- News and analysis
- A Huge Chance for Another Sell-Off in Banking Stocks
A Huge Chance for Another Sell-Off in Banking Stocks
I believe there is a chance for one more short selling in S&P ETFs. This time I am going to focus on hedging U.S. banking systemic risks. Media report on a possible downgrade of several large U.S. lenders by Fitch Ratings, including JPMorgan Chase (JPM). These rumours made banking stocks cheaper on august 15. An unnamed Fitch analyst warned that the agency may take a downgrade step soon regarding a dozen of giant American banks. This move could be justified after Moody's agency decided to cut the ratings of ten mid-sized U.S. banks referring to reasons like "funding risks" and "weaker profitability".
U.S. Federal regulators are also here. Martin Gruenberg, a chairman of Deposit Insurance Corporation, said that his office is ready to propose new rules for regional banks to prepare the so-called "living wills", which are detailed plans on how a particular lender would wind up its business in an emergency case of falling down. Another bit of "encouraging" news, right? Thus, SPDR S&P Regional Banking ETF (KRE) quickly plunged by 3.33% yesterday. Financial Select Sector SPDR Fund (XLF), which is using full replication techniques to repeat performance of leading banking shares on Wall Street, has been affected as well, losing 1.84% during the same trading session. JPM lost 2.55% of its market value in one day.
Looking at the charts and news, I see a huge chance for another wave of sell-off coming soon. If so, then I am selling KRE for the beginning, with a stop loss order placed 50 points above 50.00 round figure, with XLF being the next candidate for a short selling.
The comments, insights, and reviews posted in this section are solely the opinions and perspectives of authors and do not represent the views or endorsements of RHC Investments or its administrators, except if explicitly indicated. RHC Investments provides a platform for users to share their thoughts on financial market news, investing strategies, and related topics. However, we do not guarantee the accuracy, completeness, or reliability of any user-generated content.
Investment Risks and Advice:
Please be aware that all investment decisions involve risks, and the information shared on metadoro.com should not be considered as financial advice. Always conduct thorough research, seek professional advice, and exercise caution when making investment decisions.
Moderation and Monitoring:
While we strive to maintain a respectful and informative environment, we cannot endorse or verify the accuracy of all user-generated content. We reserve the right to moderate, edit, or remove any comments or posts that violate our community guidelines, infringe on intellectual property rights, or contain harmful content.
By submitting content to metadoro.com, users grant RHC Investments a non-exclusive, royalty-free license to use, display, and distribute the content. Users are responsible for ensuring they have the necessary rights to share the content they post.
To maintain a positive and respectful community, users are expected to adhere to the community guidelines of Metadoro. Any content that is misleading, offensive, or violates applicable laws and regulations will be subject to moderation or removal.
Changes to Disclaimer:
We reserve the right to update, modify, or amend this disclaimer at any time. Users are encouraged to review this disclaimer periodically to stay informed about any changes.