Barclays share price is down by more than 1.72%, becoming the worst-performing banking stock in the FTSE 100. Lloyds shares are down by 1.57% while RBS and Standard Charted shares have fallen by 1.30% and 0.63%. HSBC shares are up by up by 0.30%. On the other hand, the overall FTSE 100 is down by 0.46%.
Barclays shares down ahead of US bank earnings
Barclays stock is down mostly because investors are focused on the upcoming bank earnings in the United States. While Barclays will release its share price performance later this month, it will react to earnings from the US.
That is because, among the banks mentioned above, Barclays has among the biggest trading business. And traders always look at the Fixed Income Commodities and Currencies (FICC) division. In its Q1 earnings, the division’s revenue rose by 106% to £1.86 billion.
Therefore, investors will be watching the FICC division of American banks to gauge the performance of Barclay’s. For example, in the first quarter, JP Morgan’s FICC revenue rose by 32% to $7.2 billion.
Today, we will receive earnings from Wells Fargo, Citigroup, and Wells Fargo. These will be followed by Goldman Sachs, PNC Financial and Bank of New York Mellon. Other banks that will release their earnings are Morgan Stanley and Capital One among others.
Barclays sees challenges ahead
Barclays share price is also falling because of a statement the management said yesterday. They said that they were experiencing challenges to its capital strength. The bank also warned that it was experiencing challenges in its consumer and corporate loan businesses. They said:
“reflect the challenging income and impairment conditions for the consumer and corporate businesses, and continuing strength of markets income.”
Therefore, the bank expects to report a rising in CET1 to 14% from the previous 13.1%. In the first quarter earnings, the company reported a $2.7 billion charge in April. That was the biggest provision in more than a decade.
Barclays share price analysis
Barclays stock price is trading at 117.80p. On the daily chart, this price is slightly above the 50-day exponential moving averages and slightly below the 100-day EMA. The price is also stuck along the ascending trend line that is shown in red.
Also, the volatility of the shares, as measured by the Average True Range (ATR) has fallen sharply. Therefore, the outlook for Barclays stock is neutral at this point. A move below the ascending trend line will mean that bears have prevailed. On the other hand, a move above the 100-day EMA at 120p will see the price continue to rise.