bank failure friday returns

8/9/2019 Bank Failure Friday Returns

1/6

Richard Suttmeier is the Chief Market Strategist at www.ValuEngine.com.ValuEngine is a fundamentally-based quant research firm in Princeton, NJ. ValuEngine

covers over 5,000 stocks every day.

A variety of newsletters and portfolios containing Suttmeier's detailed research, stock picks,and commentary can be found HERE.

Jul y 12, 2010 Bank Fai lur e Friday Retu r ns

Continuing last weeks rebound for stocks depends upon earnings from Alcoa, Intel, JP Morgan,Google, Bank of America and General Electric. Getting the yield of the 10-Year back below 3%depends on auctions today through Wednesday. Will the FOMC minutes of the June 22-23meeting re-iterate the Fed concerns reflected in the Fed Statement? Evidence builds that homeprices are headed lower. The FDIC closes four banks on Bank Failure Friday.

10-Year Note Semiannual and quarterly supports are 3.479 and 3.486 with my annual pivot at 2.999,and daily, weekly, annual, quarterly and semiannual resistances at 2.935, 2.858, 2.813, 2.495 and2.249. The low yield for the move was 2.879 set on July 1st, and was a failed test of my 2.999 and2.813 annual risky levels. The US Treasury sells $34 billion in 3-Year notes today, $21 billion 10-Yearnotes on Tuesday, and $!3 billion 30-Year bonds on Wednesday.

Courtesy of Thomson / Reuters

Comex Gold Daily and quarterly supports are $1184.0 and $1140.9 with annual support at $1115.2.My weekly and semiannual pivots are $1210.3 and $1218.7 with semiannual and monthly resistancesat $1260.8 and $1279.3. The all time high of $1266.5 set on June 21stwas a test of Junesmonthly resistance, as a significant top for gold.


2/6


Nymex Crude Oil Daily and quarterly supports are $71.05 and $56.63 with weekly and annual pivotsat $76.93 and $77.05, and monthly and semiannual resistances at $79.36 and $83.94. The 200-daysimple moving average provides a resistance at $77.27.


The Euro Weekly support is 1.2422 with my monthly pivot at 1.2670, a daily resistance at 1.2773,and the 200-day simple moving average at !.3731. Monthly and quarterly supports are 1.2035 and1.1424.


3/6


Daily Dow: Daily and weekly supports are 9,719, 9,635 with the 21-day, 50-day and 200-day simplemoving averages at 10,138, 10,304 and 10,365, and my annual pivot at 10,379. MOJO is rising so thedaily chart is positive with closes above the 21-day. Semiannual and monthly resistances are 10,558and 10,891 after my annual resistance at 11,235 was tested at the April 26th high at 11,258, whichmarked the end of the bear market rally that began in March 2009. We are in the second leg of themulti-year bear market that began in October 2007 targeting 8,500 before 11,500.



4/6

Weekly Dow:The April 26th high of 11,258 was a test of the 61.8% Fibonacci Retracement of thedecline from October 2007 high to the March 2009 low. Note also the failed test of the 200-week simplemoving average now at 11,084 and the failed test of my annual resistance at 11,235. MOJO is decliningand weekly closes below the 5-week modified moving average at 10,207 keeps the weekly chart profilenegative.


Monthly Dow: now shows declining MOJO after being oversold and monthly closes below the five-month modified moving average at 10,144 keeps the monthly chart to negative. The 120-month simplemoving average is a resistance at 10,451.



5/6

Increasing Mortgage Defaults Will Result In Lower Home Prices

According to real estate analytics firm CoreLogic one in seven mortgages of a million dollars and higher

are now seriously delinquent, while one in twelve mortgages below a million bucks is delinquent. Thesestatistics will increase foreclosure sales and short sales in the second half of 2010 and beyond and willbegin a second wave down for home prices. As I have mentioned the Case-Shiller Home Price Index isroughly 50% higher than when the 20-City Index began at the end of 1999. I was recently invited tobecome a member of Robert J. Shillers panel of investment strategists, economists, and housingexperts and will begin to participate in the monthly survey of expected future home prices, and thelatest results will be published on Wednesday, July 14th. (www.macromarkets.com)

Bank Failure Friday The FDIC was back to closing banks last Friday after taking a weekend off tocelebrate Independence Day at the beginning of July. Four small community banks failed, which costthe Deposit Insurance Fund (DIF) only $159.9 million, but the year to date total cost to DIF is $17.8billion, well above the $15.33 billion prepaid bank assessments for all of 2010. I estimate that the DIF isnow in arrears by $31.9 billion.

Only 25 banks failed in 2008, as the FDIC was slow closing community and regional banks. There were 140 bank failures in 2009 with a peak of 50 in the third quarter.


6/6

In the first quarter of 2010 there were 41 failures, in the second quarter there were 45 failures,and so far 4 for the third quarter for a year to date total of 90.

At this pace bank closures in 2010 will be within my 150 to 200 estimate range for 2010.

Since the end of 2007, the FDIC has closed 255 banks on the way to my predicted 500 to800 by the end of 2012 into 2013.

Two of the four bank failures last Friday were publicly-traded and both were on my List of ProblemBanks. All for banks including Bay National Bank (BAYN) and USA Bank (USBK) had overexposuresto C&D and CRE loans with loan pipelines at 86.2% to 100% funded.

BAYN closed Friday at 30 cents a share after trading above two bucks a share on April 26th. USBK closed Friday at 20 cents a share after trading at $1.64 back on September 29, 2009.

If you want to know the 700 plus specific bank stocks that are vulnerable to failure over the next severalquarters you need to subscribe to the ValuEngine FDIC Report available at www.ValuEngine.com.

Thats todays Four in Four. Have a great day.

Richard SuttmeierChief Market Strategistwww.ValuEngine.com(800) 381-5576

As Chief Market Strategist at ValuEngine Inc, my research is published regularly on the website www.ValuEngine.com. Ihave daily, weekly, monthly, and quarterly newsletters available that track a variety of equity and other data parameters aswell as my most up-to-date analysis of world markets. My newest products include a weekly ETF newsletter as well as theValuTrader Model Portfolio newsletter. I hope that you will go to www.ValuEngine.com and review some of the sampleissues of my research.

I Hold No Positions in the Stocks I Cover.

bank failure friday returns

Documents