Citigroup Faces Growing Troubles: Could the Industry Be at Risk?

The most critical earnings set for investors to look over and digest this season have just come out, and those are the results of the financial sector, particularly from banking stocks. However, investors need to understand that there are two types of banks to watch over this season: commercial banks and investment banks. The former covers the business cycle, while the latter covers the consumer cycle.

Investors would be surprised to learn that shares of Citigroup Inc. (NYSE: C) are down by over 5% the day after the bank reported its latest quarterly earnings results. The reason for the stock's decline, however, has little to do with Citigroup's actual revenues and fees and more with an industry metric and regulatory speculations.

This doesn't clear Citigroup out of trouble; otherwise, bullish traders and investors would have come running to the stock once the discount became apparent enough for everyone to close the gap and bring it back to its reasonably perceived price before the selloff took place. Investors can see the bearish momentum building up further in two simple metrics for Citigroup stock as a potential warning for the rest of the industry.

Citigroup Becomes the Latest Victim of a Worsening Consumer Sector

Credit losses and delinquency rates are on the rise. This trend has been accelerating since a couple of quarters ago, showing ...

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