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Barclays share price sits at a key level ahead of US bank earnings

By: Invezz

Barclays (LON: BARC) share price has moved sideways in the past few months as investors assess the state of the banking industry. The stock was trading at 157p on Thursday ahead of the upcoming US bank earnings season. This price was a few points above June’s low of 138p.

US bank earnings ahead

Barclays and other UK banks will react to the upcoming US bank earnings season that starts on Friday. The initial banks to watch will be Wells Fargo, JPMorgan, and Citigroup, three of the biggest companies in the country.

American banks operate in a different environment compared to their British peers like NatWest and Lloyds. However, in the past, their financial results act as a barometer for what to expect among London banks.

Barclays is important in this regard because the company still has huge operations in the United States. It is also involved in investment banking, an industry that has faced numerous headwinds in the current high-interest rates environment. 

There are signs that activity in this industry is bouncing back. For example, ExxonMobil agreed to buy Pioneer Natural Resources this week in the biggest deal in the industry. Pfizer is acquiring Seagen while Cisco is buying Splunk

Data compiled by WSJ shows that Barclays is the eighth biggest players in merger advisory this year. It is handling transactions worth over $153 billion. Further, the equity market is seeing activity rise, with US deals rising by 54% this year. Barclays is also a leading player in te debt market. 

Therefore, Barclays will benefit if the investment banking business recovers. It is also benefiting with the ongoing rate hikes in the US and the UK. 

In June, the company’s results showed that its income rose to 6.3 billion pounds in Q2 and 13.5 billion pounds in the first half of the year. Its UK income rose by 14% because of higher rates. Barclays will publish its results on October 24th.

Barclays share price forecastBarclays share price

The daily chart shows that the BARC stock price has moved sideways in the past few months. It bottomed at ~140p in July and then bounced back to 157p. The current price is important since the stock has failed to flip it into support several times since June 8th. 

Barclays shares have moved slightly above the 25-day and 50-day moving averages. They are also attempting to move to the important resistance level at 160p. Therefore, more upside will be confirmed if the shares move above the year-to-date high of 163.39p. A move above that price will see it jump to the next resistance at 170p.

The post Barclays share price sits at a key level ahead of US bank earnings appeared first on Invezz.

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