CNBC Daily Open: In the eye of the storm
https://www.investorsobserver.com/symbols/zion
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Markets made fractional moves Monday as banking turmoil, inflation worries and debt ceiling fears persist.
What you need to know today
- Warren Buffett has a warning about the U.S. economy: Consumers are no longer splurging, causing an inventory build-up in the companies that Berkshire Hathaway owns. Hence, Buffett expects his businesses to report lower earnings this year than the last.
- Still, Berkshire’s doing well so far: Its first-quarter earnings jumped 12.6% to $8.065 billion. Geico, an auto insurance company that CEO Buffett called his “favorite child,” managed to post a profit for the quarter ended March 31 after suffering a $1.9 billion pretax loss last year.
- All three major stock index in the U.S. made fractional moves Monday. Asia-Pacific markets traded mixed Tuesday. China’s Shanghai Composite rose 0.4% after it hit its highest point in 10 months yesterday.
- China’s April exports grew 8.5% in U.S. dollar terms, more than the 8% forecast. However, the country’s imports fell 7.9% year on year — economists had expected import volume to remain unchanged from March.
- PRO As we approach June 1 — the date when the U.S. government potentially runs out of money to pay its debts — Citigroup analysts think investors should be wary of companies that earn high revenue from the U.S. government.
The bottom line
Monday’s market moves were lukewarm: The Dow Jones Industrial Average inched up 0.17%, the Nasdaq Composite slipped 0.17% and the S&P 500 was little changed. But that’s because the mood was one of anxiety, rather than calm.
Regional banks managed to avoid losses amid renewed fears of banking instability. PacWest Bancorp rose 3.65%, Western Alliance Bancorp eked out a 0.6% gain and Zions Bancorp added 2.1%. Those are reassuring, if not astounding, numbers.
But those numbers have to be put in context. Earlier in the day, PacWest surged nearly 30% after the regional bank announced Friday evening that it was planning to raise capital. So the story on Monday isn’t so much of confidence in regional banks, but continued volatility. Indeed, the SPDR S&P Regional Banking ETF (KRE) fell by 2%.
Banking fears brought about by high interest rates, then, still persist. The Federal Reserve’s most recent Financial Stability Report, published Monday, confirmed that one of respondents’ biggest economic fears is “banking-sector stress.” Additionally, the report identified money market funds, stable coins and hedge funds as having higher potential for running into trouble.
Other concerns about the economy, the report said, included “persistent inflation and tighter monetary policy.” April’s consumer price index report, expected Wednesday, and the producer price index on Thursday will either reinforce or dispel some of those fears.
And then there’s the specter of the U.S. defaulting on its debt. In the event that Congress doesn’t reach an agreement to raise the ceiling, there would be an “economic catastrophe,” U.S. Treasury Secretary Janet Yellen told CNBC Monday. We’ll soon find out whether Washington can avert the “financial chaos,” in Yellen’s words — President Joe Biden meets top lawmakers Tuesday to discuss the issue.
Despite markets’ “tepid approach on Monday,” then, “a look beneath the surface reveals a bit more agitation than that first glance might reveal,” as the Goldman Sachs trading desk puts it. We might just be in the eye of a storm."
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Should You Accumulate Zions Bancorporation NA (ZION) Stock Monday Morning?
ZION stock closed at $23.76 and is up $0.89 during pre-market trading. Pre-market tends to be more volatile due to significantly lower volume as most investors only trade between standard trading hours. ZION has a poor overall score of 23 meaning the stock holds a better value than just 23% of stocks at its current price. InvestorsObserver's overall ranking system is a comprehensive evaluation and considers both technical and fundamental factors when evaluating a stock. The overall score is a great starting point for investors that are beginning to evaluate a stock. ZION gets a average Short-Term Technical score of 60 from InvestorsObserver's proprietary ranking system. This means that the stock's trading pattern over the last month have been neutral. Zions Bancorporation NA currently has the 130th highest Short-Term Technical score in the Banks - Regional industry. The Short-Term Technical score evaluates a stock's trading pattern over the past month and is most useful to short-term stock and option traders.
Zions Bancorporation NA's Overall and Short-Term Technical score paint a mixed picture for ZION's recent trading patterns and forecasted price. Click Here To Get The Full Report on Zions Bancorporation NA (ZION)
ZION Stock Analysis Overview
What this means: Zions Bancorp (ZION) gets a very poor rank from InvestorsObserver.
Our comprehensive analysis of fundamental and technical factors gives ZION a rank of 24. Our methodology considers analysis of the company's financial situation and how it has traded recently. ZION rank of 24 means that it ranks below 76% of stocks.
Who this matters to: Overall Ranking is a comprehensive evaluation. It considers technical and fundamental factors and is a good starting point for evaluating a stock.
Zions Bancorp (ZION) Company Description
Zions Bancorp NA is a regional U.S. bank with core operations that span 11 states. The bank is headquartered in Salt Lake City and does business primarily in the Western and Southwestern United States. Zions primarily focuses on providing banking services to small and midsize businesses, with the majority of its loans focused on commercial and commercial real estate lending.Zions Bancorp (ZION) Stock Chart
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Source: https://www.investorsobserver.com/symbols/zion
Why bank stocks are so unstable
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.
The financial sector has been churning in rough water since the shocking collapse of Silicon Valley Bank in March.
Now, it appears that two factions on Wall Street, fear-motivated short-sellers and value-based fundamental investors, are locked in a volatile battle over where the sector’s stock prices should settle.
A look back: Last week was rough on US regional banks — shares of mid-sized lenders got crushed as the sale of First Republic Bank (FRC) and other news triggered fears that the crisis in the sector was far from over.
PacWes (PACW)t shares lost half their value on Thursday after the California-based lender said it was exploring all strategic options (that means “looking for help” in Wall Street speak). Shares of Arizona’s Western Alliance (WAL) finished down 39% even after the company denounced a Financial Times report claiming it was considering a sale. Utah’s Zions (ZION) and Texas’ Comerica (CMA) also toppled more 12%.
But a sudden rebound jerked stocks higher on Friday; PacWest skyrocketed a staggering 82%. The momentum lasted through the weekend before petering out again on Tuesday – PacWest was down 7% in morning trading and Zions fell more than 1.5%.
They’re definitely on a roller-coaster ride.
So what’s happening?. .
The Federal Reserve’s quarterly Senior Loan Officer Opinion Survey (SLOOS), released Monday, confirmed that lenders are stiffening their standards in the wake of the banking collapses.
Survey respondents attributed the changes in lending standards to economic uncertainty, a reduced appetite for risk, deterioration in collateral values and broader concerns about banks’ funding costs and liquidity positions, according to the Fed report.
More bad news: Lenders reported that they expect to tighten standards across all loan categories for the remainder of this year, citing the above concerns as well as customer withdrawals.
“The primary economic implications of the Fed’s lending survey are that cost of capital is increasing which in turn will damp investment, hiring and growth that underscore the current economic expansion,” wrote Joe Brusuelas, chief economic at RSM US in a note. “If lending conditions continue to tighten along the lines implied by this survey the economy would do well to generate barely sub one percent growth in the second half of the year.”."
Read more > https://www.cnn.com/2023/05/09/investing/premarket-stocks-trading/index.html
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