Wells Fargo shares close lower on Friday, bank plans first mortgage bond offering after financial crisis, Bloomberg reports

October 6, 2018 11:13 am

According to a report by Bloomberg, citing sources with knowledge of the matter, Wells Fargo & Company (WFC) is planning its first post-crisis bond offering linked to home loans in the United States without government backing.

Wells Fargo shares closed lower for the ninth time in the past eleven trading sessions in New York on Friday. It has also been the steepest daily loss since September 27th. The stock went down 0.60% ($0.32) to $53.19, after touching an intraday high at $53.86, or a price level not seen since September 26th ($54.45).

Shares of Wells Fargo & Company have retreated 12.33% so far in 2018 compared with a 7.93% gain for the underlying index, S&P 500 (SPX).

In 2017, Wells Fargo’s stock surged 10.09%, thus, it again underperformed the S&P 500, which registered a 19.42% return.

Valued at $441 million, the non-agency bond is to include top portions with AAA rating.

According to the report, the sale is to be completed during the upcoming week.

“The next-generation of private-label RMBS credit generally has been hard to source, given the sparse participation by originators and banks,” Neil Aggarwal, senior portfolio manager and head of trading at Semper Capital, was quoted as saying by Bloomberg.

“Wells Fargo entering the market will likely be welcomed by investors as it is another potential source for this type of paper,” Aggarwal added.

According to CNN Money, the 29 analysts, offering 12-month forecasts regarding Wells Fargo’s stock price, have a median target of $63.00 with a high estimate of $71.00 and a low estimate of $50.00. The median estimate represents an 18.44% upside compared to the closing price of $53.19 on October 5th.

The same media also reported that 14 out of 33 surveyed investment analysts had rated Wells Fargo’s stock as “Buy”, while 12 – as “Hold”. On the other hand, 4 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, Monday’s levels of importance for the Wells Fargo stock are presented as follows:

R1 – $53.27
R2 – $53.35
R3 (Range Resistance – Sell) – $53.43
R4 (Long Breakout) – $53.67
R5 (Breakout Target 1) – $53.96
R6 (Breakout Target 2) – $54.07

S1 – $53.11
S2 – $53.03
S3 (Range Support – Buy) – $52.95
S4 (Short Breakout) – $52.71
S5 (Breakout Target 1) – $52.42
S6 (Breakout Target 2) – $52.31

By using the traditional method of calculation, the weekly levels of importance for Wells Fargo & Company (WFC) are presented as follows:

Central Pivot Point – $52.98
R1 – $54.07
R2 – $54.96
R3 – $56.05
R4 – $57.15

S1 – $52.09
S2 – $51.00
S3 – $50.11
S4 – $49.23

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