This Day On The Street
Continue to site
ADVERTISEMENT
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

Obamaphobia Creating Bank Stock Bargains: Street Whispers

NEW YORK ( TheStreet) --It is no longer an arguable point that the selloff in U.S. stocks--and bank stocks in particular--is attributable to Obamaphobia in the financial services industry.

Since the close of trading on Election Day, Nov. 6, the S&P 500 is down 4.86%. Shares of Wells Fargo (WFC - Get Report), Citigroup (C - Get Report), Bank of America (BAC - Get Report), JPMorgan Chase (JPM - Get Report), Goldman Sachs (GS - Get Report) and Morgan Stanley (MS - Get Report) are down between 8.41% (Wells) and 11.53% (Morgan Stanley).

There is a large contingent of banking industry people: executives, analysts, and investors among them--who believe they are the victims of a witch hunt, and that know-nothings in government will spare no effort to extinguish every chance they might have at making a decent profit.

These people see Obama's victory as something close to a death knell for financial services industry profitability. No doubt they are especially alarmed by the fact that of the dozen or so executives who met with the President on Wednesday, only one-- American Express (AXP) chief Ken Chenault--comes from the financial services industry.

But let's not go overboard. After all, Obama chose Tim Geithner as his Treasury Secretary--a man who has defended banks' interests at every turn. Though Geithner is on his way out and Obama is under pressure to pick someone who won't kowtow to Wall Street interests, he is a long way from the radical that some would make him out to be. Geithner was Obama's pick. Whoever replaces him may have a more populist bent, if Obama decides he must defer to the populist public mood, but Obama is not, at heart, a populist, and the decisions he makes will reflect that fact.

Tom Russo, partner at money management firm Gardner, Russo & Gardner, has been puzzled by the selloff. He concedes banks may be under tighter constraints from President Obama than they would have faced if Romney had won the election. Still, he says of Obama's reelection, "I don't think its a large enough item on the margin for them to cause a sharp selloff in commercial banks."

Russo adds that banks "have a prospect for better loan growth as the result of low interest rates that come about because of a continuation of a Fed with a fairly loose policy at the moment."

1 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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.50 0.00%
C $54.08 0.00%
GS $206.19 0.00%
JPM $65.78 0.00%
MS $38.20 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs