JPMorgan Chase CEO Jamie Dimon warned interest rate hikes may not be over
JPMorgan Chase (JPM) CEO Jamie Dimon’s warning that the Federal Reserve may not be done hiking interest rates is dragging the bank sector lower this afternoon. Wells Fargo & Co (NYSE:WFC) and Morgan Stanley (NYSE:MS) are among the names getting hit the hardest, especially after the latter also drew a price-target cut from Oppenheimer to $100 from $105 earlier.
MS is down 1.5% at $81.83 at last check, and on track for its sixth-straight daily loss. Shares recently ran into resistance at the $90 level, and are trading back below the 180-day moving average after scoring just one close above it in more than a month.
The majority of firms covering Morgan Stanley stock lean bullish, with nine of the 15 in coverage calling it a “strong buy,” while the 12-month consensus target price of $97.18 is an 18.8% premium to current levels. In simpler terms, additional price-target cuts and/or downgrades could hurt the shares even more.
Wells Fargo stock is staging an even sharper pullback, last seen down 2.4% at $40.59. A rally last week fell short of the $44 region before the security careened back down the charts again, though long-term support at the $40 region may keep any further losses in check.
At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WFC’s 10-day put/call volume ratio of 2.52 ranks in the 97th percentile of readings from the past year. This indicates bearish bets have been growing in popularity.