Thu, Oct. 20, 6:45 PM
- Morgan Stanley (NYSE:MS) stands to collect $120M if Bayer (OTCPK:BAYRY) closes its $57B takeover deal for Monsanto (NYSE:MON), which would be the second-largest deal fee for a single bank on record.
- The big payout is a bright spot in an otherwise down year for M&A activity, as global deal volume YTD currently stands at ~$2.6T, 24% lower than the same period in 2015.
- The payments were disclosed in a MON proxy filing, which also showed the company held takeover talks with three other groups - identified by Financial Times as BASF (OTCQX:BASFY), Koch Industries and China's Sinochem - before agreeing to the pending deal with Bayer.
Thu, Oct. 20, 9:14 AM
- Guggenheim is going with the hot hand, upgrading Morgan Stanley (NYSE:MS) to Buy while downgrading Goldman Sachs (NYSE:GS) to Neutral.
- Morgan is higher by 3.5% YTD, while Goldman is lower by 3.1%, but the difference is far more stark since the Feb. 11 bottom, with MS up 45% and GS ahead just 18.6%.
- On Morgan Stanley, Guggenheim analyst Eric Wasserstrom likes the improved revenue mix and asset composition, and says it's likely to benefit the bank's future stress test and CCAR results, allowing greater capital returns. His $39 price target is 18% above yesterday's close.
- As for Goldman, Wasserstrom takes note of declining M&A volumes following a jump to $4.1T in 2015. He sees volume of just $3.5T this year, and the same for 2017 and 2018. Further, operating leverage has been negative year-to-date, and the stock's valuation has already priced in the bank's expense control initiatives.
- Both stocks are modestly lower premarket alongside a decline in U.S. stock index futures.
Wed, Oct. 19, 7:15 AM
- Given what's been observed out of the other big banks, Morgan Stanley's (NYSE:MS) easy earnings beat this morning should come as no surprise, and the only question now will be how the stock reacts today given that solid results were likely already priced in.
- Turning to the numbers, net income of $1.6B or $0.81 per share compared to $1B and $0.48 a year ago, or $740M and $0.34, excluding DVA.
- Compensation rose alongside revenue - $4.1B in Q3 vs. $3.4B in Q3 one year ago. Non-comp expenses fell to $2.4B from $2.9B thanks to lower litigation costs, and execution on expense management initiatives.
- Annualized ROE in Q3 clocked in at 8.7%, with CET1 ratio of 15.9%.
- Institutional Securities pretax income of $1.4B more than doubled from a year ago, with fixed income revenue of $1.5B up from $583M. Equity revenue edged higher to $1.9B, and advisory revenue dipped to $504M from $557M.
- Wealth Management pretax income of $901M vs. $824M a year ago.
- Previously: Morgan Stanley beats by $0.18, beats on revenue (Oct. 19)
- MS initially gained 2% on the earnings beat news, but is up just 0.1% premarket at the moment.
Wed, Oct. 19, 6:56 AM
Tue, Oct. 18, 5:30 PM
Fri, Oct. 14, 9:42 AM
- JPMorgan and Citigroup both easily topped estimates thanks to a big rebound in previously-in-the-doldrums markets revenue. JPM is higher by 1%, and Citi by 2%. The read-through is pushing Goldman Sachs (GS +3%), Morgan Stanley (MS +2.7%) and Bank of America (BAC +2.4%) all nicely higher.
- Less capital-markets focused, Wells Fargo also beat forecasts, but not as soundly. As usual of late, it's lagging its TBTF peers, up just 0.3%.
- XLF +1.2%, KRE +1.4%, KBE +1.5%.
- Other individual names: Regions Financial (RF +2.5%), Huntington Bancshares (HBAN +2.1%), KeyCorp (KEY +1.9%), Fifth Third (FITB +1.5%), SunTrust (STI +1.3%), M&T (MTB +1.7%)
Fri, Oct. 7, 5:50 PM
- CBS (CBS -1.8%) and Viacom (VIA -0.9%, VIAB -1%) are "bankering up" as they consider whether to get back together, a decade after they split apart.
- The special committee at Viacom formed to consider a merger has hired Morgan Stanley (NYSE:MS) to help in its exploration of the process, The Wall Street Journal reports. Meanwhile, the committee at CBS has retained Lazard as financial adviser and hired Morton Pierce, of White & Case, as legal counsel.
- Viacom plans to hire another financial adviser as well, sources told the WSJ.
- It will be tricky to establish valuation for such a deal, with Viacom struggling and CBS thriving. (VIAB is down 18.2% over the past year; CBS is up 37% in that period.) But putting together what would be the year's biggest media deal -- the two have a combined market cap of about $40B -- could mean a bonanza of work for advisers like Morgan Stanley, which advised Viacom last month on its capital review.
- After hours action: CBS +0.3%; VIAB flat.
Thu, Oct. 6, 5:02 PM
- Looking to comply Washington's so-called fiduciary rule, Merrill Lynch (NYSE:BAC) tells its more than 14K-strong thundering herd that after April 10, investors with retirement accounts will no longer have the option of paying commissions, but will instead have to pay a fee based on their assets.
- Merrill is the first brokerage to eliminate the commission-option for clients, but it may be paving the way for rivals like Morgan Stanley (NYSE:MS) and Wells Fargo (NYSE:WFC) to do the same.
- LPL Financial (NASDAQ:LPLA) has said it will still offer some sort of commission-based option to retirement savers.
- Source: Michael Wursthorn in the WSJ
Thu, Oct. 6, 12:51 PM
- After a 28% move higher for Morgan Stanley (NYSE:MS) over the past three months, Sandler O'Neill downgrades to Neutral from Buy.
- Though still "constructive" on the capital markets-related revenue outlook, the team has a hard time seeing a lot of additional upside for the stock from these levels. They also note Morgan is trading for a 10% premium to its average P/E multiple, not to mention a 1.1x multiple premium to Goldman Sachs.
- MS is down 0.8% on the session.
- The same team also put out a valuation-related downgrade of JPMorgan today.
Wed, Oct. 5, 3:27 PM
- The continued rise in interest rates - the 10-year yield today breaching 1.70% - is giving additional fuel to the financial sector rally.
- The XLF's 1.7% advance today puts it in a tie with the energy sector's XLE. The S&P 500 is up just 0.45%.
- Banks, insurers, and brokers are all sharply ahead as investors envision the return of spread income. Even Wells Fargo (WFC +2.8%) is in the green - it's in fact atop the TBTF movers.
- Other gainers: Goldman Sachs (GS +2.4%), Morgan Stanley (MS +1.7%), U.S. Bancorp (USB +2.1%), SunTrust (STI +2.5%), PNC Financial (PNC +1.3%), E*Trade (ETFC +2.1%), Voya Financial (VOYA +4.7%), Lincoln National (LNC +2.4%).
Mon, Oct. 3, 9:04 AM
- September monthly performance was: +0.5%
- 52-week performance vs. the S&P 500 is: -3%
- $0.04 in dividends were paid in September
- 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%
Fri, Sep. 30, 11:37 AM
- The ADRs of Deutsche Bank are higher by 15% on a report it's near settling U.S. mortgage-related charges for just $5.4B (versus the $14B which had previously been floated).
- The move has lifted Europe out of the red, led by Germany's (NYSEARCA:EWG) 1% gain. The Dow's (NYSEARCA:DIA) 1% advance is leading the U.S. averages higher.
- Bank of America (BAC +3.1%), Citigroup (C +3.2%), JPMorgan (JPM +1.7%), Wells Fargo (WFC +0.7%), Goldman Sachs (GS +1.7%), Morgan Stanley (MS +2.9%). XLF +1.5%
Thu, Sep. 29, 3:35 PM
- Deutsche Bank's (DB -6.5%) steep tumble has stabilized a bit over the past couple of hours, but DoubleLine bond guru Jeffrey Gundlach says it's got a ways left to go and to stay away.
- The company is hard to analyze and the prospect of a government bailout, he tells Reuters. The market sell-off "doesn't feel like" it's over by any means.
- "The market is going to push down Deutsche Bank until there is some recognition of support," he says.
- Elsewhere in sliding financials today: BAC -1.1%; C -2.1%; JPM -1.4%; GS -2.7%; MS -2.2%; OTCPK:SCGLY -3.8%.
Thu, Sep. 29, 1:30 PM
- A report that a number of hedge funds are bailing out of their Deutsche Bank exposure has sent that stock sharply lower in the last few minutes, and the move is dragging the big U.S. banks, and in turn, the major averages.
- Deutsche is now lower by more than 7%. Bank of America (BAC -1.2%), Citigroup (C -1.6%), JPMorgan (JPM -1.2%), Goldman Sachs (GS -2.1%), Morgan Stanley (MS -1.9%). The KBE and KRE are each off 1.1%.
- The Dow (DIA -0.9%), S&P 500 (SPY -0.8%), and Nasdaq (QQQ -0.6%).
Wed, Sep. 28, 9:32 AM
- "Large banks are going to be forced to take on more capital," says Dick Bove. "It will make the cost of funding more, not less, expensive. It will reduce the appeal for investors to put money at risk in the banking system."
- Bove is commenting on a weekend announcement from Fed Governor Daniel Tarullo promising future stress tests will be geared to demanding even higher cash buffers for banks. Set to take effect next year, the new rule could raise capital requirements for the largest banks by 3 or 4 percentage points, writes Jeff Cox at CNBC.
- Interested parties: BAC, C, WFC, JPM, GS, MS
- There's good news though, as those lenders with less than $250B in assets won't be subject to the same standards. FBR's Edward Mills calls it a "significant positive" for regionals, which now have more certainly on the process, reduced regulatory expenses, and thus the ability to return more capital to owners.
- Interested parties: RF, ZION, CMA, KEY, FITB, STI, NYCB, HBAN, PNC, BBT, MTB
- ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, PSCF, KRS, WDRW, DPST
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