Wall Street Needs to Get Real About Banking and Finance Expectations for 2019

At the start of every year, 24/7 Wall St. issues its views on how the consensus price targets for major stocks in the Dow Jones industrial average and S&P 500 can influence the direction of the stock market that year. There is no secret or major insight in reminding investors and traders that the end of 2018 was extremely volatile and sloppy. It was the worst December for the Dow going all the way back to the Great Depression.

Sometimes analyst forecasting can be quite spot on. Other times, not so much. When 24/7 Wall St. evaluated the 30 Dow components based on their consensus price targets, the result was that the end of 2019, or its peak, would be a Dow 28,000.

Make no mistake: that seemed like a fairy tale target when we compiled all the data on December 31 and January 1. It feels like even more of a fairy tale now that Apple Inc. (NASDAQ: AAPL) dropped a very rare bombshell of a revenue warning for its quarterly sales.

There are many broad sectors that need to be considered for 2019. One of those is undoubtedly the financial sector. After all, throughout history it has been hard for the stock market as a whole to rise if the major banks and financials perform poorly. While this may sound gloomy, it does not assure that the finance stocks will have repeat performances of 2018 in 2019.

Another “no secret” issue is that the major financials performed quite poorly in 2018. And December was not kind there either. What may not be as well known now is that Wall Street just isn’t being fair to the public when it evaluates its own prospects for 2019.

The end result is not going to be fun for some investors. Analysts

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