German mega-bank Deutsche is the latest stock to come under fire from fearful traders. These are the levels to watch for the stock in the coming week.
DBK – Weekly Chart
Deutsche rallied on Friday, but the weekly trend was still lower, and the stock has a target of $7 on the downside for the US ADR stock.
The German bank recently outperformed analyst expectations with a 26% improvement in its revenue targets.
The Swiss government may have made the situation harder for Deutsche Bank. The $19bn wipeout of AT1 bondholders will have investors concerned about the sector. The European Central Bank criticised the Swiss efforts, but investors may feel safer outside the banking sector.
Growing Concerns Over Recent Turmoil In Banking Sector
Investors are also concerned by the US efforts after Janet Yellen, Treasury Secretary, appeared to change her mind on deposits. Yellen had said the US would stand behind all deposits but changed her story a day later. The White House is also said to be troubled by the inability to soothe markets.
“Just as hopes had risen that contagion would be contained, banking stocks in Europe have been battered again by fears that fresh problems could be lurking,” Susannah Streeter of Hargreaves Lansdown told the Guardian.
“Waves of bad news keep hitting the banking sector and the tide doesn’t look like it’s set to turn any time soon,” she said.
Bill Winters, CEO of Standard Chartered bank, said on Friday that the decision to wipe out $17bn of Credit Suisse debt in the rescue deal would have “profound” implications for global banking regulation.
