What's Going On With Wells Fargo (WFC) Shares

Wells Fargo & Co WFC shares are up 13% to $73 since the beginning of November. The stock has seen marked strength following Donald Trump's presidential election win, as investors anticipate that his administration's economic policies could create a favorable climate for major banks.

Trump’s tax agenda, which includes potential expansions to the 2017 Tax Cuts and Jobs Act, could lower corporate tax rates further, directly boosting Wells Fargo's earnings.

Given Wells Fargo's large domestic footprint, the bank stands to benefit substantially from reduced tax burdens, which would improve net income and possibly free up additional funds for shareholder returns through dividends or buybacks.

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What To Know: Trump's stance on regulatory reform is another factor likely driving optimism for Wells Fargo. Under his previous administration, Trump aimed to ease financial industry regulations, including parts of the Dodd-Frank Act, which could lead to a similar approach this time. This deregulation could be advantageous for Wells Fargo as it looks to recover from recent operational and compliance challenges.

Eased oversight and reduced compliance costs would allow Wells Fargo to focus on core banking activities like consumer lending, small business support and expanding its mortgage portfolio, without the same intensity of regulatory constraints that have limited its growth in recent years.

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What Else: In addition, Trump's economic policies may create inflationary pressures, especially with proposed spending increases and high tariffs on imported goods. This could prompt the Federal Reserve to keep interest rates elevated, an outcome that would positively impact Wells Fargo's profitability.

As a bank with a large base of consumer and business loans, Wells Fargo benefits from higher net interest margins when rates are elevated, as it can charge more for lending while controlling deposit costs.

Overall, the combination of potential tax savings, regulatory relief and a higher-rate environment under Trump's policies creates an optimistic outlook for Wells Fargo.

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How To Buy WFC Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Wells Fargo’s case, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.