These Too Big To Fail Banks Are In Rebound Mode

The biggest banks in the U.S. are the four money center banks considered too big to fail. Bank of America
BAC
, Citigroup
C
, JPMorgan Chase
JPM
and Wells Fargo
WFC
have been increasing their reserves for losses as loan defaults rise.

Here is the Chart for Total U.S. Household Debt

Total household debt declined by $34 billion in the second quarter of 2020. This was the first slippage since the second quarter of 2014. The main reason for this decline is that credit card balances fell by $76 billion. This was caused by a sharp slowdown in consumer spending due to the Covid-19 pandemic.

In this environment the too big to fail money center banks have been in recovery mode.

Here is the Scorecard for the Four ‘Too Big to Fail’ Money Center Banks

Bank of America ($26.66) has a positive weekly chart with its 200-week simple moving average or reversion to the mean at $27.30. BAC is the only one of the big banks that is above its quarterly pivot, now at $25.99. Its semiannual and annual risky levels are $40.16 and $40.80.

Citigroup ($52.93) has a neutral weekly chart with its 200-week simple moving average at $65.05. Citi is below its quarterly pivot at $55.16 with its semiannual and annual risky levels of $84.68 and $94.40.

JPMorgan ($101.12) has a neutral weekly chart with its 200-week simple moving average at $104.14. JPM is below its quarterly pivot at $108.85. Its semiannual and annual risky levels are $143.59 and $144.69.

Wells Fargo ($24.54) has a negative weekly chart with its 200-week simple moving average at $49.66. WFC is below its quarterly pivot at $28.65 with semiannual and annual risky levels of $47.12 and $74.35.