The markets were mixed-to-down this week, mostly due to confusion and uncertainty surrounding that ugly, much-overused $0.25 word: sequestration. Yes, those automatic budget cuts nobody thought would ever actually happen are actually happening. But does that explain Citigroup being down a whopping 1.97%?
The tale of the tickers
Here's a quick overview of where some of the country's biggest banks are shaking out for the week:
- Bank of America is down 0.86%.
- Wells Fargo is down a hefty 1.19%.
- Up by 0.05%, JPMorgan Chase is keeping its head just above water.
The market was up and down as well, with the S&P 500 down 0.38%, the Dow Jones Industrial Average up 0.18%, and the Nasdaq down 0.43%.
The gridlock effect
A look back through the week's news reveals no breaking stories that would account for a near two-point stock plunge.
But it's not like Wells Fargo -- an unarguably more highly regarded bank than Citi -- isn't too far behind in terms of the week's share-price performance. If Wells is down one and a quarter points, I suppose it should come as little surprise that Citi is down a good bit farther.
And the effect these crazy, misguided sequestration cuts are having on the minds of investors, consumers, and businesses themselves can't be too easily discounted. No one knows precisely how these cuts are going to play out. Fed chairman Ben Bernanke estimates the cuts could knock half a percentage point off the country's growth. Just what we need.
So, very likely, Citi is just feeling the effect of a gridlocked political system, along with the rest of us. Investors have no feeling of even mild certainty in the current economic and political climate, so you can't expect companies to somehow be booming in spite of that.
But be of good cheer, Fools. Always remember that no matter what your favorite stock is doing on a day-to-day, week-to-week, or even month-to-month basis, you're in this for the long term. Foolish investors look far down the road -- to that long, upward sloping share-price curve -- and do their best to ignore the spikes and drops that come along the way.
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The article Why Citigroup Was Hammered This Week originally appeared on Fool.com.Fool contributor John Grgurich owns shares of JPMorgan Chase. Follow John's dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich .The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase., and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a lovely disclosure policy.
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