While unemployment claims may dominate headlines today, one can’t help but wonder if or when small business loans will go into effect. Many of Wall Street’s largest banks have been asked to assist in this matter.
Wells Fargo (NYSE: WFC) has been operating under a $1.95 trillion lending cap on assets imposed by the Fed in 2018 after Wells Fargo was found to have created millions of fake accounts. This measure limits Wells Fargo’s lending ability compared to big banks such as Goldman Sachs and Bank of America, neither of which have lending caps imposed.
According to Ben Eisen of The Wall Street Journal, The Federal Reserve temporarily lifted restrictions on Wells Fargo, granting them an increased lending cap in an effort to assist small businesses which have been financially impacted as a result of the COVID-19 pandemic. This may also help to improve its setback reputation.
I see this as a positive financial catalyst in the eyes of Wall Street’s financial professionals, as for the first time in two years, Wells Fargo is able to control its finances without an imposed cap. This could be their shot at improving its tarnished reputation with both foreign and domestic businesses who may now reach out to Wells Fargo for financial assistance.
In the eyes of a seasoned trader, I love the way Wells Fargo is setting up into the final trading day of the week (markets are closed tomorrow in observance of Good Friday).
You’ll notice Wells Fargo’s 20-day simple moving average line in green on the chart above. Should Wells Fargo trade above it, I’ll consider it a support level which I can use as a possible base to make a bullish trade on Wells Fargo.
That said, there’s no predicting the future of the stock market! If markets rollover and close the week on a red note, below Wells Fargo’s 20-day simple moving average line, I’ll look to place a bearish trade on it.
Today especially, I plan on collecting all available profits by the end of the day as we head into a three day weekend, and Wells Fargo is scheduled to report earnings this coming Tuesday.
While we’re here… how about Square’s performance yesterday? The stock rose 14% while markets rose about 3%! That’s outperformance if I’ve ever heard of it! Pairing a financial professional catalyst with technical analysis in the eyes of a trader can really pay off.
Did you happen to catch a piece of the Square trade? If so, reply here and share your experience!
Yours for TrackStar trading,
America’s #1 Premarket and Day Trader
Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.