Wells Fargo & Co WFC shares dropped 7.5% to $65.63 during Monday’s session, as concerns about a potential recession and rising U.S.-China trade tensions weighed heavily on financial stocks. The broader market’s decline, with all major indices in the red, has added further pressure on Wells Fargo, one of the largest banks in the U.S.
What To Know: The decline follows remarks by President Donald Trump, who seemed to acknowledge the possibility of a U.S. recession in a Sunday interview with Fox News.
As a major player in retail banking, commercial lending and wealth management, Wells Fargo is vulnerable to macroeconomic shifts. A potential slowdown in consumer spending and lending activity could have an adverse impact on its financial performance.
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Additionally, rising Treasury yields, hovering around 4.23% for the 10-year Monday afternoon, may affect credit demand and borrowing costs, creating challenges for the bank moving forward.
What Else: Treasury yields are a key indicator of the overall cost of borrowing in the economy, and they directly influence the interest rates that banks charge on loans.
When Treasury yields rise, it generally leads to higher borrowing costs across the board, including for mortgages, auto loans and business loans—products that Wells Fargo heavily depends on for revenue generation.
Higher yields also tend to make bonds more attractive relative to equities, which can shift investor focus away from bank stocks and other riskier assets.
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How To Buy WFC Stock
By now you're likely curious about how to participate in the market for Wells Fargo – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.
In the case of Wells Fargo, which is trading at $65.63 as of publishing time, $100 would buy you 1.5 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, WFC has a 52-week high of $81.50 and a 52-week low of $50.15.
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