Mon, Dec. 5, 12:40 PM
- The FRBNY's William Dudley isn't concerned about the post-election jump in rates at the long end of the curve, and says the Fed is about to start following suit at the short end.
- Even the dovish Charles Evans from the Chicago Fed admits inflation is getting closer to the central bank's target, and the labor market is close to full employment.
- The 10-year Treasury yield had moved as high as 2.45%, but has pulled back to 2.40%, still up 1.5 basis points on the session.
- On the regulatory front, Fed Governor Daniel Tarullo on Friday set himself up as the chief defender of the current bank regulatory regime, but whether his voice will be heard is a different story given the incoming administration, which looks to be staffed with those favoring a far lighter regulatory hand.
- Financial sector stocks today are about doubling the S&P 500's 0.5% advance.
- TBTF banks: Bank of America (BAC +2.3%), Citigroup (C +1.8%), JPMorgan (JPM +1.3%), Wells Fargo (WFC +0.9%), Goldman Sachs (GS +1.7%), Morgan Stanley (MS +0.4%)
- Regional lenders: U.S. Bancorp (USB +0.7%), PNC Financial (PNC +0.4%), KeyCorp (KEY -0.8%), Fifth Third (FITB +0.5%)
- Insurers: MetLife (MET +0.3%), Lincoln National (LNC), AIG (AIG +0.2%)
- Brokerage: Schwab (SCHW +0.9%), E*Trade (ETFC +0.9%)
- Custodial banks: State Street (STT +0.5%), Northern Trust (NTRS +1%)
- Private equity: Blackstone (BX +0.9%), KKR (KKR +1%)
- Asset Management: BlackRock (BLK +0.1%), Franklin Resources (BEN +0.5%), Affiliated Managers (AMG +1.8%)
Mon, Dec. 5, 7:49 AM
- Morgan Stanley (NYSE:MS) CEO James Gorman sold 100K shares of company stock last week for $41.38 each. According to Bloomberg, it's the first time he's ever sold shares in the bank he runs.
- He still owns more than 1.2M shares.
- The sale comes following a powerful rally that's taken the stock to its highest level since 2008.
Fri, Dec. 2, 11:51 AM
- The financial sector is taking a breather from its staggering post-election run, with a post-jobs report dip in rates a good enough excuse for satiated bulls to cash in some chips.
- XLF -1%, KBE -0.7%, KRE -0.7%.
- Individual issues: Bank of America (BAC -1.8%), Morgan Stanley (MS -1.2%), Citigroup (C -1.9%), M&T (MTB -1.1%), Flagstar (FBC -1.7%), Fifth Third (FITB -1.6%), PNC Financial (PNC -1.4%), Prudential (PRU -1.1%), Lincoln National (LNC -1.9%), Schwab (SCHW -2.1%), State Street (STT -1.8%)
- No longer part of the financial sector as far as the GICS classification, REITs are enjoying the respite in rates. IYR +1.6%, VNQ +1.6%
- Realty Income (O +4.1%), Vereit (VER +3%), Omega Healthcare (OHI +3.2%), Welltower (HCN +3.5%), HCP (HCP +2.7%), Universal Health (UHT +4.4%), W.P. Carey (WPC +2%), Lexington Realty (LXP +2.5%), Essex Property (ESS +1.2%), Aimco (AIV +1.5%), General Growth (GGP +2.6%), Brixmor (BRX +1.6%), Federal Realty (FRT +1.8%), Kimco (KIM +1.2%), Public Storage (PSA +1.4%), Life Storage (LSI +1.4%), Boston Properties (BXP +1.2%), Stag Industrial (STAG +2.4%).
Thu, Dec. 1, 8:46 AM
- November monthly performance was: +5.59%
- 52-week performance vs. the S&P 500 is: 0%
- No dividends were paid in November
- Top 10 Holdings as of 9/30/2016: JPMorgan Chase & Co (JPM): 3.11216%, Citigroup Inc (C): 2.91346%, US Treasury Note 1.125%, US Treasury Note 0.5%, Bank of America Corporation (BAC): 2.04729%, Morgan Stanley (MS): 1.65388%, Apache Corp (APA): 1.61818%, Merck & Co Inc (MRK): 1.45989%, US Treasury Note 0.75%, Devon Energy Corp (DVN): 1.39074%
Wed, Nov. 30, 11:45 AM
- While the pick of ex-Goldmanite and Hollywood player Steven Mnuchin for Treasury Secretary can hardly be called "draining the swamp," Pantheon's Ian Shepherdson says it should make Wall Street happy.
- In his first public comments after being selected, Mnuchin promised to "kill" swaths of Dodd-Frank.
- Also making Wall Street (and other bankers/insurers/brokers) happy today is another big move higher in interest rates, with the 10-year Treasury yield up 10 basis points to 2.394%.
- The S&P 500 is just marginally higher, but the KBE is ahead 1.9%, and the KRE 2%. XLF +1.35%
- Bank of America (BAC +3.4%), Citigroup (C +1.9%), JPMorgan (JPM +1.5%), Wells Fargo (WFC +1.8%), Morgan Stanley (MS +2.1%), Goldman Sachs (GS +3.9%), U.S. Bancorp (USB +1%), PNC Financial (PNC +1.4%), KeyCorp (KEY +2.2%), Fifth Third (FITB +2.5%), Regions Financial (RF +2.9%), BB&T (BBT +2.4%), SunTrust (STI +2%)
- MetLife (MET +2%), AIG (AIG +0.8%), Lincoln National (LNC +1.7%), Prudential (PRU +1.1%), Hartford (HIG +1.3%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF
Mon, Nov. 21, 5:53 AM
- U.S. lenders appear to present a bigger risk to the financial system than last year.
- Citigroup (NYSE:C), BofA (NYSE:BAC) and Wells Fargo (NYSE:WFC) all face higher capital surcharges after they rose in the Financial Stability Board's latest ranking of the most systemically important banks in the world, while HSBC, Barclays (NYSE:BCS) and Morgan Stanley (NYSE:MS) saw their buffer levels fall.
Fri, Nov. 18, 8:25 AM
- Analyst Jame Fotheringham takes advantage of the big post-election rally in Wells Fargo (NYSE:WFC), CIT Group (NYSE:CIT) and World Acceptance (NASDAQ:WRLD) to downgrade each to Underperform from Market Perform. Regional Management (NYSE:RM) is downgraded as well, to Market Perform from Outperform.
- He notes there's still value in names like Capital One (NYSE:COF), Morgan Stanley (NYSE:MS), and Ally Financial (NYSE:ALLY), even though they too have had strong moves.
Wed, Nov. 9, 4:19 AM
- Donald Trump's victory throws into question the core assumption the Fed will raise interest rates soon and follow with further gradual hikes over coming years.
- Banks are struggling on the news. Fed Funds futures are now pricing in less than a 50% chance of a December move and the ECB is likely to interpret the uncertainty with stimulus and lower rates for longer.
- Premarket movement: GS -8.3%, WFC -3.5%, C -3.2%, BAC -2.4%, CS -2.3% JPM -2.2%, LYG -1.8%, HSBC -1.7%, USB -1.4%, BCS -1.5%, ING -0.6%, MS, DB, RBS, UBS
Tue, Nov. 8, 8:29 AM
- JPMorgan (NYSE:JPM) and Deutsche Bank (NYSE:DB) both passed on selling shares of Uber (Private:UBER) to their high-net worth clients because the ride-share company wasn't willing to provide financial details about its business.
- The banks were concerned they wouldn't be able to sell the shares given the lack of specifics, according to Bloomberg.
- Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) ended up selling the shares earlier this year through their own wealth management units.
Sun, Nov. 6, 4:41 PM
- China is considering allowing Wall Street banks to run their own investment-banking businesses on the mainland, dropping a requirement for U.S. banks to operate as minority partners in local joint ventures, WSJ says.
- Doing so would give them more access to Chinese domestic markets that have been hard to crack.
- Any deal would likely ultimately to extend to all foreign banks, not just U.S. firms.
- Foreign investment banks have less than a 5% market share in investment banking, trading and other securities businesses in China's $7.5T market.
- Stocks potentially affected: GS, JPM, MS, C
Thu, Nov. 3, 7:51 AM
- October monthly performance was: -0.39%
- 52-week performance vs. the S&P 500 is: +11%
- No dividends were paid in October
- 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%
Thu, Oct. 27, 1:21 PM
Wed, Oct. 26, 3:58 PM
- Morgan Stanley (NYSE:MS) CEO James Gorman tells Bloomberg he loves the financial ecosystem of London, but Brexit means a move for some employees and families from the city as well as a possible relocation of the bank's European HQ from Canary Wharf.
- Currently about 5K employees are based in that office.
- Gorman's comments suggest Morgan Stanley doesn't feel the EU will let the U.K. keeps its coveted bank passporting rights post-Brexit, i.e. rights for financial institutions to sell services across the EU.
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.