Talking to Bloomberg after this morning's Q4 results, TD Ameritrade (AMTD +1.3%) CEO Tim Hockey says the president elect's tweets have boosted trading activity, but he expects things to normalize over the coming weeks as traders realize it's just a day-trade opportunity.
He's not expecting trading fireworks on inauguration day since Trump's words are likely to be more tightly scripted.
In other company news, Hockey says Ameritrade is on track to close its Scottrade purchase by Sept. 30.
While he doesn't support the complete trashing of Dodd-Frank, JPMorgan (NYSE:JPM) CEO Jamie Dimon does think the more stringent capital liquidity requirements of the post-crisis world need to be re-examined.
As for the incoming administration, Dimon says it's filled with serious people, including Treasury Secretary pick Steven Mnuchin.
On China, Dimon isn't worried about a trade war, and calls for giving the new administration time to work out a more concrete policy. While the U.S. has a number of advantages over China, he notes that country's largest banks are in the same sort of businesses their U.S. counterparts are in, and collectively earn more money than their American peers.
Turning to Europe, Dimon suggests the Eurozone may not survive long-term.
D.C. chatter says Donald Trump on his first day in office will issue an executive order freezing all past actions going back a certain period of time, among them the FHA's premium reduction from last week.
Radian Group (RDN +1.2%), MGIC Investment (MTG +2.5%), Old Republic (ORI +0.4%), Essent Group (ESNT +1.1%), NMI Holdings (NMIH +2.9%).
The Gates Foundation says it will sell 60M shares of Berkshire Hathaway (BRK.A, BRK.B) over about three years to comply with federal income tax rules that limit business ownership by private foundations.
The sale plan extends a similar plan that started in 2014 and expires in June, and the extended plan will continue through at least June 2020.
The Gates Foundation sales will take into account demand for the shares and could be suspended if selling would disrupt the market for the shares.
JPMorgan addresses the development, noting AliExpress is a major Qiwi (NASDAQ:QIWI) partner within the physical e-commerce segment and generates a large portion of revenue for that unit. Suggests likelihood a potential venture between AliExpress (NYSE:BABA) and Sberbank would direct all payment processing through Sberbank's platform.
A bank missing earnings is one thing. A bank missing earnings after the sector's huge run higher is a whole different story, and Northern Trust (NASDAQ:NTRS) - higher by 20% since the election - is down 5% in early action after its Q4 came up short.
Q4 net income of $266.5M or $1.11 per share vs. $239.3M and $0.99 one year ago, but shy of estimates for $1.13. Q4 revenue was up 7% Y/Y, but came in just a hair shy of consensus.
Assets under custody/administration of $8.541B up 10% Y/Y. AUM of $942.4B up 8%.
Net interest income of $329.3M up 11% Y/Y, with NIM of 1.20% up nine basis points. Average earning assets of $109B up 3%.
Noninterest income of $917.1M up 6% Y/Y, the bulk of that trust, investment, and other servicing fees, which also rose 6%.
Allowance for credit losses of $192M down 18% Y/Y.
Noninterest expense of $873.9M up 6% Y/Y, with comp expense of $390.7M up 7%.
Goldman Sachs (NYSE:GS) is higher by 51.5% Y/Y, including a 30% run since the election.
While the bank beat both top and bottom line estimates in Q4, the results are "probably not enough to get anyone too excited," says Evercore ISI's Glenn Schorr (who rates the stock a Buy with $235 price target). He notes lower share float and lower head count potentially set the stage for better operating leverage should revenue pick up.
Nomura's Steven Chubak (who rates Goldman a Neutral) expects a muted market reaction given the stock's big gains of late, and the whisper number of $5.50 (vs. $5.08 reported).
Q4 net income of $522M or $0.36 per share vs. $416M and $0.28 one year ago. Pretax profit margin of 41.8% up from 38.1%.
Full-year net income of $1.889B or $1.31 per share vs. $1.447B and $1.03 in 2015. Pretax profit margin of 40% up from 35.7%.
Of particular note is net interest revenue, which rose 32% for the year to $3.3B thanks to higher deposits and higher interest rates. Net interest revenue in Q4 of $907M was up 31% from a year ago. Fee waivers of $31M in Q4 vs. $153M a year earlier. Full-year fee waivers of $224M vs. $672M in 2015.
Asset management fees up 19% Y/Y in Q4 to $801M. Trading revenue down 3% to $202M.
Comp and benefits expense up 10% Y/Y to $629M. Total noninterest expense up 10% to $1.148B.
"Now that we have a clearer idea of the financial impact of the settlement with the U.S. DOJ and our performance for the year, we feel that tough measures are unavoidable," says Deutsche Bank (NYSE:DB) CEO John Cryan in a memo.
VPs, directors, and managing directors will not receive any individual bonuses, but could see variable compensation as part of their group.
Those employees up to the level of assistant VP may receive individual bonuses, but the amount will be limited.
The Management Board "unanimously" decided to waive bonuses for 2016.
The bank plans to return to normal compensation schemes next year.
Q4 net income of $3.6B or $1.14 per share vs. $3.3B and $1.02 earned one year ago. Revenue of $17B fell from $18.5B thanks to the continued wind down of Cit Holdings (which will no longer be reported separately after this quarter); Citicorp revenue rose 6%. Buybacks reduced the float by an average 5%.
CET1 ratio of 12.5% up 40 bps for the year. ROE of 6.2% up 30 bps. Tangible book value per share of $64.57 up 7%.
Global Consumer Banking revenue of $8B up 2% Y/Y, up 5% in constant dollars.
Institutional Clients Group revenue of $8.3B up 11%, with Markets and Securities Services revenue up 24%; fixed income markets revenues of $3B up 36%.
Citi Holdings revenues of $657M down 79% Y/Y, with assets down 33% to $54B (now just 3% of Citigroup balance sheet).
Echoing similar sentiment from across the globe, U.S. stock index futures are pointing to a broadly flat open on Wall Street as traders await earnings from Goldman and Citigroup, and a speech by Janet Yellen.
In currency markets, the dollar is bouncing back from losses in the previous session, when President-elect Donald Trump suggested the greenback was "too strong."
Oil is down 1.3% at $52.55/bbl, gold is 0.2% lower at $1211/ounce and the 10-year Treasury yield is up 3 bps to 2.36%.
President-elect Donald Trump's comments suggesting the greenback is "too strong" sent the dollar index tumbling to its lowest level in more than a month, but the currency recovered some of that weakness in trading overnight.
Adding to the dollar's weakness was sterling strength, which surged 3% - the biggest one day-climb since 1998 - following Theresa May's Brexit speech in which she pledged to walk away from negotiations if Britain didn't get a good deal from Brussels.
Sold were Beaver Valley and Crossroads Malls for a combined price of $49M. This brings sales of non-core malls over the last four years to 16 for $720M in gross proceeds.
Some numbers: PEI's portfolio average sales have improved 25% to $463 per square foot; NOI from Premier malls accounts for about 46% of company NOI vs. 34%; Sears locations have dropped to 10 from 27; Macy's to 15 from 24.
It's the third "mini tender" in a year made by MacKenzie Capital Management for Host Hotels (NYSE:HST). This one is for $14.01 per OP unit (minus any distributions) vs. the current share price of $18.15.
Host reminds it has nothing to do with the MacKenzie offer, and advises investors to reject.
Richard Davis has been CEO of U.S. Bancorp (NYSE:USB) since 2006, and chairman since 2007. He's to be succeeded in the CEO spot on the date of the Annual Meeting - April 18, 2017 - by President and COO Andy Cecere (who has also been elected to the board).
In anticipation of Davis' eventual exit, Cecere had been promoted to COO in January 2015, and president one year later.
Empty mall space is being quickly converted into makeshift distribution centers used for package pickup and drop-off of items purchased online, write Esther Fund and Jennifer Smith in the WSJ. Added to that are online sellers opening physical stores, either via short-term leases or long-term deals such as Amazon's upcoming move into NYC's Time-Warner Center.
“We don’t view [online retailing] as the enemy, we view it as another distribution channel,” says CBL & Associates (NYSE:CBL) CEO Stephen Lebovitz.
Consider startup Happy Returns, which accepts in-person returns from participating online retailers at six malls in California, Chicago, and Virginia. It plans to build a national network, including spots in open-air shopping centers, high-end grocery stores, and coffee shops.
Then there's the growing presence of Amazon Lockers, and Washington Prime Group (NYSE:WPG) late last year began rolling those out in 50 of its shopping centers.
While this trend could be a boost to struggling mall operators it doesn't change the fact that there are "clearly too many malls" in the country and hundreds are likely to close or become irrelevant over the coming decade, says Andy McCulloch of Green Street Advisors.
Bank earnings have been running hot, but having bid the sector sharply higher for nearly all of 2016, and particularly since the election, investors are selling the news.
The latest two examples are Morgan Stanley (MS -2.2%) and Comerica (CMA -4.2%), both of which blew past estimates this morning. Comerica, for instance, is up a tidy 85% Y/Y, including a 38% run over the last three months.
Stifel's John Guinee throws in the towel on his Sell rating, citing positive catalysts like the OPEC production cut deal, which should lead to new rig deployments by energy companies, which should be of benefit to Parkway's (NYSE:PKY) Houston office properties.
Markets are mostly lower this morning, but American Express (NYSE:AXP) is higher by 0.9% in premarket action after analyst Richard Shane upgrades to Overweight from Neutral. His price target of $90 suggests 17% upside.
Shane is expecting a cut in personal tax rates, and says that will "disproportionately benefit" AmEx's higher-income clientele.
Despite a sizable post-election rally, the stock remains attractively valued, he says, noting it's the only card issuer trading at a discount to its historical relative valuation to the S&P 500.
Q4 net income of $1.7B or $0.81 per share vs. $986M and $0.43 one year ago. Annualized ROE of 8.7% in Q4.
Institutional Securities pretax income of $1.3B up from $672M a year ago, on revenue of $4.6B, up from $3.5B. Advisory revenue of $628M up from $516M. Equity underwriting revenue of $225M slips from $352M. Sales and trading net revenue of $3.2B up from $2.3B. Fixed income sale and trading revenue of $1.5B up from $550M.
Wealth Management pretax income of $891M up from $768M a year ago on revenue of $4B up from $3.8B. Asset management fee revenue of $2.2B vs. $2.1B. Transactional revenue of $774M down from $861M. Net interest income of $984M up from $779M thanks to higher deposit and loan balances.
CET 1 ratio of 15.8%. Tangible book value per share of $31.98. Roughly $1B worth of stock bought back during Q4, and $3.5B for the year ($2.1B in 2015).