Schwab Eyes Worst Month Since 1987

Charles Schwab Corp. is on pace for its worst month in more than 35 years, sparking a debate among analysts as to whether the brokerage giant has been unfairly punished by investors amid growing fears about the U.S. banking sector.

Shares of the firm have plunged 34% in March, set to be their biggest drop since October 1987, the month when the biggest single-day stock market crash, dubbed Black Monday, occurred.

The rout has wiped out $47 billion in market value from Schwab, roughly equivalent to the size of Truist Financial Corp.

“There are times in markets where logic is thrown out the window and emotion takes over and I feel like this is one of those moments with Schwab,” said Adam Sarhan, founder of 50 Park Investments.

He added that the rout is a “historic buying opportunity” for the financials sector as a whole and something not seen since 2008.

Other brokerage stocks are also lower, just not as much as Schwab. Interactive Brokers Group Inc. for instance, is down about 4.5% this month.

Schwab is facing a pair of headwinds. Its banking arm, one of the largest in the U.S., is dealing with some of the same issues that plagued the now-defunct Silicon Valley Bank.

Like many of it peers, Schwab invested in long-dated bonds during a period of historically low interest rates and is stuck with losses on those investments as the Federal Reserve has increased interest rates over the last year.

Related: Why Schwab’s $7T Empire is Showing Cracks