US Bank Corp

US Bank Corp is an American bank holding company which I believe to be very hardly affected in the economic environment we are in right now. As I had also accurately predicted BlackRock dropping, I believe the same will be true today for US Bank for many similar reasons. One of the main ways smaller banks that mainly rely on customer spending make money is through loans as there is also a big market for it, especially in America. However, from the recent interest rate increases, the demand has been significantly decreasing for it, also cutting into the bank’s revenues. Now let’s imagine that there weren’t any increases in the interest rates and everything was exactly how it was a year ago. The two main reasons people take out loans are to buy a house or a car. But that market has also significantly died down. Houses are now more unaffordable than ever along with most cars selling for as high as two times their retail price. So even if the interest rates hadn’t increased, there would still be a lower demand for loans as people simply won’t be able to afford them. This in return has also caused a big decrease in customers’ credit scores, making them ineligible for loans even if they wanted one.

Another reason why I believe US Bank Corp will do badly this quarter is due to inflation. Generally speaking, most businesses have been negatively affected by this whether directly or indirectly. One way banks have been affected by this is their customers being forced to spend more and therefore have less in savings. And clients taking out their money from their accounts is one of the bank’s biggest nightmares.

The third reason why I believe they will disappoint investors this quarter is because of the stock market. Another main way banks make money is through investing. Seeing how bad stocks have been doing this season, it seems impossible for US Bank to have any positive returns, especially after seeing how BlackRock performed this quarter, missing the estimates by around $3B.

Lastly, none of these would make any sense if America was at the end of its recession and inflation was going down. But so far it seems to be the opposite as the economy is heading into a worse place and there are just no reasons for investors to long this company right now.

Report time: Tomorrow before the market opens

Expected movement: -3%

P/E Ratio: 9.51

Market Cap: 61,400,024,957