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Along with JP Morgan, Wells Fargo always starts off the reporting season for the big US banks, and so far 2014 has been very kind to shareholders. The bank covers a range of retirement planning and wealth management products along with both retail and corporate banking. This year, its shares have risen by 7.7%.
As with all global banks, Wells Fargo has had a number of issues to deal with since the financial crash, specifically tighter regulations over ratios covering deposits and lending. The recent announcement from the Federal Reserve granting banks a two-year extension to meet the Volcker rule standards is good news. That being said, the American Bankers Association had been lobbying on behalf of the banks for more sweeping changes to the current proposals, and will be only moderately happy with this amendment.
Following this announcement, we have seen shares in Wells Fargo stumble just as they broke through the $50 level for the first time. The last couple of weeks saw broad support just below the $48 level, much closer to the 50-day moving average. The US Bank is expecting to post Q1 earnings per share of 96 cents on the back of $20.64 billion in sales. Any weakness in the shares closer to the $48 level could be seen as a buying opportunity before the stock reverts to the upwards momentum it has enjoyed for so long.