Bank Tank!

The last few weeks bank stocks have managed to slide under the radar about their terrible performance. Today, that changed. The financial sector saw one of it its worst days in recent years. If you look at the charts you see other stocks make significant gains since the bottom we had at the end of March. Banks however saw little to no recovery at all. Why is this? It’s all due to the fact of the incredibly low interest rates we saw come middle of March. When interest rates are low banks have a much harder time making money. Most importantly, Wells Fargo is by far taking the hardest hit. Today the stock ($WFC) dropped 6.30% making new 10 year lows!! Ever since their 2016 account scandal Wells has had an asset cap of $1.95 trillion placed for them. Limited money to lend out, plus low interest rates, plus trying to set cash aside to stay afloat equals a disaster. Lets see how the banks continue to react after a horrible last few weeks, will they go lower?

-TJ Brescia

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