Pull up the WFC chart and you’ll see a financial stock that is not in trouble. Despite all the hype that financials (primarily the banks) have gotten excessively oversold and are tremendous bargains - I just don’t see it. I know it’s important for the bulls to lift up the financial sector. After all, it is the biggest percentage contributor to the S&P 500 index and many fundamentalists and market historians will tell you how important it is that the financial sector lead and participate in stock market moves. But back to WFC - the stock has appreciated 15% over the past two weeks and it is trading at record highs. You can thank Ben and Warren for that.  So much for the concept that all financials have been unfairly punished because of subprime. WFC is not alone. Just look at a sample of stocks that have had huge moves (about 20% on average) in the past two weeks:

ALAB, AMFI, ASBC, BFIN, BKMU, BOH, BPFH, CATY, CBH, CBU, CFFN, CFR, CHCO

CHFC, CINF, CMTY, CNB, CSBK, CTBK, CYN, DCOM, FBC, FCBP, FCF, FED, FFBC

FFCH, FFIN, FFIC, FFG, FMER, FNB, HOMB, LBAI, MTB, NBTB, NPBC, OMEF, OSBC

ONB, PEBO, PFS, SASR, SBIB, SBNY, SFNC, STBA, SUBK, TCBI, TMP, UBSI

WCBO, WFSL, WSBC, WSFS, WTFC

Do you feel sorry for the financials now? I don’t. Certainly a few pure mortgage plays have suffered but with all the Fed intervention, many financials have benefited greatly and are actually higher than July 19th. Personally, I look at all this and start to wonder whether these companies are better now than they were 2 or 3 months ago. I agree that many of them were oversold and the Fed intervention and short covering have certainly pushed their stock prices higher. However, it’s important to take a look at the fundamentals and ask whether their business prospects are better now than they were a few months ago. I guess if you are in the camp that believes the economy is great and there is no chance of a recession you might like their valuations. If that is the case, then what was all that Fed intervention about?