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%)
Thu, Feb. 11, 12:51 PM
- At the moment it's yet again looking like "wait till next year," for the sustained rise in interest rates the life insurers need to be able to earn some real money.
- Last night it was Prudential Financial (PRU -10.1%) joining MetLife (MET -4.7%) and Lincoln Financial (LNC -9.2%) in reporting a disappointing Q4, with investment results contributing $105M less this year that they did in Q4 of 2014.
- While still upbeat on the economic outlook, Janet Yellen is spending an uncomfortable amount of time in her Congressional testimony talking about negative interest rates, and a chart of Google searches for "negative interest rates" is through the roof.
- Manulife (MFC -10.3%), Sun Life (SLF -3%), Primerica (PRI -3.7%), Voya Financial (VOYA -4.6%)
- The 10-year Treasury yield is lower by 10 basis points to 1.6%, and short-term rate futures have begun pricing in a rate cut by the Fed.
Nov. 12, 2015, 10:13 AM
- “Net income was negatively impacted by investment experience, principally oil and gas valuation changes, as well as the charges associated with our annual actuarial review," says CEO Donald Guloien, as the company missed C$0.46 per share estimates by $0.03.
- Manulife (MFC -2.8%) took a C$220M Q3 charge for oil and gas investments versus a C$370M gain booked one year ago. The company has C$13.4B in energy debt paper and private placement debt, up from C$11.7B a year earlier. "We remain committed to this sector and it is our view that oil prices are currently below the economic level required to meet demand on a long-term basis," says CIO Warren Thomson.
- Core earnings - which strips out the impact of interest rates and investments - of C$870M rose 15% from a year ago.
- Previously: Manulife Financial misses by C$0.03, misses on revenue (Nov. 12)
Sep. 21, 2015, 3:02 PM
Feb. 12, 2015, 11:03 AM
- Q4 core earnings (all Canadian dollars) of $713M or $0.36 per share vs. $685M and $0.35 one year ago, but fell short of estimates for $0.42. Core ROE of 9%.
- CEO Donald Guloien: "Core earnings, due to a variety of experience factors, were below our plan. Also, the macro environment, including low interest rates, produces headwinds for 2015."
- Canadian insurance sales up 6%, with wealth sales down 8%. U.S. insurance sales rose 12%, with wealth sales flat.
- AUM of $691B vs. $599B a year ago.
- Previously: Manulife Financial misses by C$0.06 (Feb. 12)
- MFC -3.2%
Jan. 6, 2015, 3:30 PM
- It's been a rough start to the year for the group as investors - who had bid up the names at least partly in hope of higher interest rates giving a boost to returns - rethink those assumptions yet again as the 10-year Treasury yield tumbles below 2%.
- MetLife (MET -2.5%), Prudential (PRU -1.5%), Manulife (MFC -2.2%), Sun Life (SLF -3.2%), Lincoln National (LNC -2.8%), Primerica (PRI -1.5%), Voya Financial (VOYA -2.1%).
Mar. 20, 2014, 10:54 AM
- Much of the financial sector is lit up bright green, continuing to outperform following yesterday's suggestion by the FOMC and Janet Yellen that rate hikes could come sooner than expected. XLF +1.1%, KBE +1.6%, KRE +1.6%.
- At new 52-week or even multi-year highs are JPMorgan (JPM +2.3%), Wells Fargo (WFC +1.7%), Morgan Stanley (MS +1.4%), and Bank of America (BAC +1.6%).
- Regional lenders: U.S. Bancorp (USB +1%), Huntington (HBAN +1.5%), PNC (PNC +1.3%), BB&T (BBT +1.5%), Fifth Third (FITB +1.8%), First Niagara (FNFG +2.1%).
- Leading among the life insurers are Lincoln National (LNC +1.9%), Protective Life (PL +1.6%), Manulife (MFC +1.2%), and Sun Life (SLF +1.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KBWI, KBWP, KRS, FINZ
Sep. 19, 2013, 10:51 AM
- Life insurers continue to slide following yesterday's non-taper as investors face the prospect of interest rates maybe not rising as quickly as hoped.
- Mike Newton reminds: Sunlife (SLF -1.6%) disclosed in its recent quarterly report a 100 basis point move higher in rates would boost EPS BY $0.23 per share; for Manulife (MFC -2.6%) it's $0.16.
- MetLife (MET -2.4%), Prudential (PRU -1.4%), Hartford (HIG -1.7%), ING U.S. (VOYA -3.7%), Lincoln National (LNC -4.5%).
- ETFs of interest: KIE, IAK, KBWP, KBWI.
Jul. 5, 2013, 10:02 AM
A number of life insurers are at (or very near) new 52-week highs thanks to today's sharp rise in interest rates which should allow investment at something closer to what's needed to meet their obligations. MetLife (MET +1.8%), Prudential (PRU +1.2%), Hartford (HIG +2.1%), Lincoln National (LNC +3.3%), Manulife (MFC +0.8%).| Jul. 5, 2013, 10:02 AM
Jun. 20, 2013, 10:07 AM
What's outperforming this morning? Life insurers for one, with Manulife (MFC +2%) leading the way after an upgrade. These companies have a near-impossible time of meeting their investment bogies with long-term yields so low, so the 10-year close to 2.5% works better than 2.2% a day ago and 1.7% weeks ago. MetLife (MET +1.1%), Prudential (PRU -0.1%), Hartford (HIG unchanged), Sun Life (SLF +0.8%), Lincoln National (LNC +0.1%).| Jun. 20, 2013, 10:07 AM
Jun. 7, 2013, 11:37 AM
Among the strongest performers in a strong market are insurers - particularly life insurers - on hope of a sustained rise in interest rates allowing better income on their investments (current holdings tend to be hedged meaning no losses). MetLife (MET +2%), Prudential (PRU +3%), Hartford (HIG +2.3%), Genworth (GNW +3.3%), Manulife (MFC +1.9%), Lincoln National (LNC +2.8%) Sun Life (SLF +1.4%), ING US (VOYA +2.8%). Insurer ETFs: KIE, though it is more exposed to P&C, IAK, KBWI, KBWP, though totally P&C focused.| Jun. 7, 2013, 11:37 AM | 1 Comment
Feb. 10, 2012, 4:29 PM
Oct. 17, 2011, 5:05 PMSun Life (SLF -10%), Canada's 3rd largest insurer, plunged after warning weak markets would cause a $621M Q3 loss, and took other Canadian insurers - including Manulife MFC -5.6% - with it. The companies are getting hit by a lethal combination of weak equity markets and nearly invisible bond yields. | Oct. 17, 2011, 5:05 PM | 2 Comments