Eyeing a trade: new high in our financial stocks, here’s why

February 16, 2024
1 min read

TLDR: One of the financial stocks in the CNBC Investing Club portfolio, Wells Fargo, hit a new 52-week high following positive updates on the termination of a consent order related to the bank’s fake accounts scandal. The Office of the Comptroller of the Currency terminated a 2016 consent order, indicating the firm’s turnaround plan is working. Although it’s too early to talk about lifting the asset cap on Wells Fargo, it’s seen as a step in the right direction. As the stock now accounts for roughly 5% of the portfolio, the Club is considering right sizing and making a small sale of shares.

In an article by Morgan Chittum, it was noted that U.S. stocks declined on Friday as investors interpreted hot inflation data. The producer price index (PCI) print came in hotter-than-expected, pushing bond yields higher. However, it doesn’t necessarily mean that the downward trend in inflation is over, as more important economic data is on the horizon with the central bank’s personal consumption expenditures (PCE) report due next week.

In other news, Wall Street made a big call on Eli Lilly stock, with Morgan Stanley bumping the healthcare name’s price target to a Street high of $950 apiece from $805 apiece. Analysts cited huge upside for sales in medicines like Mounjaro and Zepbound, and the stock climbed 3.62% after the opening to reach a new 52-week high.

Overall, the CNBC Investing Club with Jim Cramer is monitoring these developments and considering potential trades and right sizing of the portfolio based on the latest news and analysis.

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