Posted on 02/05/2016 6:15:44 AM PST by Citizen Zed
Shares in some of the world's biggest banks are plunging. Financial stocks in the S&P 500 are down more than 11% so far this year. That's worse than oil, energy stocks, and even the emerging markets index. European banks have fallen even further.
Deutsche Bank (DB) has lost 31% so far this year, Unicredit (UNCFF) is down 35%, and Credit Suisse (CSGKF) is 30% down. Barclays (BCLYF), BNP Paribas (BNPQF), Societe General (SCGLF), and UBS (UBS) have all lost about 20% since the beginning of 2016.
Bank earnings have generally been disappointing. Credit Suisse shares hit a 24-year low after it posted its first loss since 2008, and BNP Paribas suffered a 50% drop in net income in the fourth quarter.
Even JPMorgan Chase (JPMPRA), which had a bumper quarter, warned of a "challenging" start to 2016 because of volatile markets.
(Excerpt) Read more at money.cnn.com ...
Many oil companies are in serious trouble. If oil prices don’t go up within the next year, they won’t be able to continue their dividends.
Banks, on the other hand, are financially strong and making plenty of money. The market doesn’t like them right at the moment, but this is no reason to avoid the stocks.
Negative rates. No rate spread to earn money from, get ready for your banking fees to go up even more as that’s one of the few ways left for them to make money.
If rates go negative, I’m considering investing in Amazon.com gift cards.
I bought some Bank of America stock since it was really cheap. The P/E was only about 6. I think it is near the bottom.
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