Dj Charles Schwab Corp. Stock Underperforms Friday When Compared To Competitors Despite Daily Gains

The Charles Schwab Corp. SCHW has been planning to introduce spot cryptocurrency trading once the U.S. regulations related to these assets ease, which is likely to occur once President-elect Donald Trump takes office. This was stated by the incoming CEO Rick Wurster in an interview with Bloomberg.

Rationale Behind Schwab’s Move

Wurster, who will step into the new role on Jan. 1, 2025, mentioned that Schwab’s clients have already shown interest and actively participated in the cryptocurrency space via investment vehicles such as exchange-traded funds , futures and closed-end funds, and have earned decent returns.

Now, SCHW aims to move further by directly offering cryptocurrency trading. He stated, “We’ve been waiting on a change in the regulatory environment … and we’re confident that we think that will come in short order.”

“Crypto has certainly caught many’s attention, and they’ve made a lot of money doing it,” Wurster added.

Further, Wurster shared that artificial intelligence will likely impact wealth-management business significantly. “It used to be that 60,000 times a month, we would have a phone rep spend more than three minutes searching for a piece of information to answer a client question. Now we have built an AI capability that finds that information in seconds,” he stated.

Schwab has been in the crypto space for a long time while facing competition from State Street Corp. STT and Robinhood Markets, Inc. HOOD. This August, STT entered into a strategic partnership with Taurus SA to enhance its digital solutions including crypto service. HOOD added four cryptocurrencies to its crypto platform earlier this month, bringing the total number of cryptocurrencies to 19.

Thus, by introducing crypto trading, Schwab will enter a profitable market that has seen growing demand from clients.

SCHW’s Zacks Rank & Price Performance

In the past six months, SCHW shares have gained 11.7%, underperforming the industry’s 22.7% growth.

Currently, Schwab carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research

The Charles Schwab Corporation (SCHW) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, SCHW's 50-day simple moving average crossed above its 200-day simple moving average, known as a "golden cross."

There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term moving average. Typically, a golden cross involves the 50-day and the 200-day moving averages, since bigger time periods tend to form stronger breakouts.

A successful golden cross event has three stages. It first begins when a stock's price on the decline bottoms out. Then, its shorter moving average crosses above its longer moving average, triggering a positive trend reversal. The third and final phase occurs when the stock maintains its upward momentum.

A golden cross is the opposite of a death cross, another technical event that indicates bearish price movement may be on the horizon.

Over the past four weeks, SCHW has gained 11.3%. The company currently sits at a #3 (Hold) on the Zacks Rank, also indicating that the stock could be poised for a breakout.

Once investors consider SCHW's positive earnings outlook for the current quarter, the bullish case only solidifies. No earnings estimate has gone lower in the past two months compared to 9 revisions higher, and the Zacks Consensus Estimate has increased as well.