WFC trade ideas
Wells Fargo's 2023 Triumphs and the 2024 Cautionary Tale
Wells Fargo ( NYSE:WFC ), a stalwart in the American financial landscape, recently reported a robust performance in the fourth quarter of 2023. Despite facing challenges, the bank demonstrated resilience, with a 9% year-over-year increase in net income, reaching $3.45 billion, and an earnings per share (EPS) of $0.86, surpassing analysts' expectations. However, caution looms on the horizon as Wells Fargo projects a potential 7% to 9% decline in net interest income for 2024, sparking conversations about the bank's strategic outlook.
Fourth Quarter Triumphs:
Wells Fargo's fourth-quarter achievements were notable, with a 2% rise in revenue to $20.48 billion, slightly exceeding analyst predictions. The bank managed a 5% drop in net interest income, aligning with their guidance, attributed to reduced deposit and loan balances, partially offset by higher interest rates. Notably, noninterest income saw a remarkable 17% increase, showcasing the diversification of revenue streams. Meanwhile, noninterest expenses decreased by 2%, demonstrating the bank's commitment to operational efficiency.
Fiscal Year 2023 Performance:
The fiscal year 2023 proved to be a banner year for Wells Fargo, with a 16.5% year-over-year growth in net interest income, surpassing their guidance of 16% higher than the previous year. The net interest income for 2023 totaled $52.4 billion, outperforming the prior year's $45.0 billion. Looking ahead, Wells Fargo anticipates a slight decline in average loans, coupled with modest growth in commercial and credit card loans for the upcoming year, suggesting a carefully calibrated approach to balance risk and reward.
Stock Performance Analysis:
NYSE:WFC 's stock performance reflects the intricate dance between triumphs and challenges. Total revenue for the past year stood at $77.83 billion, reflecting an 8.89% decrease compared to the previous year. The third quarter witnessed a decline of 11.21% in total revenue since the previous quarter, highlighting a dynamic market landscape. Net income for the past year declined by 38.82%, signaling hurdles faced by the bank, but a 16.79% increase in the third quarter to $5.77 billion suggests signs of recovery. The EPS for the past year decreased by 36.4%, yet the third quarter saw an 18.38% increase to $1.48.
Strategic Caution for 2024:
The cautionary outlook for 2024 stems from Wells Fargo's projected 7% to 9% decline in net interest income. This projection raises questions about the bank's response to evolving market conditions, potential shifts in interest rates, and their strategy to navigate the challenges. Investors and analysts will keenly observe Wells Fargo's strategic decisions in the coming year, assessing their ability to adapt to market dynamics while sustaining growth.
Conclusion:
Wells Fargo's ( NYSE:WFC ) journey through the highs and lows of 2023 paints a nuanced picture of a financial giant navigating turbulent waters. The fourth quarter triumphs showcase the bank's resilience and adaptability, while the cautionary outlook for 2024 underscores the challenges ahead. As the bank steers through 2024, the eyes of the financial world remain firmly fixed on Wells Fargo ( NYSE:WFC ), a symbol of endurance and strategic acumen.
$WFC support and resistanceKISS here with resistance being breached for a fbo return. Expecting move down to $41 area. Stop above last swing high.
Wells Fargo's Earnings Report and the Path Forward
Wells Fargo, one of the largest banks in the United States, recently faced a dip in its stock prices following the release of its fourth-quarter earnings report. Investors were particularly concerned about the higher provision for credit losses, which stood at $1.28 billion, up from $957 million in the same period last year. We will delve into the key factors that influenced Wells Fargo's performance, analyze its financial metrics, and explore the strategic moves the bank is making to steer through the challenging waters.
1. Provision for Credit Losses: A Closer Look
The noticeable increase in Wells Fargo's provision for credit losses has undoubtedly raised eyebrows among investors. What led to this surge? The report points to higher allowances for credit losses on credit cards and commercial real estate loans. Unpacking these specific areas could provide valuable insights into the bank's risk management practices and exposure in these markets.
2. Earnings in Line, Revenue Beats Expectations
Despite the concern over credit losses, Wells Fargo managed to post earnings of 86 cents per share, aligning with Wall Street estimates. The revenue figure of $20.49 billion surpassed expectations, showing the bank's ability to generate income amid challenging conditions. Examining the diverse revenue streams contributing to this success will help investors understand the resilience of Wells Fargo's business model.
3. Net Interest Income and the Rate Hike Impact
The net interest income of $12.77 billion narrowly edged past Wall Street predictions. This achievement can be attributed to the Federal Reserve's series of interest rate hikes since 2022. A deeper exploration of how Wells Fargo strategically positioned itself to capitalize on these rate hikes and the impact on its interest-earning assets, such as loans and mortgages, will shed light on the bank's financial acumen.
4. CEO's Confidence and Forward-Looking Statements
Wells Fargo's Chief Executive, Charlie Scharf, expressed confidence in the bank's performance moving forward. Analyzing Scharf's statements and the actions outlined in response to the current challenges will provide investors with a clearer understanding of the bank's strategic initiatives. How does Wells Fargo plan to mitigate risks, enhance returns, and navigate the intricacies of an evolving economic landscape?
5. Market Reaction and Future Outlook
The 1.7% drop in Wells Fargo's stock in premarket trading suggests a cautious market sentiment. As we assess the broader market dynamics, including macroeconomic trends and industry-specific factors, we can better gauge the potential impact on Wells Fargo's future performance. Are there external factors contributing to the market's response, and how might they shape the bank's trajectory in the coming months?
Conclusion:
Wells Fargo's recent earnings report reflects a complex interplay of factors influencing the banking giant's performance. While challenges, particularly in credit losses, have caught the attention of investors, the bank's ability to meet earnings expectations and exceed revenue forecasts demonstrates resilience. As Wells Fargo navigates through uncertain economic waters, the strategic decisions made by its leadership will be crucial in determining its future trajectory.
WFC - Basic Technical AnalysisOn the monthly chart for WFC, the upper trend line has been respected multiple times(including Jan and Feb 2022) so far. Look at the red trendline(Marked 12/18/2023 Monthly Trendline) and the Fib 61.8 rejection(perfect to the cent) in December 2023. Look at the orange colored trendline(12/18/2023 Monthly Trendline) that has been respected since Dec 2020.
On a weekly basis, rejected the Marked 12/18/2023 Monthly Trendline, Fib 61.8 rejection, upper Bollinger band, strong support at 47.04, double top. However, there is divergence between RSI and price action, where, RSI is going up, while price is heading down. VIX is also very low. Dollar down.
Earnings on 1/12/2024.
WFC Week of Jan 8Another request.
This one looks pretty bullish, HA candles and setup signal a continuation to the upside.
Look for a hold of the bullish condition and a move to the high targets on this one here.
Banking sector is pretty strong right now.
Be weary though, if next week turns out to be bearish in the banking area, we have a confirmed bearish reversal / top on HA:
We have formulated the ascending wicks. Next week, closing below the ascending wicks will signal a confirmed top (well as confirmed as Technical analysis can be haha). It will need to push a bit higher than these wicks to invalidate the topping setup.
But in terms of short term patterns, there should be some, at least short term, continuation to the upside.
WFC : Booked a profit of 11.26% on the invested capitalTechnically the price is in a range which may act as an inflection point where the sellers may come in. So decided to book profit and take some chips off the table. Will look for a re-entry opportunity, if price falls back to the low of the channel line.
$WFC going north?It has been consolidating between 40 and 48 for many months now. This weekly chart has it coming up again on its 48 price point and if it can bypass it then it will go much higher.
WFC 1hr support trends with 50SMAWFC
1hr support trendlines with 50SMA
Uptrend confirmed by latest trendline support
WFC Wells Fargo & Company Options Ahead of EarningsIf you haven`t bought the dip on WFC:
Then analyzing the options chain and the chart patterns of WFC Wells Fargo & Company prior to the earnings report this week,
I would consider purchasing the 42.50usd strike price Calls with
an expiration date of 2024-3-15,
for a premium of approximately $1.87.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
Earnings Journal█ SIMPLISTIC ANALYSIS </
Current Market Trend: short/sellers/negative.
Next Wave: buy wave to the mean.
Next Swing: negative swing to support.
Trade Type: Touch & Go don't wait for a close.
█ EARNINGS AT A GLANCE </
Release Date: 10/13 BMO
Earnings Anticipations: positive surprise for EPS & Revenues.
Surprise-Confidence: on a scale of 0-5, #3
EPS & Revenue 2-Year Trend: the trend in EPS is neutral, the trend in Revenues is neutral.
█ SYNOPSIS </
"I expect the market will buy the surprise if the earnings report hits the Wall Street consensus, or sell the surprise if the earnings report misses the Wall Street consensus."
█ RESEARCH DEPTH: </
Technical Analysis: daily chart.
Fundamental Analysis: EPS & Revenue data.
Press/News: none.
Social Media: none.
WFC - SHORT TERM DECLINEWells Fargo is planning to lay off over 500 employees in Richland County, South Carolina, by June 30, 2024. The layoffs have already started, with the highest number of job cuts in the state listed at their location on 101 Greystone Blvd. These layoffs are part of a consolidation process affecting behind-the-scenes employees, with bank tellers and customer service representatives unaffected. This move reflects a broader trend in the banking industry, where institutions are downsizing to adapt to changing market dynamics and technology advancements.
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WFC LongI am long to Wells Fargo there is huge potential that this stock will bounce up in my opinion
Wells Fargo Priced in SilverPhase 1
Wells Fargo (priced in #silver) is setup for a move DOWNWARDS, towards that PARADIGM shift breakdown line.
Phase 2
But that only leads up to MUCH bigger move, AFTER it breaks down below that line.
Bull ERA for #gold, #silver, #uranium, and #crudeoil when this happens.
WFCLong here off trendline support and horizontal support.
Stop loss 41.80
1st target
43.70 gap close
Last target
45.00 gap close
WFC setting up a VWAP bounce LONGOn this 4H chart, I see WFC having had a bit trend up and then a retractment through the
upper anchored VWAP lines toward the mean running VWAP where I expect a bounce.
At present, price action is in a bit of a flat bottom triangle. The ZL MACD supports this
impending reversal with bullish divergence in the line cross under a histogram which
went red to green. I will take a long trade here with a stop loss under the histogram
and a target just below the pivot high in mid July. I will zoom onto a 30 minute time
frame to better select an optimal entry on the reversal. I will check banks in general
including the ETFs KRE KBE BNKU and DPST.
$WFC with a bearish outlook following its earnings #StocksThe PEAD projected a bearish outlook for NYSE:WFC after a positive over reaction following its earnings release placing the stock in drift B with an expected accuracy of 60%.
Wells Fargo about to pivot hard imoThis one looks overdone...If I am correct about the DXY and 10 yr yield pivoting then this should be a catalyst for the banks to pull back hard.
4,000 Banks Remain Below March Crisis Level Out of the approximately 4,000 banks in the United States, it seems like JP Morgan is the only bank from this top 4 banks we are seeing here that has climbed back up from the March banking crisis. The rest are still well below their March levels. What about the other thousands of banks?
Is inflation fear over?
We observed an improvement in the CPI numbers, which reached 3% recently. However, the PCE number is what the Fed is concerned with, as it is still hovering around its high point.
The banking crisis in March was triggered by rising interest rates, and the long term yield or interest rate trend suggesting more upside to come.
How can you determine if the fear of inflation still lingers and is leading to further interest rate hikes? One indicator is an inverted yield curve, where the shorter-term or 2-year yield is higher than that of the 30-year government bonds. Take a look at the following chart.
The upper window represents the cash market, which is not tradeable. The lower window represents the futures market, where we can use it to hedge and trade.
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
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WELLS FARGO: Important bullish breakout.Wells Fargo crossed on Friday over the HH trendline that was in effect since April 19th, invalidating it as a Resistance and instead giving form to a Channel Up pattern that is supported by the 1D MA50. The 1D technicals are bullish (RSI = 69.130, MACD = 0.870, ADX = 27.314) and even though the nearly overbought RSI will required a technical pullback in order to harmonize it, on the long term this Channel Up should test the R1, so we are bullish (TP = 48.85).
If the price crosses under the S1 (42.10), we will sell and target the S2 (TP = 40.35), where the HL trendline should also support on the long term.
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Wells Fargo & Company (WFC) Shares in Wells Fargo & Company (symbol ‘WFC’) incurred losses in the second quarter of the year and is currently down around 9% compared to the 1st of March. The company is expected to report earnings for the quarter ending June 2023, on Friday 14th of July before markets open. The consensus EPS is $1,16 compared to $0,74 in the same quarter last year.
Antreas Themistokleous at Exness: “ Wells Fargo & Co. closed $6.52 short of its 52-week high ($48.84), which the company reached on February 14th after 3 consecutive days of losses. The company's shares slipped by around 1% on Monday where the SPX was up around 0.24% and DJIA +0.62%. New allegations from its staff about racial bias comes to add to a troubling history of scandals for the bank. On the financial side with a balance sheet of $1.88 trillion in assets and $1.7 trillion in liabilities as of 31/12/2022 the company seems to be holding above water for now.”
On the technical analysis side the price is trading just above a major technical support level of the 20 day moving average and the 50% of the weekly Fibonacci retracement level. The next major support area seems to be around the $40 area which consists of the psychological support of the round number, the lower band of the Bollinger bands as well as the 50 & 100 day moving averages.
The MACD oscillator shows that the MACD line is on the move to cross below its signal line, possibly pointing to bearish sentiment building up with the potential targets in the areas of support mentioned above. Although this does not mean that the crossover will inevitably happen so no single indicator is capable of giving out reliable “signals”.
WFC Wells Fargo & Company Options Ahead of EarningsIf you haven`t sold WFC here:
or bought it here:
Then Analyzing the options chain of WFC Wells Fargo & Company prior to the earnings report this week,
I would consider purchasing the 42.5usd strike price Puts with
an expiration date of 2023-8-18,
for a premium of approximately $1.42.
If these options prove to be profitable prior to the earnings release, I would sell at least half of them.
Looking forward to read your opinion about it.
