iShares U.S. Financials ETF(IYF)- NYSEARCA
  • Fri, Apr. 15, 7:49 AM
    • Earlier this month, a federal judge pulled a stool leg out from the Financial Stability Oversight Council and its "too big to fail" designations when she struck down MetLife's SIFI status, and another court is questioning the constitutionality of the Consumer Financial Protection Bureau.
    • Regulators, meanwhile, continue to regulate, and this week declared the "living wills" of nearly all of the nation's major banks are unacceptable. The banks promise to comply, if only they could figure out what that means.
    • That Dodd-Frank reform has failed and needs to be reformed is pretty much a foregone conclusion at this point. The question is whether the judicial or legislative branch does it, and if it's the legislative branch, what would a Clinton-led rewrite look like? Sanders? Cruz?
    • Now read: A New Normal: How Regulations Have Changed The Way We Pick Bank Stocks (April 12)
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, FAZZ
    | Fri, Apr. 15, 7:49 AM | 17 Comments
  • Wed, Apr. 13, 11:31 AM
    • JPMorgan's revenues and profits both fell from a year ago, but the lame performance of the banks thus far this year has already priced in a weak quarter. JPMorgan is higher by 3.8%, with Citigroup (C +4.7%), Bank of America (BAC +3.5%), Wells Fargo (WFC +1.7%), Goldman Sachs (GS +2.9%), and Morgan Stanley (MS +4.4%) joining the party. The XLF is higher by 1.75% vs. the S&P 500's 0.7% advance.
    • But what about all of these players (except for Citi) having their living wills rejected by the Fed, FDIC, or both? A sideshow, no doubt. Regulators are going to regulate - like the commercial goes, "It's what they do." Banks will tweak plans, numbers, or whatever they need to in order to get D.C. to eventually sign off.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, IYG, FNCL, SEF, FXO, RYF, KCE, FINU, RWW, XLFS, FINZ, FAZZ
    | Wed, Apr. 13, 11:31 AM | 24 Comments
  • Wed, Apr. 13, 8:12 AM
    • As leaked last night, regulators have sent so-called living wills by five major U.S. banks back to the drawing board. JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), BNY Mellon (NYSE:BK), and State Street (NYSE:STT) have until Oct. 1 to revise their plans or face potential penalties.
    • Official announcement
    • Regulators were split on Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), with the FDIC giving Goldman a thumbs down, but the Fed not, and just the opposite for Morgan.
    • Citigroup (NYSE:C) is the only one of the major banks not to have their plan rejected, though both the Fed and FDIC found "shortcomings" that need to be addressed by July 2017.
    • The next time you're thinking about complaining over some silly fee charged by your lender, have a thought for the armies of accountants, analysts, and lawyers the bank is paying to comply with D.C.'s whims.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, FAZZ
    • Now read: Financials Are Set To Miss Already Lowered Earnings Estimates
    | Wed, Apr. 13, 8:12 AM | 97 Comments
  • Tue, Apr. 5, 3:56 PM
    • Showing why there's a good chance these annual stress tests will be of little use the next time a crisis hits the economy or markets, last year's submission required banks to model what loan losses might look like if oil shot up to $110 per barrel. Black gold has since plunged to $30.
    • "One thing that people point out time and time again is that if you only looked in the rear-view mirror in 2006, you would never expect a 30% decline in home prices,"says Deloitte & Touche's David Wright. The Fed declined comment.
    • One curveball thrown in by D.C. this year was for banks to factor negative interest rates similar to what Europe and Japan are experiencing right now.
    • One fact remains: That banks have built up such large capital cushions, it's hard to imagine them failing the quantitative portion of the stress tests. At issue for most will be the qualitative portion - where is the data coming from and how reliable is it. "Firms that don't have a buttoned up process for reconciling and reporting the data … will be more vulnerable to a fatal problem," says PwC's Michael Alix.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ
    | Tue, Apr. 5, 3:56 PM | 2 Comments
  • Mon, Apr. 4, 9:36 AM
    • Global regulators might finally be warming to the idea that the pendulum on bank rules has swung too far to the stringent side. Following a pledge earlier this year from Basel, that same group is reportedly considering a new way of calculating leverage ratios which could end up easing capital requirements for some lenders.
    • The change involves the netting of derivatives exposures.
    • No celebration is called for just yet - the regulators are also said to be planning to lift the minimum leverage ratio threshold by 100 basis points to 4%, which would essentially offset any boost the banks would get from the new derivatives math.
    • This is really of most concern to European lenders like Deutsche Bank (NYSE:DB), Credit Suisse (NYSE:CS) and UBS. U.S. banks have to meet a 5% leverage ratio.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ
    • Now read: Credit Suisse And Deutsche Bank Still At The Forefront (Just Where They Don't Want To Be)
    | Mon, Apr. 4, 9:36 AM | 5 Comments
  • Wed, Mar. 30, 3:44 PM
    • Nobody wants banks, writes Ken Brown in the WSJ, but everybody wants commercial real estate. The result: Bank yields are higher than that of CRE.
    • A report from BAML says the big banks have boosted dividends faster than any other sector, and the total cash yield to owners, including buybacks, is at its strongest level since 2003. "Both are signs of strength," writes Brown, "though investors refuse to believe them."
    • On the other hand, "Real estate is not cheap anymore," says Green Street's Peter Rothemund. One particular warning sign: Foreigners flooded the market last year, buying a net $57B of U.S. property vs. an average of just $3B annually for the previous five years.
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    | Wed, Mar. 30, 3:44 PM | 1 Comment
  • Tue, Mar. 29, 2:49 PM
    | Tue, Mar. 29, 2:49 PM | 10 Comments
  • Thu, Mar. 24, 10:43 AM
    • Oil's lower by 2.9% today and about 10% for the week, but it's the financial sector (XLF -1.3%) leading the S&P 500's 0.5% decline today. This even as Jim Bullard becomes the latest Fed speaker to more or less disavow last week's dovish FOMC meeting result, and suggest higher rates could come as soon as April's get-together.
    • Morgan Stanley (MS -2.9%), Citigroup (C -2.5%), BB&T (BBT -1.3%), U.S. Bancorp (USB -1.3%), MetLife (MET -2.8%), Prudential (PRU -3.5%)
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    | Thu, Mar. 24, 10:43 AM | 14 Comments
  • Thu, Mar. 17, 2:44 PM
    • Increasingly negative policy rates overseas, lame global growth, high financial market volatility, and now a Fed on pace to hike substantially less than hoped ... "None of this is likely supportive of financials sector relative performance," say Wells Fargo's Gina Adams and Peter Chung, downgrading banks from Overweight to Market Weight, and capital markets to Underweight from Market Weight.
    • The only group the team likes as Overweight is insurance, which is likely to show the strongest earnings this year (hard to fathom given low rates).
    • The bank's analysts cover 70 of 90 names in the S&P 500 financials sector, with just 28 of those 70 rated Outperform.
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, KIE, IAT, IYG, IAK, SEF, FNCL, FXO, KBWB, QABA, RYF, KBWR, FINU, KCE, KRU, RWW, KBWP, KBWC, KBWI, FINZ, KRS, XLFS
    | Thu, Mar. 17, 2:44 PM | 8 Comments
  • Wed, Mar. 16, 12:24 PM
    • "Q1 is normally our strongest quarter and it hasn't been very strong," Deutsche Bank CEO John Cryan told an investment conference earlier today.
    • There's apparently "good" volatility - which boosts trading revenue - and "bad" volatility, which does the opposite, and Q1 was mostly the "bad" kind. According to analytics firm Tricumen, FICC revenue at banks is expected to fall to $19.2B in Q1 of this year. That's the worst Q1 in four years and down from $22.6B a year ago, and $30B in 2012.
    • "Bad" volatility: "There are more and more signs of fragmentation and liquidity is drying up. Banks are still deleveraging and are required to hold greater capital against their balance sheets ... it's difficult for our customers to make money," says the head of FICC trading at a top-tier bank. "Macro hedge funds are really struggling, and when our customers don't make money, we struggle."
    • Speaking at the same conference, UBS CEO Sergio Ermotti: "We and the industry are facing unprecedented headwinds ... Industry activity levels in investment banking advisory have slowed markedly year on year."
    • Previously: Credit Suisse tumbles as management pulls out of conference (March 16)
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, IYG, SEF, FNCL, FXO, RYF, FINU, KCE, RWW, KBWC, FINZ, XLFS
    | Wed, Mar. 16, 12:24 PM
  • Fri, Mar. 11, 9:33 AM
    • "If you follow the math you can't reach any other conclusion," says Stanford Profesor Darrell Duffie, who's work previously spurred changes in how banks value credit risk and debt.
    • Swaps deals are funded with money borrowed from the bank's treasury, and that cost is deducted from the derivatives' value. That's wrong, says Duffie. Banks instead should charge trading partners more up-front, thus freeing up capital for, say, dividends.
    • Duffie hasn't yet shown the paper to any Wall Street executives. “I imagine there’s going to be some howling by the banks because they think their accounting practices are right."
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, IYG, SEF, FNCL, FXO, RYF, FINU, KCE, RWW, KBWC, FINZ, XLFS
    | Fri, Mar. 11, 9:33 AM
  • Thu, Mar. 3, 8:37 AM
    • The global economy has been powered by credit for more than 40 years, says Bill Gross - noting official credit outstanding today of $58T is 58x that of 1970. That expansion, though, looks to be ending, as private sector savers are growing leery, and regulators build fences against fast creation. And don't forget the meager returns, with negative interest rates in 40% of Euroland, and out ten years on the curve in Japan.
    • The collapse in bank stocks globally isn't necessarily about energy losses. Price charts since 2007 for players like Citigroup (NYSE:C), Bank of America (NYSE:BAC), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB), and Goldman Sachs (NYSE:GS) suggest the sector's either a screaming cheap buy, or "a permanently damaged victim of writes-offs, tighter regulation, and significantly lower futures margins. I'll vote for the latter."
    • Then there's insurers, whose business models - which depend on 7-8% returns from risk assets - are at risk. They're not going bankrupt, but future profitability for companies like MetLife (NYSE:MET), Prudential (NYSE:PRU), and Hartford (NYSE:HIG) will be stifled as claims can't be covered as easily when investment returns are so lame.
    • The same goes or pension funds, and Puerto Rico is going down Detroit's path not just because of overpromised benefits, but because they're not earning enough on their investment portfolios to cover those promises.
    • Central bankers, meanwhile, think they can solve things by cutting rates just a bit further.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, SEF, FNCL, FXO, RYF, FINU, RWW, FINZ, XLFS
    | Thu, Mar. 3, 8:37 AM | 35 Comments
  • Wed, Feb. 24, 1:13 PM
    • It's another nasty session for banks today, writes David Reilly, and the KBW Nasdaq Bank Index is now lower by almost 20% YTD, with names like Citigroup (C -2.3%) and Bank of America (BAC -2.3%) down nearly 30%.
    • The nasty feedback cycle begins with the crash in the oil price, which stings banks thanks to worries of big losses on energy-lending, and more broadly hurts lenders by dragging down the stocks in general. This in turn, leads to concern about a recession would further ding bank profits.
    • More ominous, the yield curve is flattening. Using the spread between two-year and 10-year Treasury notes isn't a bad proxy for bank profits and it's slumped to just 0.96% today. Old-timers will remember when this spread used to turn negative - a sure sign of looming recession.
    • The good news, says Reilly, is that the energy crash and low rates don't look to cause the sorts of losses seen in 2008. Take the long view - the cycle will someday turn.
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    | Wed, Feb. 24, 1:13 PM | 35 Comments
  • Fri, Feb. 19, 12:47 PM
    • "The  Federal Reserve is playing with fire on bank capital," write Anthony Currie and Gina Chon at Reuters, responding to the central bank's green light for Capital One (NYSE:COF) to add $300M to its buyback program.
    • While the amount is of little consequence to CapOne's capital ratio, say the authors, and it's probably not a bad idea to add to repurchases after the recent shellacking in bank shares, the whole point of the stress tests were to monitor earnings and balance sheets over a longer time frame than only a few weeks.
    • Further, the results of this year's stress tests are due in just a few weeks.
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    • Previously: Capital One adds $300M to buyback (Feb. 17)
    | Fri, Feb. 19, 12:47 PM | 3 Comments
  • Thu, Feb. 11, 2:37 PM
    • Oil's lower by 3.3% today, but it's the financial sector (XLE -3.1%) again leading the S&P 500's 2.15% decline.
    • For the year, the XLF is down by 17.9%, easily outpacing on the downside energy (down 13%) and the S&P 500 (down 11%).
    • With the 10-year yield plunging all the way to 1.6% and short-term rates markets now beginning to price in Fed rate cuts this year, the banks are being hit particularly hard: Bank of America (BAC -8.1%), Citigroup (C -7.6%), JPMorgan (JPM -5.1%), Wells Fargo (WFC -2.9%), Goldman Sachs (GS -5.4%).
    • Leading regionals (KRE -4.4%) lower are KeyCorp (KEY -5.9%), Huntington Bancshares (HBAN -4.9%), Fifth Third (FITB -5.4%), and PNC Financial (PNC -4.4%).
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    • Previously: Lots of negative rate talk at Yellen hearing (Feb. 11)
    • Previously: Insurers punished as rates plunge (Feb. 11)
    | Thu, Feb. 11, 2:37 PM | 69 Comments
  • Wed, Feb. 10, 9:15 AM
    • Most assume central bank benchmark deposit rates can't get that far below zero before lenders find it cheaper to actually hoard physical cash rather than depositing it. A Bank of England study, for instance, suggests a floor of about minus 0.5%.
    • A new report from JPMorgan, however, says England could go to negative 2.5%, the EU -4.5%, Japan -3.45%, and the U.S. -1.3%.
    • It's good news for banks, whose earnings (and balance sheet strength) are thought to be at risk as policy rates head into negative territory.
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
    | Wed, Feb. 10, 9:15 AM | 16 Comments
IYF Description
The iShares Dow Jones U.S. Financial Sector Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the financial and economic sectors of the U.S. equity market, as represented by the Dow Jones U.S. Financials Index.
See more details on sponsor's website
Sector: Financial
Country: United States
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