SPDR S&P Bank ETF(KBE)- NYSEARCA
  • Wed, Jul. 27, 11:49 AM
    • Having covered bank stocks on and off since 1985, the team at Oppenheimer says portfolio managers have never been fans of the sector, but the hatred today is off the charts - even as the reasons for that hatred have gone away.
    • Banks used to be opaque, they overpaid for acquisitions, and often had frothy growth that almost invariably backfired. It's hard to say that today. While banks will always be somewhat opaque, today they're returning capital rather than blowing it on acquisitions, and their "growth initiatives are the epitome of financial probity."
    • Oppenheimer's six large bank composite has on average churned out quarterly pretax earnings of $31.4B per quarter since 2013 (including $30.5B in Q1 this year, and $33.4B in Q2). That's a lot of money, especially since most of it is being used to buy back stock at less than 10x earnings and below tangible book value.
    • While lower-for-longer interest rates will continue to hamper earnings, banks are managing appropriately for the current environment, and the math of buying back stock below book will eventually win the day.
    • Favorite picks are Bank of America (NYSE:BAC), Citigroup (NYSE:C), and Goldman Sachs (NYSE:GS).
    • ETFs: KBE, KRE
    | Wed, Jul. 27, 11:49 AM | 20 Comments
  • Fri, Jul. 15, 2:55 PM
    • There aren't a whole lot of catalysts for bank stocks unless there's a sustained rise in the 10-year Treasury yield, says FBR's Paul Miller. "I'm going to be buying these things all day long," will be investors' attitude once yields do move higher.
    • Until then, one might have a look at those with high exposure to mortgages - Wells Fargo (NYSE:WFC), U.S. Bancorp (NYSE:USB), and PNC Financial (NYSE:PNC) - as they stand to benefit from the refinancing boom. This has risks as well as refi booms inevitably burn themselves out.
    • ETFs: XLF, KBE, KRE
    | Fri, Jul. 15, 2:55 PM | 20 Comments
  • Thu, Jul. 14, 2:43 PM
    • Moving past the overseas macro, today's modest rally is being led by the financial sector (XLF +1%), particularly the banks (KRE +1.8%), (KBE +1.8%) after JPMorgan beat estimates.
    • Also helping is another five basis points move upward in the 10-year Treasury yield to 1.53%. Among the yield-starved names applauding: Prudential (PRU +3.1%), Lincoln National (LNC +4.7%), E*Trade (ETFC +1.8%), Schwab (SCHW +1.9%), State Street (STT +2.5%), MetLife (MET +5.2%).
    • The Dow is up 0.8%, the S&P 500 0.55%, and the Nasdaq 0.6%.
    | Thu, Jul. 14, 2:43 PM | 6 Comments
  • Mon, Jul. 11, 3:40 PM
    • While nearly all major U.S. banks cruised through the stress tests last month, writes David Schawel, those exams are about determining if lenders have enough capital to get through a crisis, not whether they can earn the sort of risk-adjusted returns of the past.
    • On this front (for insurers as well as banks), there's plenty more for investors to worry about, he says, thanks to the vanishing spread between short rates (what the companies pay on their liabilities), and long rates (what they earn on their assets).
    • A new Fed study finds the adverse effect of weaker net interest margins is materially larger when rates are low. The reason: The lower bound of funding costs is zero as institutions are reticent to charge negative rates.
    • Investors interested in buying banks or insurers because of seemingly cheap valuations might want to look again. Bank multiples, says Schawel, typically move alongside ROE, and serious improvement in ROE is unlikely with rates remaining low.
    • Interested parties include: BAC, C, JPM, WFC, MET, PRU, LNC, PNC, USB, RF, KEY, KRE, KBE
    | Mon, Jul. 11, 3:40 PM | 135 Comments
  • Tue, Jul. 5, 4:17 PM
    • Interest rates continue to plummet, with U.S. government yields on the long end hitting new all-time lows. At least they remain positive (for now). Yields on French government paper are now negative all the way out to nine years, and Swiss 50-year bonds now sport yields below zero.
    • Some hawkish words today from San Francisco Fed President Williams weren't enough to lift the share prices of yield-starved financials (XLF -1.5%).
    • The SPDR KBW Bank ETF (KBE -3%), the SPDR KBW Regional Bank ETF (KRE -3%)
    • Citigroup (C -3.3%), Morgan Stanley (MS -3.5%), Regions Financial (RF -3.9%), Fifth Third (FITB -4.2%), Capital One (COF -3.3%), Legg Mason (LM -3.3%), E*Trade (ETFC -3.2%), Schwab (SCHW -3%), MetLife (MET -4.2%), Prudential (PRU -3.2%), Lincoln (LNC -4.5%)
    | Tue, Jul. 5, 4:17 PM | 6 Comments
  • Thu, Jun. 30, 10:51 AM
    • Dividend increases and boosted buybacks must already have been priced into the shares of the big banks, as share prices are showing little reaction to last night's capital plans.
    • Citigroup (C -0.6%) is notably lower despite announcing more than a tripling in the dividend. Bank of America (BAC -0.8%) was more cautious with its payout boost, but is faring about the same. JPMorgan (JPM unch) chose not to lift its dividend, but did raise the buyback. Morgan Stanley (MS +0.6%) lifted both. Wells Fargo (WFC -0.5%) didn't give details other than saying its capital plan was approved; same for Goldman Sachs (GS +0.1%).
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF, KBE
    | Thu, Jun. 30, 10:51 AM | 23 Comments
  • Mon, Jun. 27, 6:55 AM
    | Mon, Jun. 27, 6:55 AM | 62 Comments
  • Fri, Jun. 24, 11:58 AM
    • The Too Big To Fail lenders are naturally among the day's big losers following the U.K. vote to leave the EU, but losses in the financial sector are wide and deep as - among other things - interest rates look to be a lot lower for a lot longer.
    • Among asset managers, Invesco (IVZ -10.8%) - with a sizable U.K. exposure - is faring about the worst. WisdomTree (WETF -7.8%) takes a hit as the yen is the solo currency surging against the dollar, reducing demand for its popular hedged Japan ETF.
    • It's wait till next year (or even 2018 if you believe short-term rate futures markets) for rate hikes, meaning regional lenders can't celebrate their passing of the Fed stress tests last night. Regions (RF -7.8%), KeyCorp (KEY -6.4%), PNC Financial (PNC -5.5%), U.S. Bancorp (USB -4.2%), BB&T (BBT -5.1%).
    • Even lower rates put even more pressure on the business models of the life insurers: MetLife (MET -8.8%), Prudential (PRU -7.7%), Lincoln National (LNC -9.9%), Voya (VOYA -7%). Online brokers too: E*Trade (ETFC -9.4%), Schwab (SCHW -9.5%).
    • ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, KRS, WDRW, DPST
    | Fri, Jun. 24, 11:58 AM | 12 Comments
  • Fri, Jun. 24, 5:22 AM
    | Fri, Jun. 24, 5:22 AM | 129 Comments
  • Mon, Jun. 20, 3:17 PM
    • The deluge is set to start 30 minutes after the market closes on Thursday and will have to compete with Brexit exit polls for breathless news coverage.
    • As for the lenders, the Fed will first release the results from the annual stress tests and minute later the banks will disclose how they graded themselves. The results of the CCAR - at which banks' requests for capital returns will or won't be greenlighted - will come in one week later.
    • Investors will want to know if the Fed - feeling more comfortable with capital levels - will continue the trend of allowing gradual increases in payouts - they were at 75% of profits last year, and some are hoping for an increase to 80% this year.
    • Of course, even "A" grades on stress tests would likely more than counterbalanced by a "leave" vote coming from the U.K. If this weekend's polls are any indication, a decision to leave is looking less and less likely.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF, KBE, KRE
    | Mon, Jun. 20, 3:17 PM | 11 Comments
  • Fri, Jun. 17, 6:56 PM
    • SPDR Russell 2000 ETF (NYSEARCA:TWOK$0.2975. 30-Day Sec yield of 1.56%.
    • SPDR S&P 500 Buyback ETF (NYSEARCA:SPYB$0.1817. 30-Day Sec yield of 1.60%.
    • SPDR S&P 400 Mid Cap Growth ETF (NYSEARCA:MDYG$0.3426. 30-Day Sec yield of 1.11%.
    • SPDR Russell 2000 Low Vol ETF (NYSEARCA:SMLV$0.4980. 30-Day Sec yield of 2.72%.
    • SPDR Global Dow ETF (NYSEARCA:DGT$0.6700. 30-Day Sec yield of 2.59%.
    • SPDR S&P Bank ETF (NYSEARCA:KBE$0.1460. 30-Day Sec yield of 1.88%.
    • SPDR S&P Capital Markets ETF (NYSEARCA:KCE$0.2379. 30-Day Sec yield of 2.36%.
    • SPDR S&P Insurance ETF (NYSEARCA:KIE$0.2803. 30-Day Sec yield of 1.53%.
    • Payable June 27; for shareholders of record June 21; ex-div June 17. 30-Day Sec yield as of 6/16/16.
    | Fri, Jun. 17, 6:56 PM
  • Wed, Jun. 15, 3:17 PM
    • Having already shed value in June as expectations for rate hikes evaporated, the financial sector (XLF +0.7%) is showing relative strength following the FOMC's standing pat and dialing back expectations for the future level of the Fed Funds rate.
    • The S&P 500 is higher by just half the amount of the financials.
    • Within financials, the banks (KBE +1.1%), (KRE +1.1%) are particularly strong, led by Bank of America (BAC +1.5%), Morgan Stanley (MS +1.3%), Citigroup (C +1%), BB&T (BBT +1.2%), Fifth Third (FITB +2.2%), SunTrust (STI +1.4%), Zion (ZION +1.3%).
    | Wed, Jun. 15, 3:17 PM | 10 Comments
  • 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
    | Tue, Jun. 14, 3:48 PM | 89 Comments
  • Fri, Jun. 3, 9:47 AM
    • At the moment, it's looking like "wait till next year," for the higher interest rates much of the yield-starved financial sector has been waiting for. This morning's disappointing jobs numbers has traders quickly reversing bets on a rate hike this summer.
    • Meanwhile, the 10-year Treasury yield has crumbled to a two-month low of 1.70%.
    • The XLF is down 1.9%, leading the S&P 500's 0.5% decline. The SPDR KBW Bank ETF (KBE -3.5%), the SPDR Regional Banking ETF (KRE -3.4%).
    • Among the Too Big To Fail names, Bank of America (BAC -4.7%) and Citigroup (C -4.8%) are hardest hit. In regionals, Regions Financial (RF -4.4%), KeyCorp (KEY -4%), BB&T (BBT -3.3%), Fifth Third (FITB -4.4%).
    • State Street (STT -3.5%), Northern Trust (NTRS -3.8%), Schwab (SCHW -5.4%), E*Trade (ETFC -5.8%), Ameritrade (AMTD -5.5%), MetLife (MET -3.6%), Prudential (PRU -3.2%), Lincoln Financial (LNC -4.1%)
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, FNCL, SEF, FXO, KBWB, QABA, KBWR, RYF, FINU, KRU, RWW, XLFS, FINZ, KRS, JHMF, WDRW, FAZZ, DPST, FNCF
    | Fri, Jun. 3, 9:47 AM | 140 Comments
  • Tue, May 24, 10:22 AM
    • Stocks had already started the morning nicely in the green, but a blowout new home sales number for April has the homebuilders higher by about 2.5%, and the major indexes up by more than 1%.
    • It's also got traders upping bets on a June rate hike, with another move to follow before year-end. That's boosting the yield-starved financials (XLF +1.5%), particularly the banks (KBE +2%).
    • Among the financial movers: Bank of America (BAC +1.4%), JPMorgan (JPM +1.9%), Regions Financial (RF +1.8%), Fifth Third (FITB +2.1%), E*Trade (ETFC +2.9%), Interactive Brokers (IBKR +2.6%), MetLife (MET +1.8%), Prudential (PRU +2.2%), Lincoln National (LNC +1.8%), State Street (STT +2.1%)
    | Tue, May 24, 10:22 AM | 21 Comments
  • Fri, May 20, 12:11 PM
    • "The days of negative provisioning are pretty much dead," says D.A. Davidson's Kevin Reevey. "Now, they're going to have to take provisioning expense and build up reserves based on loan growth."
    • Total bank loan loss reserves were north of $250B in Q1 2010, before falling to about $24B at the end of last year. Amid the energy crash, they edged higher in Q1. Naturally, those lenders with the most exposure to energy posted some of the largest reserve increases in Q1. "It wasn't just the levels that [oil] went to, it was the speed at which prices dropped," says Peter Guilfoile, chief credit officer at one of those banks - Comerica (NYSE:CMA). Colorado-based National Bank Holdings (NYSE:NBHC) posted the largest Q/Q increase in reserves-to-loans, jumping 39 basis points to 1.43%.
    • Meanwhile, there were plenty of other banks which actually saw declines in that ratio, notably Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and U.S. Bancorp (NYSE:USB). These and other lenders in that bucket can thank denominator of that ratio growing quickly enough to offset reserve builds.
    • Source: SNL Financial's Zach Fox and Venkatesh Iyer
    • ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, FNCL, SEF, FXO, KBWB, QABA, KBWR, RYF, FINU, KRU, RWW, XLFS, FINZ, KRS, WDRW, DPST, FAZZ
    | Fri, May 20, 12:11 PM | 15 Comments
KBE Description
The SPDR® S&P® Bank ETF, before expenses, seeks to closely match the returns and characteristics of the S&P® Banks Select Industry Index (ticker: SPSIBK). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
See more details on sponsor's website
Sector: Financial
Country: United States
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