In Spite of Rally, Financials Not yet out of the Woods

Comments by Ben Bernanke, Fed Chairman, lifted markets, especially for those battered companies in the financial sector. In what could be called a "relief" rally, the worst 3 to 6 month performers in the sector received today the biggest lift in months.

Bernanke's comments sought for the Fed to increase its oversight ability and its power/resources in order to prevent future financial turmoil. In essence Bernanke wants to Fed to have new regulatory responsibilities and supervisory oversight of the Financial markets and Financial companies.

In light of the commentary and an almost $6 drop in Oil Futures, The Financial sector posted a board of green.
Bank Of America (BAC) up 8%
Washington Mutual (WM) up 15%
Citigroup (C) up 5%
Wachovia (WB) up 10%
Lehman Brothers (LEH) up 4.5%
Goldman Sachs (GS) up 3%
JPMorgan Chase (JPM) up 4.5%

While yesterday's rally definitely was a relief for longer term holders of these companies, the industry as a whole is by no means out of the woods. The Financials will still feel the pressure of the lingering sub-prime and mortgage troubles, and it wont be till the losses and write-downs fully subside that it will be business-as-usual for some of America's most recognized corporate names.

Disclosure: Author owns C, GS

Comments

[z28rgr8:]

I really don't see the point of either the post or the above comment. Look like "Talking Heads".. Perhaps a little "look at me" syndrome?

2008 Jul 10 08:06 AM

[morgan77:]

Totally agree Chris. Here's an article on continued bank failures and the SEC... information about past levels of failures, current "troubled bank list" and ways to analyze banks that may not be on the list but should be. interesting stuff..

www.greenfaucet.com/th...

2008 Jul 14 01:15 PM