By Gareth Soloway on October 15th, 2010 12:05pm Eastern Time
The stocks of JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC) and Wells Fargo & Company (NYSE:WFC) were all crushed for the second straight day today as fear over the continuing foreclosure crisis swelled. Further regulation has not helped either as new rules are taking hold. The foreclosures in the United States are not even close to being over and many of these companies have halted foreclosures to look into allegations over methods used. Foreclosures must be cleared off the books. Any delay will just prolong the problems and cause more losses. In this Chief Market Strategists opinion, housing prices will drop another 20% before all is said and done. This may come as a shock to many, but with over 100,000 foreclosures last month alone, there is far too much inventory out there to not drive prices lower. Any delays in this process, will only prolong the bottom and the following move higher.
JPMorgan Chase reported earnings just a few days ago. Initially the markets cheered the numbers with a small gap higher. After looking closer, the market saw the truth behind the numbers and the selling began. One Wednesday, JPM opened after earnings higher at $40.66. Today, the stock hit a low of $36.54, a ten percent drop in just three trading days. Bank of America and Wells Fargo took the same hits.
In the very short term, these stocks look like they are due for a bounce. However, it is very possible they have much more downside to go before this issue is resolved. To get more analysis, guidance, swing trades and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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