Fri, Sep. 23, 4:00 PM
- JPMorgan (NYSE:JPM) yesterday announced it will process payments for Wal-Mart on its closed-loop network ChaseNet. While the economics of the deal are likely to benefit Wal-Mart, write KBW's Brian Kleinhanzl and Michael Brown, it's nevertheless the addition of one of the largest U.S. retailers to those accepting ChaseNet, now including Starbucks, Marriott, United, Rite Aid, Chevron.
- JPMorgan is building scale, they say, and that needs to continue longer term.
- "The bigger impression for us is that adding Wal-Mart to ChaseNet will continue to enhance the credibility of ChaseNet ... we’d expect JPMorgan to experience a quicker adoption of ChaseNet by other merchants not on the platform already ... Overall, we view today’s announcement as a small incremental positive."
- They reiterate their Outperform rating on the bank.
Fri, Sep. 23, 12:05 PM
- The proposed rule would make it more difficult for banks to be involved with physical commodities by raising capital requirements. Further, banks would be prohibited from activities involving power plants, and owning or storing copper.
- The Fed today begins a 90-day period of accepting public comment.
- Banks like Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) have relied on grandfather clauses to engage in physical commodity businesses not allowed for other lenders, while Bank of America (NYSE:BAC), Citigroup (NYSE:C), and JPMorgan (NYSE:JPM) remain somewhat involved in commodity trading and energy tolling activities.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF
Tue, Sep. 20, 7:48 AM
- Since Goldman Sachs (NYSE:GS) began offering ETFs one year ago, it's already brought in $2.4B of assets, making their funds among the most successful product launches in ETF history.
- JPMorgan (NYSE:JPM) - which entered the ETF business two years ago - has garnered just over $800M, despite the earlier start and more successful performance record.
- "Goldman did quite a bit of work priming the pump, pre-vetting its strategies with institutional clients," says Morningstar's Ben Johnson. "This is a marathon, not a sprint," says JPMorgan's ETF boss Bob Deutsch.
- Helping Goldman are low prices - its flagship fund, the Active Beta U.S. Large Cap Equity ETF, charges just nine basis points. Then there's the Goldman name: "They have a real panache if you are some RIA in Iowa who has never had a relationship with Goldman at all,” says FactSet's David Nadig, who imagines said RIA going to clients and saying, "We can now get access to Goldman’s quant expertise for the same price as most of the index funds we look at at Vanguard."
- Source: Bloomberg
Tue, Sep. 20, 7:21 AM
- Berkshire Hathaway (BRK.A, BRK.B) investment officer Todd Combs - rumored to be part of the Buffett succession plan - has been elected to the Board of Directors at JPMorgan (NYSE:JPM), effective September 19.
- Prior to joining Berkshire in 2010, Combs was the founder and CEO of Castle Point Capital. Warren Buffett has called his hiring "one of my best moves."
Thu, Sep. 15, 11:08 AM
- Analyst Matt O'Connor checked the price action on Bank of America (NYSE:BAC) after its $4B accounting error caused a retroactive failure in the CCAR, JPMorgan (NYSE:JPM) after the London whale trading loss, and M&T Bank (NYSE:MTB) after regulators found "significant weakness" in risk management.
- He produced this chart which shows the median average selloff (both absolutely and relative to peers). Bottom line, says O'Connor: Wells' (NYSE:WFC) decline relative to the KBW Bank Index is about 50% done.
- He maintains his Buy rating and $59 price target.
- WFC is lower by another 2.1% today to $45.55, while the rest of the banking sector is modestly higher.
Thu, Sep. 15, 9:38 AM
- Upping its ETF game, JPMorgan Asset Management (NYSE:JPM) opens for business the actively-managed JPMorgan Disciplined High Yield ETF (BATS:JPHY).
- The fund's managers will attempt to systematically exclude high-yield paper with what they consider to be unattractive risk-reward profiles.
- With this launch, JPMorgan now offers 10 ETF products.
Wed, Sep. 14, 8:08 AM
Tue, Sep. 13, 10:36 AM
- The head of the CFPB was on the tape earlier saying the Wells Fargo (WFC -3.1%) account opening case isn't a signal of a broader problem in the industry, but Cowen's Jaret Seiberg says not to underestimate the political risk to the likes of Wells, Bank of America (BAC -1.8%), Citigroup (C -1.9%), and JPMorgan (JPM -1.2%). With extra ammunition given to the "break up the banks crowd," this is no longer a negligible risk.
- Wells Fargo has enjoyed special status compared to the other mega banks since the financial crisis, says Seiberg, but "life [is] about to get worse" for Warren Buffett's favorite. The bank, says Seiberg, will no longer get the benefit of the doubt. "[The] fall from golden child to problem child can be difficult and expensive."
- The Senate Banking Committee is set to hold a hearing on the Wells Fargo matter on Sept. 20.
- As for the industry as a whole, Treasury Sec. Jack Lew took to the Delivering Alpha conference this morning to wag a finger and say 'I told you so,' to those who complain about Dodd-Frank and over-regulation of banks, in general.
Tue, Sep. 13, 2:09 AM
- Despite the penalties imposed on Wells Fargo (NYSE:WFC), there is probably no broader problem in the U.S. banking industry over abusive sales practices, according to the head of the Consumer Financial Protection Bureau.
- Regulators fined the company a total of $185M last Thursday, while Moody's warned the episode would negatively affect the bank's debt. Wells paid another $5M to customers for creating more than 2M fake accounts.
- Related tickers: JPM, C, BAC, MS, USB, COF, FITB, TD, PNC, STI
Mon, Sep. 12, 12:56 PM
Fri, Sep. 9, 10:37 AM
- Wells Fargo (WFC -0.7%) yesterday was fined $185M over its employees opening millions of fraudulent deposit and credit card accounts in order to meet sales targets and collect bonuses. The bank has fired 5.3K over improper practices.
- Over at Rafferty, Dick Bove downgrades Warren Buffett's ([BRK.A]], BRK.B) favorite bank, calling it a "very big problem," that's caused "significant" damage to Wells' business model.
- While "cross-selling" is something most lenders try to do, Wells Fargo has built its brand around this theme more than its peers. The charges, says Bove, reopens the question about whether customers can trust their banks and to whether another wave of regulation is needed.
- Compass Point's Isaac Boltansky says the news is "bigger than WFC" and should be viewed as "clear, undeniable warnings" to the entire industry on cross-selling. The bit firmly between its teeth now, look for more enforcement actions from the CFPB.
- Similar thoughts are hitting the tape from Sandler O'Neill, Evercore ISI, and RBC.
- Interested parties include: BAC, JPM, C
- ETFs: KBE, KRE
Fri, Sep. 9, 7:22 AM
- After a nice run higher, Macquarie analyst David Konrad takes some chips off the table on JPMorgan (NYSE:JPM), downgrading to Neutral from Outperform. The $70 price target remains.
- The interest rate environment should remain challenging, says Konrad, and cost-savings are largely priced into the stock. "Meaningfully improved ROE may be difficult with higher-than-peer required capital buffers."
- JPM -0.65% to $68.81 premarket.
Tue, Sep. 6, 11:03 AM
- August monthly performance was: +1.89%
- 52-week performance vs. the S&P 500 is: -13%
- No dividends were paid in August
- Top 10 Holdings as of 6/30/2016: JPMorgan Chase & Co (JPM): 3.02927%, US Treasury Note 1.125%, Citigroup Inc (C): 2.72752%, Bank of America Corporation (BAC): 1.75979%, General Electric Co (GE): 1.64495%, Apache Corp (APA): 1.43672%, Merck & Co Inc (MRK): 1.40565%, Royal Dutch Shell PLC Class A (OTCPK:RYDAF): 1.39841%, Morgan Stanley (MS): 1.39796%, US Treasury Note 0.625%
Mon, Sep. 5, 10:29 AM
- Barclays (NYSE:BCS) has hired JPMorgan (NYSE:JPM) banker Tim Throsby to head its Corporate and International division, ending a six-month search for the number two job under CEO Jes Staley.
- He'll also run Barclays' investment banking business within that division, filling the gap left by the departure of Tom King, who retired from the bank in March.
- Subject to regulatory approvals, Throsby is expected to take up his new role in January.
Thu, Sep. 1, 2:36 PM
- The Fed stress tests are the centerpiece of post-crisis bank regulatory reform, and that the banks would even consider challenging a bureaucracy that's not in the habit of being challenged is a shocker. The WSJ, however, reports bank trade groups and industry advisers are debating just that, but say talks are still in an early stage.
- Fans of Dodd-Frank will naturally argue the stress tests have made the banks far safer, but at what expense to investors? A main area of contention is the opacity of the tests, says the report, as well as the ability of regulators to block returns for subjective reasons (such as challenging them?).
- Perhaps lenders are feeling their oats following MetLife's successful challenge of its SIFI designation. If the insurer can take on Uncle Sam and win, why not the banks?
- Interested parties are too numerous to name, but include: Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), Citigroup (NYSE:C), JPMorgan (NYSE:JPM).
- ETFs: KBE, KRE
Thu, Sep. 1, 4:09 AM
- Despite an increasing regulatory burden and lackluster share performance, the U.S. banking industry just logged its most profitable quarter ever, according to figures from SNL Financial and S&P Global Market Intelligence.
- Earnings for the three-month period totaled $43.6B, compared to the $43.01B in Q2 of 2015, a 1.4% beat.
- On a sequential basis, the April-to-June period topped the previous quarter by $4.56B, an 11.7% rise.
- Related tickers: JPM, C, BAC, WFC, GS, MS, USB, BK, STT, PNC, COF