2 Bank Stocks Dragged by Rate Hike Fears

MS is headed for its sixth-straight loss today

Digital Content Manager
Sep 26, 2023 at 2:17 PM
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JPMorgan Chase (JPM) CEO Jamie Dimon's warning that the Federal Reserve may not be done hiking interest rates is dragging the bank sector lower this afternoon. Wells Fargo & Co (NYSE:WFC) and Morgan Stanley (NYSE:MS) are among the names getting hit the hardest, especially after the latter also drew a price-target cut from Oppenheimer to $100 from $105 earlier.

MS is down 1.5% at $81.83 at last check, and on track for its sixth-straight daily loss. Shares recently ran into resistance at the $90 level, and are trading back below the 180-day moving average after scoring just one close above it in more than a month.

The majority of firms covering Morgan Stanley stock lean bullish, with nine of the 15 in coverage calling it a "strong buy," while the 12-month consensus target price of $97.18 is an 18.8% premium to current levels. In simpler terms, additional price-target cuts and/or downgrades could hurt the shares even more.

Wells Fargo stock is staging an even sharper pullback, last seen down 2.4% at $40.59. A rally last week fell short of the $44 region before the security careened back down the charts again, though long-term support at the $40 region may keep any further losses in check.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WFC's 10-day put/call volume ratio of 2.52 ranks in the 97th percentile of readings from the past year. This indicates bearish bets have been growing in popularity.


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