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Will FNMA Stocks Soar? An In-Depth Look

Bryce TuoheyAvatar
Written by Bryce Tuohey
Reviewed by Matt Monaco Fact-checked by Bryce Tuohey

Concerns over operational challenges and wider market pressures have caused significant attention around the Federal National Mortgage Association’s market performance, contributing to their stocks trading down by -9.15 percent on Friday.

Fannie Mae’s Stock Movements: Highlights

  • Analysts at Wedbush have increased their price target for Fannie Mae from 50 cents to $1, although they maintain an underperform rating, citing potential capital concerns.
  • Rising Treasury yields are affecting mortgage rates, contributing to historically low home sales as Fannie Mae predicts rates of 6.5% by the end of next year.
  • Fannie Mae is adjusting to projected home price deceleration, foreseeing a significant impact on the housing market and its associated stocks.

Candlestick Chart

Live Update At 11:37:42 EST: On Friday, January 24, 2025 Federal National Mortgage Association stock [NASDAQ: FNMA] is trending down by -9.15%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Understanding the Stock Dynamics

Trading can be a challenging yet rewarding endeavor, with its fair share of successes and setbacks. It’s important to understand that each experience provides an opportunity to learn and grow. As millionaire penny stock trader and teacher Tim Sykes, says, “Embrace the journey, the ups and downs; each mistake is a lesson to improve your strategy.” By adopting this mindset and focusing on continuous improvement, traders can develop more effective strategies and ultimately achieve greater success in the fluctuating markets.

Fannie Mae’s stock, characterized by its recent dramatic fluctuations, is causing quite a stir in the financial markets. The company, a pivotal pillar in the U.S. housing finance framework, recently had its price forecast doubled by Wedbush analysts. Nonetheless, this optimistic appraisal comes with a tinge of caution regarding significant capital needs in the near future. This foresight is prompting investors and analysts alike to take a step back, scrutinize, and formulate their approaches with care.

Current Financial Health

Fannie Mae has reported remarkable financial figures for the last quarter. The income statement revealed a net income of $4.04 billion, bolstered by $38.01 billion in total revenue. But what truly caught the eye is the company’s substantial interest income, primarily driven by its loan and mortgage portfolio. Delving into the balance sheet, Fannie Mae’s asset base stands robustly at more than $4 trillion, despite liabilities that are nearly on par. Though these numbers are intimidatingly large, they denote the sheer scale upon which the company operates, handling vast amounts of capital as a regular course of business.

Key Ratios and Insights

Peeking into key ratios unveils a nuanced picture. A glaring negatve price-to-book ratio is juxtaposed with a substantially high pre-tax profit margin of 70.9%, signifying potential for future financial improvements. Nevertheless, the company’s returns on equity and assets show negative figures, drawing attention to the pressing need for restructuring and efficiency improvements.

News Impact and Market Speculation

Recent developments headline the trajectory Fannie Mae might pursue, with soaring interest income indicating solid underlying demand for housing financing. Nevertheless, the looming trek through a weak housing market thanks to increased rates is the primary thorn in its path. Analysts project mortgage rates to linger around 6.5% over the next couple of years, acting as a principal antagonist against housing expansion.

More Breaking News

Price Changes and Reactions

Let’s break it down. Fannie Mae’s stock moved over significant price variations in the past days, creating a zigzag pattern of highs and lows. Despite current challenges, the stock opened at $6.36 on Jan 24, 2025, backed by a recurring swing that saw it end at $5.905. Such fluctuations present opportunities for short-term traders, yet caution is emphasized as the stock weathers external and internal economic headwinds.

Market Outlook

The future looks like a race against time for Fannie Mae, with changes in federal policy and regulations likely influencing the stock massively. Maintaining a steady helm in turbulent waters requires astute adoption of a financial strategy aligned with market sentiments and macroeconomic indicators.

Conclusion

The journey of Fannie Mae through this financial landscape indeed mirrors the broader challenges in the housing market. While it races against rising interest rates and potential dampening in home sales, the resilience portrayed in recent stock price adjustments keeps the stage open for unexpected success or bottlenecks ahead. For traders navigating this complex environment, the situation necessitates a comprehensive, well-informed approach equipped with strategic caution in such a volatile environment. As millionaire penny stock trader and teacher Tim Sykes, says, “Consistency is key in trading; don’t let emotions dictate your trades.” This advice underscores the importance of steady decision-making amid Fannie Mae’s fluctuating conditions.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”