Can Wells Fargo Bounce Back in 2021?
There is no denying that 2020 was a bad year for bank stocks in general. But it was a really bad year for Wells Fargo (NYSE: WFC), at least as far as its stock price is concerned. Wells Fargo's stock price plummeted 41.6% in 2020, which was far worse than its megabank peers. JPMorgan Chase stock was only down 5.5%, Bank of America stock was down 11.6%, and Citigroup was down 19.6%.
So, what happened to make Wells Fargo underperform, and can it bounce back in 2021?
The pandemic sank all boats in the banking industry last year. With the shutdowns, layoffs, and recession, there was less spending, fewer loans, and just a slowdown in economic activity. The performance of banks is tied to the GDP, so when growth slows, banks usually struggle. In addition, interest rates were slashed to all-time lows in the 0% range, and low interest rates translate to lower interest income from loans.
Source Fool.com
