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2024 Forecast: U.S. Regional Banks Face Stormy Weather, Favors the Bigger Fish

Fitch, the fortune-teller of finance, peered into its crystal ball and saw storm clouds gathering over U.S. regional banks in 2024. They warned that smaller fish in this financial sea might find themselves swimming against the tide, grappling with the pressures of slashing costs and rejigging loan portfolios just to keep afloat. In their words, it’s like handing the ratings crown to the bigger players while the small fry struggle to catch a break.

Since the ancient times of March 2022 (well, ancient in financial terms), the Fed has been swinging its interest rate hammer, smashing it 525 basis points higher to combat the pesky inflation bug, now chilling at 5.25%-5.50%. But here’s the plot twist: those big regional banks hungrily eyeing commercial loans? They’re facing the ultimate buzzkill. Fitch spilled the tea, revealing that their credit demands are taking a nosedive, with some hitting double digits on the downward spiral.

And if that wasn’t enough drama for the banking soap opera, picture this: Silicon Valley Bank (SVB), the poster child of turmoil, pulled a disappearing act. It collapsed like a poorly built house of cards, courtesy of unrealized losses and a swift kick from rising interest rates. Depositors ran for the hills faster than you can say ‘bank run,’ leaving SVB high and dry, ending in its dramatic closure.

2024 seems to be brewing a pot of trouble for the regional banking sector, and it’s the survival of the fittest—the big shots might just weather this storm while the smaller ones brace for a rocky ride.

U.S. stocks higher at close of trade; Dow Jones Industrial Average up 1.43%

Cisco Systems (NASDAQ:CSCO) 11% LOWER; fell after issuing lower second quarter and full year guidance. The company sees Q2 2024 EPS of $0.82-$0.84, versus the consensus of $0.99. Cisco Systems sees Q2 2024 revenue of $12.6-12.8 billion, versus the consensus of $14.19 billion.

Palo Alto Networks (NASDAQ:PANW) 7% LOWER; fell after posting solid first quarter results but issuing second quarter and full year billing guidance below estimates. The company sees Q2 billings in the range of $2.335-$2.385 billion, below the consensus of $2.43 billion.

Juniper Networks, Inc. (NYSE:JNPR) 3% LOWER; falls on lower guidance from Cisco

Arista Networks , Inc. (NYSE:ANET) 2% LOWER; falls on lower guidance from Cisco

Zscaler (NASDAQ:ZS) 2% LOWER; falls on billing guidance miss from Palo Alto Networks

CrowdStrike Holdings, Inc. (NASDAQ:CRWD) 2% LOWER; falls on billing guidance miss from Palo Alto Networks

Fortinet , Inc. (NASDAQ:FTNT) 1% LOWER; falls on billing guidance miss from Palo Alto Networks


Hillenbrand (NYSE:HI) Boogies Up 2% in After-Hours Dance Party Post Q4 Earnings Bash!

Hillenbrand (NYSE:HI) hit the financial dance floor, flaunting a sweet EPS of $1.13—outshining the estimated $1.07. With moves as smooth as a 26% year-over-year revenue bump to $762.8 million (beating the expected $727.11 million), Hillenbrand truly stepped up its game.

The secret to this groove? Snazzy acquisitions like the Schenck Process Food and Performance Materials deal, jiving in with $43 million in revenue. Yet, the forecast for Q1/24’s EPS is a bit more laid-back, eyeing a range of $0.66-$0.71 versus the anticipated $0.81. Gazing into the future, the full-year EPS looks to tango between $3.60-$3.95—just a smidge under the anticipated $3.87.

Revenue’s also set to salsa between $3.28 billion and $3.44 billion, a nudge past the expected $3.18 billion. Despite this toned-down foresight, Hillenbrand’s Q4 groove has set investors’ feet tapping, sending spirits and stocks soaring in this fabulous after-earnings fiesta!

Smart investing is like baking a cake: you need the right ingredients, a solid recipe, and a pinch of patience. Just like a master baker meticulously measures flour and sugar, a savvy investor carefully assesses risk and potential returns. But remember, while patience is key, you can’t just stare at the oven waiting for the cake to rise. Keep an eye on your investments, adjust when needed, and voilà, you’ll have a portfolio as delectable as a perfectly baked cake!