Axos Financial Stock Falls on Interest Rates, H&R Block Deal Risk
Shares of Axos Financial (NYSE: AX) fell 10% in trading on March 3, before rebounding slightly to finish down 9%. Today's big drop was caused by two things: the surprise announcement by the U.S. Federal Reserve that is was cutting a key benchmark that affects every bank, and a filing with the SEC in which Axos said its deal with H&R Block (NYSE: HRB) was at risk of termination.
Let's start with the macro news that's affecting the banking sector: the lowering of the Federal Reserve's target range for short-term federal funds. The Fed board voted unanimously today to lower the range by 50 basis points -- which works out to half a percentage point -- in an effort to offset the economic impact of the coronavirus on the global economy.
This move was made to help stimulate economic activity, as lowering lending costs for individuals and businesses should encourage continued expenditures, ranging from home and auto purchases among consumers to capital investments among businesses.
Source Fool.com
