Trading Citigroup's Disappointing Earnings (C, JPM, BAC, WFC)

Citigroup C failed to dazzle this morning with disappointing fourth quarter earnings. Citigroup reported EPS of $0.04, much lower than $0.07 Street estimates. Earnings were on the low end of the expectations, which were in the analyst survey range of $0.04 to $0.08. In the previous quarter, Citigroup's earnings increased by 10%. In pre-market trading, Citigroup was at $5.19 before the news. Following the initial announcement of EPS of $0.04, it was trading at $4.96, down from Friday's close of $5.13. After the adjustment to $0.07, pre-market trading continued to slide downward. The announcement was a big disappointment to investors as the downward fall continues.Although some would claim that the market is overreacting to the news; perhaps it will, indeed, have profoundly negative effects on the future of Citigroup. With news that JP Morgan JPM exceeded its earnings expectations, the pressure was on Citigroup to report similar results. Failing to do so caused negative pressure on the stock, which may continue in the coming days and weeks. Should investors see this as a buying opportunity or a chance to jump ship? Investors who believe this is a market overreaction or simply a minor setback for Citigroup may consider taking a long position in Citigroup stock, or buy call options. Those who have a more pessimistic outlook regarding Citigroup's future may consider shorting the stock, buying put options, or simply investing in competitors like JP Morgan JPM, Bank of America BAC, or Wells Fargo WFC. It would appear that Citigroup's disappointing earnings are negatively affecting the price of these companies as well; each one is down in pre-market trading today. Disclosures: long C Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that your own due diligence and consult a certified financial professional for personalized advice about your financial situation.