Barclays’ share price has declined over the past few days as investors focus on the state of the economy and decisions from the Bank of England (BOE) and the Federal Reserve. The stock is currently trading at 155.92p, its lowest level since May 23rd of this year. Despite this, it remains about 27% below its year-to-date high, indicating the stock is still in a bear market.

Barclays faces several challenges that could impact its earnings. On the positive side, the bank stands to benefit from the BOE and Fed’s decision to raise interest rates. Higher interest rates are expected to boost Barclays’ interest income in the coming months, especially since the bank manages over £1.3 trillion in assets.

However, rising interest rates also bring the risk of pushing major economies like the UK and US into recession. Some analysts even suggest that a recession may have already started. This could result in lower income for the bank, especially as inflation continues to rise.

Barclays is also facing significant challenges in its investment banking division. 2023 has been one of the worst years for investment banking, with the volume of mergers and acquisitions in the US dropping by 29% to $945 billion. In Canada, the decline has been even steeper at 55%. Globally, deal volumes have fallen by 21% to $2.1 trillion.

Barclays has advised on 111 deals worth over $305.5 billion, down from $382 billion in 2021. The same decline is seen in equity capital markets, where deal volume has dropped to $240 billion, and in debt markets, which have fallen to $3.4 trillion. Consequently, Barclays’ investment banking revenue has plummeted from $2.2 billion to $1.2 billion.

With key business segments under pressure, Barclays’ share price is likely to continue facing challenges. The only bright spot could be its Fixed Income, Currency, and Commodities (FICC) division, which may benefit from increased market volatility.

The hourly chart indicates that Barclays’ share price has been on a downward trend for the past few weeks, falling from a high of 173.48p to its current level around 155p. The stock has dropped below both the 25-period and 50-period moving averages, while the MACD is below the neutral point. It has also fallen slightly below the important support level of 157.24p, which was the high point on May 18th.

In the short term, the outlook for the stock remains bearish, with the next key support level at 154.48p, the high from May 5th. However, if the stock moves above the resistance at 158p, it would invalidate this bearish view.