Tue, Jun. 14, 3:48 PM
- The S&P 500 is down just 0.25%, but the financial sector (XLF -1.5%) is taking a far larger beating as the idea of higher interest rates fades, with German 10-year yields falling below zero, and the U.S. 10-year Treasury yield within sight of its all-time low. KBE -2.3%, KRE -2.3%
- The FOMC concludes its two-day policy meeting tomorrow, at which updated economic projections and dots will be unveiled, along with a Janet Yellen press conference.
- How much of the panic into fixed-income is due to concern about the U.K. exiting the EU will become evident next Thursday night as that country's Brexit votes are tallied.
- Bank of America (BAC -2.5%), Citigroup (C -3.1%), Wells Fargo (WFC -2.5%), Regions Financial (RF -2.9%), KeyCorp (KEY -3.7%), PNC Financial (PNC -2.4%), Fifth Third (FITB -2.6%), SunTrust (STI -2.8%), E*Trade (ETFC -2.6%), MetLife (MET -1.6%), Prudential (PRU -1.8%), BNY Mellon (BK -2%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF
Wed, May 18, 1:08 PM
- The meme of rates lower for longer has been stood on its head in the last 24 hours thanks to some decent economic data, but also surprisingly hawkish Fedspeak yesterday.
- The fixed-income world now believes remarks from the Fed's Williams and Lockhart yesterday may have been a preview of what we'll get when the real power speaks tomorrow - Fischer and Dudley - and then on May 27, when Janet Yellen gives a speech.
- Up at 2 ET are the minutes from the FOMC's April meeting.
- The 10-year yield is higher by five basis points to 1.82% and short-term rate markets have upped expectations for a Fed move this year.
- XLF +1.85%, KBE +3.15%, KRE +3.3%
- Bank of America (BAC +3.7%), Citigroup (C +4.2%), JPMorgan (JPM +3.2%), Wells Fargo (WFC +2.1%), U.S. Bancorp (USB +2.1%), Regions (RF +3.3%), KeyCorp (KEY +3.7%), PNC Financial (PNC +2.7%), Fifth Third (FITB +3.7%), Capital One (COF +1.9%), E*Trade (ETFC +4.4%), Schwab (SCHW +4.8%), MetLife (MET +2.9%), Prudential (PRU +3.4%), Lincoln National (LNC +4.2%), BNY Mellon (BK +2.3%), Northern Trust (NTRS +2.9%)
Thu, Apr. 7, 3:09 PM
- The 10-year Treasury yield at 1.69% has returned back to levels not seen since the panicky action in mid-February. And while the Fed has marked down its expectation of rate hikes this year to just two, short-term interest rate markets haven't even priced in one.
- This leaves those whose business model depends on riding the yield curve having to contend with not only a middling macro picture, but - once again - a rates lower for longer picture (although Jamie Dimon says his big fear is that markets aren't pricing in nearly enough in the way of higher rates).
- Citigroup (C -4.1%), Bank of America (BAC -3.3%), U.S. Bancorp (USB -2.8%), KeyCorp (KEY -3.4%), Regions Financial (RF -3.4%), BNY Mellon (BK -3.6%), E*Trade (ETFC -4.7%), Manulife (MFC -5.2%), Lincoln National (LNC -3.6%)
Nov. 6, 2015, 10:04 AM
- The major averages are lower following the blowout jobs number, but the financial sector (XLF +1%) is charging ahead, enthused at what appears to finally be the near-certain prospect of higher interest rates.
- Short-term interest rate futures are pricing in about a 75% chance of a rate hike next month, and the 10-year Treasury yield is up nine basis points to 2.32%. The two-year yield has soared all the way to 0.90% - its highest level in more than five years.
- The green in this yield-starved sector is everywhere: Bank of America (BAC +3.5%), Citigroup (C +3.4%), U.S. Bancorp (USB +2.8%), Regions Financial (RF +3.7%), PNC Financial (PNC +2.4%), Capital One (COF +1.4%), Bank of New York Mellon (BK +1.9%), E*Trade (ETFC +3.5%), Schwab (SCHW +5.1%), Interactive Brokers (IBKR +3.4%), MetLife (MET +3.2%), Prudential (PRU +3.6%).
- Previously: Big beat on jobs number (Nov. 6)
- Previously: December rate hike back on after big jobs number (Nov. 6)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, KIE, IAT, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, KBWR, RWW, RYF, KBWP, KBWI, FINZ, KRS, XLFS
Oct. 20, 2015, 10:34 AM
- Revenue of $3.8B was just 1% higher than a year ago (non-GAAP), but EPS of $0.74 jumped 16% and beat estimates by $0.03.
- Noninterest expense of $2.7B fell 3%, excluding litigation and restructuring charges. Non-GAAP pretax operating margin of 31% was up 200 basis points.
- The company bought back 15.8M shares in Q3 for $690M. ROTCE was 21%, up from 18.4% a year ago.
- Previously: Bank of New York Mellon beats by $0.03, misses on revenue (Oct. 20)
- BK +2.15%
Aug. 5, 2015, 10:18 AM
Jul. 21, 2015, 10:21 AM
- Q2 adjusted net income of $868M or $0.77 per share vs. $715M and $0.62 one year ago.
- Fee revenue of $3.012B up 3% Y/Y. Net interest revenue of $728M up 8%, with NIM of 1% up two basis points.
- Non-GAAP noninterest expense of $2.603B down 1% Y/Y. Staff expense of $1.434B flat. Staff expense as a percent of revenue of 37% down 100 basis points.
- Non-GAAP pre-tax operating margin of 33% up 300 basis points. Non-GAAP ROTCE of 22.5% up 410 basis points.
- AUM of $1.724B up 5% Y/Y.
- CET1 ratio of 10.9% up 10 basis points for the quarter. $1B returned to shareholders during quarter through dividends and buybacks.
- Previously: Bank of New York Mellon beats by $0.11, beats on revenue (July 21)
- BK +2.35%
Feb. 6, 2015, 9:50 AM
- Financials have been mercilessly pounded in 2015 as hopes for higher interest rates looked like they might be dashed yet again, but today's blowout jobs number - firmly putting a June rate hike on the table - has brought in the dip-buyers.
- The major averages are flat, but the XLF is up 1.4%. The Regional Bank ETF (KRE +2%) and the Bank ETF (KBE +2.1%) are doing even better.
- Among the yield-starved banking names: Bank of America (BAC +3.1%), JPMorgan (JPM +2.6%), Citigroup (C +2%), Regions Financial (RF +4%), KeyCorp (KEY +3%), PNC Financial (PNC +2.9%), SunTrust (STI +2.3%), Zions (ZION +3.6%), Synovus (SNV +2.3%).
- Insurers: MetLife (MET +2%), Prudential (PRU +3.2%), Lincoln National (LNC +4.6%). AIG (AIG +1.5%).
- Trust banks: BNY Mellon (BK +2.7%) State Street (STT +1.9%), Northern Trust (NTRS +2.3%).
- Online brokers (currently getting killed on money-market fee rebates): Schwab (SCHW +4.5%), TD Ameritrade (AMTD +3.5%), E*Trade (ETFC +2.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Oct. 20, 2014, 7:41 AM
Sep. 9, 2014, 12:24 PM
- The Fed intends to impose a capital surcharge on banks tougher than the international standard, according to Fed Governor Daniel Tarullo's prepared remarks for the Senate Banking Committee. Those banks with heavier reliance on short-term funding like overnight loans - i.e. Goldman Sachs (GS -1%) and Morgan Stanley (MS -1.8%) - will likely face even more rigorous requirements.
- Officials haven't yet decided on a number, but reportedly are considering as much as 200 basis points more than the top range of 2.5% of risk-weighted assets agreed to by international regulators.
- What's not yet clear is who would need to raise capital to meet the new, tougher standard.
- Citigroup (C -1%), Bank of America (BAC -0.6%), JPMorgan (JPM -1.3%), Wells Fargo (WFC -0.4%), State Street (STT -1.1%), Bank of New York Mellon (BK -0.9%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Jun. 30, 2014, 9:50 AM
- Having exited his holdings in State Street (STT +0.2%) late last year, Nelson Peltz has set his sights on Bank of New York Mellon (BK +3.8%), with his Trian Fund Management disclosing a 9.33M share stake in the company.
- Partly in response to pressure from Peltz, State Street is perceived to have been more aggressive than Mellon Bank in cutting costs, selling off non-core units, and in prioritizing capital returns over acquisitions. The stocks of the two companies, however, are each up about the same amount since Peltz began pushing for change at State Street in late 2011.
Jun. 17, 2014, 12:30 PM
- Bank of New York (BK +2.1%), State Street (STT +2.4%), and Northern Trust (NTRS +2.7%) are all moving sharply higher in lockstep as the Fed begins its 2-day policy meeting.
- Earnings at all three have been weighed down by ZIRP, and with new "dots" (representing the timing of rate hikes) coming from the FOMC tomorrow, perhaps the trio are anticipating a more hawkish view. Following a fast CPI report earlier today, the 10-year Treasury yield is higher by four basis points to 2.64% and the first Fed rate hike is priced in for Spring 2015.
- Previously: Treasury prices slip after fast CPI report
Apr. 23, 2014, 2:45 PM
- BNY Mellon (BK +2.1%) has hired Goldman Sachs to find a buyer for the unit, reports Bloomberg, and is expected to begin receiving offers in about a month. The corporate trust arm assists companies with making payments on debt they issue as well as helping customers recover funds in event of default.
- The business services about $12T in outstanding debt, with 3.5K employees at 61 global offices, but has become less lucrative since the financial crisis made the packaging and selling of loans a more difficult business. Possible buyers could be large commercial banks looking to build out their own trust business such as Bank of America (BAC), U.S. Bancorp (USB), Wells Fargo (WFC), or PNC Financial, says Guggenheim's Marty Mosby.
- On a recent earnings call, BNY management said run-off in the unit would cut annual revenue by $50M-$75M annually, roughly 0.5% of total bank revenue.
Oct. 16, 2013, 12:34 PM
- BNY Mellon (BK +0.6%) lags the market and its trust bank competitors State Street (STT +2.1%) and Northern Trust (NTRS +2.5%) after Q3 results (from BK and NTRS) this morning.
- Mellon's adjusted net income of $706M was off about 2% from a year ago, with revenue off 7%. Assets under custody of $27.4T gained 4%. Foreign exchange fees of $160M fell 12%. Net interest revenue of $772M rose 3%, though NIM fell 4 basis points to 1.16%.
- Northern Trust adjusted net income of $173.9M was off 2.7% Y/Y, with revenue up 8%. Assets under custody of $5.2T rose 10%. Noninterest income (77% of total) rose 11%. Trust, investment, and other servicing fees rose 8%. Foreign exchange income of $62.8M rose 43%. Net interest income of $244.8M fell 5% as net interest margin declined 7 basis points to 1.14%.
- Previous: BNY Mellon deals with accusations of over-charging clients for FX activity.
Jul. 17, 2013, 11:45 AM
More on BNY Mellon (BK +2.6%) Q2 earnings: Custody assets up 4% Y/Y. Investment services fees up 4%, investment management and performance fees up 6%. Net interest revenue up 3.1%, with NIM of 1.15% off 10 bps from a year ago. The expense reduction drive continues with noninterest expense of $2.8B of 7.4% Y/Y. $900M in capital generated during Q2, funding $500M in buybacks and boosted dividend. (PR)| Jul. 17, 2013, 11:45 AM
Jul. 17, 2013, 10:28 AMNorthern Trust (NTRS -2.9%) slips after missing earnings expectations, with Guggenheim's Marty Mosby pinning the blame on higher-than-anticipated expenses, particularly compensation which rose 4% Y/Y as staffing levels increased 3%. Larger rivals BNY Mellon (BK +2.7%) and State Street (STT +1.5%) have been more successful cutting costs amid barely visible interest rates. | Jul. 17, 2013, 10:28 AM