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Real Estate News Releases
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(EstateNewsWire.com, July 28, 2012 ) Boca Raton, Florida - U.S. banking sector receives a blow as stock markets go topsy-turvy with a large number of investors trying to secure their money.
Due to wild swings in global stock market, all the big financial institutions suffered a sharp dip in their earnings from investment banking in the second quarter this financial year. The Dow Jones industrial average in the US touched the low of 165 points or 1.3%. In the beginning, the Dow was trading lower at 239 points.
According to PennyStockCrowd analysis, the growing economic uncertainty in the coming years may lead to the situation where major players will let go of big deals and take less interest in releasing debts or stocks to financial institutions.
Due to this, there is every possibility that U.S. banking sector receives a blow because the picture of its revenue earnings gets glum. And adding to the woes are new regulations according to which banks cannot collect money freely from credit card and debit card fees.
The two major players Goldman Sachs and Morgan Stanley have been worse affected in the stock market because they have to rely on investment banking to generate their revenue and income. The revenue of Morgan Stanley fell by 24% and Goldman's sank 9% during the second quarter this financial year.
Goldman’s stock was down by $2.83 or 3 percent, to $91.33. Morgan Stanley, on the other hand, dipped 43 cents or 3.4% to $12.35.
Bank of America on the other hand shed 12 cents to touch $6.96.
However, the only stock which witnessed price rise was JPMorgan. JPMorgan bank stock was high 20 cents or 0.6% to $34.10.
The situation in Europe is also getting worse as many investors have been driven away.
The cost of borrowing in Spain increased once again with the fear that the government will need an international aid. Already the country borrowed funds for its banking sector to make up for the losses caused by decline in real estate business. According to the central bank, the Spanish economy fell down 0.4% in the second quarter in 2012.
The Euro touched the two years low against the US dollar. Stock markets collapsed with major German stock index falling by 3.2%, and Britain and France sinking by approximately 3%.
U.S. Banking sector receives a blow mainly when stock markets become unpredictable. It so happens because banks get a larger portion of their revenue from recommending international corporations and trading for big money players.
After analyzing how U.S. Banking sector receives a blow when global stock markets go tizzy now, PennyStockCrowd advisors feel that in such situations, penny stock investments can be a safe bet.
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