Monday, June 6, 2016
Here’s Why TheStreet Is Watching Shares of Bank of America and Wells Fargo: TheStreet
Published on 6 Jun 2016
As Federal Reserve Chair Janet Yellen prepares to speak Monday afternoon, Real Money's Fill or Kill Team will be paying close attention to bank stocks, most notably Bank of America and Wells Fargo . Bank stocks have faltered somewhat in recent years as the Federal Reserve has kept interest rates near zero. Low interest rates mean banks can only charge lower rates on their loans. Lower interest rates compress bank's net interest margin, which is the spread between the interest banks earn on their loans and the interest they pay on deposits. Last week's weak jobs data in which only 38,000 jobs were added by U.S. employers in May make a rate-hike seem less likely. For so-called money center banks such as Bank of America, any indication that the Fed will continue to keep rates near zero after its meeting next week, could be interpreted as another blow to the banks.