The Zacks Analyst Blog Highlights: Facebook, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo
Zacks
For Immediate Release
Chicago, IL – May 21, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Facebook (FB), JPMorgan Chase & Co. (JPM), Bank of America Corporation (BAC), Citigroup Inc. (C), and Wells Fargo & Company (WFC).
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Here are highlights from Friday’s Analyst Blog:
Facebook a Welcome Diversion from Europe
Disconcerting headlines about Greece and the Spanish banking system have kept investors nervous in recent days, a trend that will likely remain with us for awhile. After all, the questions raised by the recent indecisive Greek elections about the country’s place in the Euro-zone can only be answered by another round of voting in the coming weeks. Till that time, Greece-related questions will likely remain the primary headwind for the markets.
But investors in the U.S. are holding a big party today to forget all about Greece and Europe, even if it’s only for a single day or a few hours. The party is for Facebook (FB), where the iconic social-networking site will get the title of "biggest tech IPO in history." The event has protagonists on both sides, with detractors questioning the market’s willingness to give the company a $100 billion-plus valuation.
It is hard to escape the feverish debate surrounding the Facebook event anywhere you look. But while the saturation coverage is becoming a little too much, I nevertheless prefer this over Greece and Europe any time.
Foreclosures Hit Record Low
In its monthly foreclosure market report, RealtyTrac stated that foreclosure activity in April 2012 fell to the lowest level since July 2007. According to this leading online marketplace of foreclosure properties, the foreclosure filings for the reported quarter dipped 5% from the prior month and 14% from the prior-year period, with a total of 188,780 properties receiving default, auction or repossession notices.
Considerable decrease in hardest hit foreclosure states, such as Arizona, Nevada and California, was the primary reason for the recent fall in overall foreclosure activity, despite a surge in majority of the states. However, the pace of foreclosure activities had not slowed down much in many of the non-judicial states; hence, there were no significant backlogs.
In the reported month, default notices issued and foreclosure auctions (depending on the state’s foreclosure procedure) declined for the first time this year to 97,665 properties. Default notices decreased 7% from March 2012 and 2% from April 2011.
Further, bank repossessions (:REO) were down 7% from the prior month and 26% from the prior-year month to 51,415 properties. REO activity dipped in 28 states from March 2012 and 37 states along with the District of Columbia posted year-over-year decline.
Another reason for the dip in overall foreclosures for the month under review is the decline in foreclosure activity in 24 states and the District of Columbia with a non-judicial foreclosure process. In these states, foreclosures declined 7% from March 2012 and 29% from April 2011. However, the 26 states that follow a judicial foreclosure process, witnessed an increase in it on the year-over-year basis. Here, foreclosure filings surged 15% from the prior-year month but fell 3% from the prior month.
Conclusion
Though foreclosures have come down in recent times, the situation will deteriorate going forward. In the coming months, foreclosure activities are bound to rise following the $25 billion settlement deal that took place between five mortgage servicers – JPMorgan Chase & Co. (JPM), Bank of America Corporation (BAC), Citigroup Inc. (C), Ally Financial Inc. and Wells Fargo & Company (WFC), 49 states’ attorneys general and the regulators. The deal is expected to speed up the pace of the foreclosure activities, which was almost frozen till now.
However, with mortgage servicers finding other options – short sale and loan modifications – to prevent foreclosure, we believe that foreclosure activity would take time to show an upward trend. When all these alternatives would be exhausted, only at that point a property would be foreclosed.
Once the foreclosure activity gains pace, there would be no looking back. Also, there will be additional pressure on the home prices as many properties would to come to the market due to the surge in foreclosure activities.
Though the huge leap in foreclosures may dampen the housing prices in the near-term, this will enable the revival of the housing market over the longer term. Moreover, we hope that there would be enough number of buyers for these properties; otherwise the housing market will have a little chance to regain a solid foothold in the market.
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