Published On: Thu, Oct 17th, 2013

Focus on reports for this quarter sees banks’ shares slip

The current financial quarter ends today, which for many firms listed on stock markets means one thing – releasing data for the past three months. As this quarter draws to a close, anticipation of what banking firms have to tell the markets about recent performance has caused more than a little anxiety, with shares in some of the biggest in the sector in the US and UK dropping significantly.

On Friday, the Financial Select Sector SPDR Fund dropped by 0.37% at the close of trading, having dropped a little further during the day. Despite that, J. P. Morgan’s price had actually risen by 0.67%, while a marginal loss of 0.05% for Wells Fargo suggest that their rivals have a little more to worry about when their reports are released next month.

Don’t bank on it

Barclays were among the most notable fallers in both the US and UK markets. Stateside, their share price fell by close to 1%, while a 1.26% drop on the day was experienced for their London stocks. RBS were also adversely affected by the day’s trading, falling by 1.24%. Today, both banks are already in negative territory with several hours’ trading still to come.

On altogether safer ground, hasn’t seen its share price change even marginally for a number of weeks. This may suggest that for those with stocks and shares ISAs, investing in them is a safer bet than it would be to put money into ordinary high street and/or investment banks, with a possible mortgage-fuelled rise potentially on the way.

Safe as houses

YBS were recently revealed to be the high street lender offering the lowest mortgage rates. At a time when the government’s Help to Buy scheme is expected to help improve the availability of 90% and 95% mortgages, offering the lowest rates on the market may see plenty of new customers flock towards them.

Mortgages could prove vital in determining the future direction of banks and building society. Offering low mortgage rates in conjunction with Help to Buy may turn a loss or marginal profit into something far more favourable, which may see declining share prices reversed, but a lot also depends on coming financial results.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.