaking down out of a cautious two-month uptrend that tested the rebound highs set in late July.
The stock is down 21% from the highs set in June and now threatens to fall out of a three-year consolidation range with critical support near the $14-a-share level.
Back on July 18, the company reported earnings of six cents per share or 21 cents when adjusted for pretax expenses and discontinued operations. Analysts were looking for earnings of 23 cents per share. Revenues totaled $103.7 million.