This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Regional Banks -- More Stress Ahead

The Volcker Rule is another potential problem for the bigger banks. The rule is a ban on speculative trading by commercial banks where customer deposits are used in an attempt to achieve trading profits in stocks, bonds, commodities and currencies. Last week, the banking regulators issued a joint release delaying the implementation of this rule until July 2014. I say that this delay is the first sign that the Volcker Rule will never be implemented.

A third issue is the exposure to Notional Amount of Derivative Contracts, which decreased by 7.4% or $18.58 trillion in the fourth quarter to a still huge $231.88 trillion on the balance sheet of the FDIC-insured financial institutions. Derivatives were a major cause of "The Great Credit Crunch" and their huge numbers keeps the banking system on shaky ground.

Notional Amount of Derivative Contracts have increased by $67.1 trillion since the end of 2007 to that $231.9 trillion figure. This is a huge read flag and will be the source of additional time bombs for the global economy. De-leveraging and financial reform is supposed to provide more transparency, but I have not seen any evidence that derivatives are under increased scrutiny.

Trading Parameters for the "Too Big To Fail" Banks:

Bank of America -- At $8.31 the stock is rated a hold according to ValuEngine with a one-year price target at $8.03. BAC traded above $10 a share on March 19 but did not close above that key level, which is a threshold for some stock mutual funds. My monthly value level is $6.24 with a weekly risky level at $9.66.

Citigroup -- At $33.60 the stock has been upgraded to buy from hold according to ValuEngine this morning with a one-year price target at $35.31. Citi traded above $38 a share on March 19. My monthly value level is $30.66 with a weekly risky level at $35.60.

JP Morgan -- At $43.79 the stock is rated a hold according to ValuEngine with a one-year price target at $45.55. JPM traded above $46 a share on March 27. My annual value level is $41.66 with a weekly risky level at $46.86.

Wells Fargo -- At $34.09 the stock is rated a buy according to ValuEngine with a one-year price target at $36.73. Wells is trying to take-out its March 19 high at $34.59 and if successful the upside is to my annual risky level at $38.69. My annual value level is $32.70 with a weekly risky level at $35.46.

I have no conflicts with any of these stocks. Newmont Mines is in my ValuTrader Model Portfolio.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.56 0.00%
C $46.28 0.00%
JPM $63.20 0.00%
RF $9.38 0.00%
WFC $49.98 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs