Thu, Jul. 14, 8:19 AM
- Among the items boosting the quarter was a big rebound in markets revenue (which includes FICC) - up 23% Y/Y to $5.56B. The bank had previously unofficially guided to more than a 10% gain in trading revenue.
- Jamie Dimon has previously said that the myriad legal and regulatory issues pressuring the bank were beginning to dissipate, and this quarter JPMorgan reported a legal benefit of $430M vs. $291M of expenses a year ago.
- Energy? JPMorgan's Corporate & Investment bank booked a $235M credit loss vs. $50M a year ago, though $185M of that loss came from one customer. The commercial bank had a reserve release of $25M vs. needing to add $304M in Q1.
- Citigroup (NYSE:C) +2.6%, Bank of America (NYSE:BAC) +2.1%, Goldman Sachs (NYSE:GS) +2.25%, Morgan Stanley (NYSE:MS) +1.8%, Wells Fargo (NYSE:WFC) +1.4% premarket
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%)
Wed, Jun. 29, 4:41 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%).
Mon, Apr. 18, 5:40 PM
Mon, Apr. 18, 9:43 AM
- If CEO James Gorman really wants to turn Morgan Stanley (MS -0.3%) into another Merrill Lynch, it's working. FICC revenue fell all the way to $873M in Q1 from $1.9B a year ago - that's roughly 50% vs. drops in just the teens percentage-wise for JPMorgan, Citigroup, and Bank of America.
- During the earnings call, management a number of times emphasized the "backdrop" as behind the weak quarter, along with their expectation that this will not continue. The improvement at this point though, seems quite limited. Corporate bond trading, they say, has seen "modest improvement," and trading remains below where management would like to see it.
- CFO Jonathan Pruzan says the M&A pipeline is healthy, but the deal pace won't match that of 2015's blowout year. As for the near-dead IPO market, Gorman says he's seeing "green shoots."
- Credit Suisse says the expense control and low expectations were behind Q1's beat, and expects a positive day for the stock. Going forward, macro stability and increased risk appetite will be necessary for sustained price gains. It keeps a Neutral rating and $25 price target.
- Citi agrees on the expense control theme, but says the company has little flexibility on this front for the remainder of the year.
- WSJ blog
- Now read: Shrugging Atlas (April 17)
Wed, Apr. 13, 11:31 AM
- JPMorgan's revenues and profits both fell from a year ago, but the lame performance of the banks thus far this year has already priced in a weak quarter. JPMorgan is higher by 3.8%, with Citigroup (C +4.7%), Bank of America (BAC +3.5%), Wells Fargo (WFC +1.7%), Goldman Sachs (GS +2.9%), and Morgan Stanley (MS +4.4%) joining the party. The XLF is higher by 1.75% vs. the S&P 500's 0.7% advance.
- But what about all of these players (except for Citi) having their living wills rejected by the Fed, FDIC, or both? A sideshow, no doubt. Regulators are going to regulate - like the commercial goes, "It's what they do." Banks will tweak plans, numbers, or whatever they need to in order to get D.C. to eventually sign off.
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, IYG, FNCL, SEF, FXO, RYF, KCE, FINU, RWW, XLFS, FINZ, FAZZ
Thu, Mar. 24, 10:43 AM
- Oil's lower by 2.9% today and about 10% for the week, but it's the financial sector (XLF -1.3%) leading the S&P 500's 0.5% decline today. This even as Jim Bullard becomes the latest Fed speaker to more or less disavow last week's dovish FOMC meeting result, and suggest higher rates could come as soon as April's get-together.
- Morgan Stanley (MS -2.9%), Citigroup (C -2.5%), BB&T (BBT -1.3%), U.S. Bancorp (USB -1.3%), MetLife (MET -2.8%), Prudential (PRU -3.5%)
- ETFs: XLF, FAS, FAZ, KRE, UYG, VFH, KBE, IYF, BTO, IAT, IYG, SEF, FNCL, FXO, KBWB, QABA, RYF, FINU, KBWR, KRU, RWW, FINZ, KRS, XLFS
Wed, Mar. 16, 2:28 PM
- Rallying hard for the last few weeks alongside the markets and hope for a faster pace of rate hikes, the financials (XLF -0.4%) are the worst-performing sector in the minutes after the FOMC's dovish statement and economic/rate projections.
- Bank of America (BAC -2.6%), Morgan Stanley (MS -1.9%), Wells Fargo (WFC -0.9%), Citigroup (C -1.4%), Regions (RF -1.7%), PNC (PNC -1.2%), Fifth Third (FITB -1.9%), Schwab (SCHW -2.5%), MetLife (MET -0.4%)
- Previously: Stocks, bonds, gold gain, dollar slides, following Fed (March 16)
- Previously: Fed bows to markets (March 16)
- Previously: Fed stays on hold, sees just two rate hikes this year (March 16)
Tue, Feb. 16, 7:26 AM
- Both Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) win upgrades to Overweight from Neutral from JPMorgan. Morgan Stanley's new price target of $29 is about 25% above Friday's close and Goldman's price target of $180 represents 23% upside.
- Morgan was a $40 stock late last summer, and Goldman topped out a little earlier at nearly $220.
- Both names are higher in the area of 2% premarket.
- See also: JPMorgan throws in the towel on Credit Suisse (Feb. 16)
Fri, Feb. 12, 6:58 PM
- In today's 13F filing, Daniel Loeb and his Third Point hedge fund indicated they took a new Q4 position of 3M shares in Morgan Stanley (NYSE:MS) -- stock that rose 6.4% today, but is down 27.4% YTD.
- Third Point raised its stake in Allergan (AGN +1.9%) by 47%, to 5.4M shares, and in Dow Chemical (DOW +2%) by 7%, to 25.2M shares.
- Another new position is in Axalta Coating Systems (AXTA -0.3%): 2.4M shares.
- Reuters notes that it saw a Loeb letter where he acknowledged that along with cutting stakes in companies exposed to China and commodity prices, Third Point raised its short positions to defend itself against tumbling markets.
- "A renewed focus on generating alpha on both sides of the portfolio has led us to increase single-name equity shorts by four-fold over the past year," Loeb wrote. "Our total equity short exposure is nearly $4.5 billion today."
Wed, Feb. 3, 10:25 AM
- This just in: The financial sector is having a worse go it this year than energy, with the XLF lower by 13.6% YTD vs. the XLE's 9% decline.
- Leading a big reversal from this morning higher open is the XLF's 2% decline. The S&P 500 is now off 1%, and the XLE "just" 0.85%.
- Among the issues for the financials are two items: 1) Hopes for a sustained rate hike cycle have been dashed, with the 10-year yield tumbling all the way to 1.82% currently from about 2.30% when the Fed hiked in mid-December. Fed speakers are all-of-a-sudden sounding very dovish (Dudley is the latest), and short-term rate futures are now pricing in just a 50% chance of even one Fed rate increase this year; 2) For lenders specifically, there's worry over their exposure to the crashing energy sector. No doubt better capitalized today than 10 years ago, losses are still losses even if they don't threaten the viability of the bank.
- JPMorgan (JPM -2.6%), Wells Fargo (WFC -3.6%), Morgan Stanley (MS -3.5%), KeyCorp (KEY -3.1%), PNC Financial (PNC -2%), Comerica (CMA -2.7%), Schwab (SCHW -3.8%), MetLife (MET -2.5%)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, FINU, QABA, KRU, KBWR, RWW, RYF, PSCF, FINZ, KRS, XLFS
Tue, Jan. 19, 9:36 AM
- The bank achieved a 7% return on equity in 2015 - three hundred basis points below target. The path to target? Among the steps is return of capital - Morgan Stanley's (MS +2%) CET 1 ratio of 14.1% at year-end compares to the 10% required by 2019. Its supplementary leverage ratio of 5.8% compares to 5% required in 2018.
- Also helping will be the bank's major cuts in FICC. Wanting to bring RWA to under $180B by year-end, Morgan cut it to $136B. The new target is under $110B at some point after 2017.
- Then there's expense reductions, and the next phase (2016-17) is named Project Streamline. Ex-DVA, the bank's efficiency ratio fell to 77% in 2015, and $1B in planned cuts should bring that number down to 74% by 2017 (assuming just flat revenues).
- Strategic Update
- Previously: Morgan Stanley on the move after earnings beat (Jan. 19)
Tue, Jan. 19, 7:52 AM
- Q4 net income (after DVA) of $9986M vs. a loss of $1.775B a year ago (last year's result included - among other one-time items - a $2.9B after-tax litigation charge).
- Institutional Securities pretax income (after DVA) of $672M on revenue of $3.419B (vs. $3.43B a year ago). Advisory revenue of $516M vs. $488M year ago. Equity sales and trading net revenue of $1.8B vs. $1.6B. FICC revenue of $550M down from $599M. Excluding adjustments, compensation expense of $1.2B fell from $1.5B.
- Wealth Management pretax income of $768M up from $736M a year ago. Pretax margin of 20%, or 21% excluding severance costs. Asset management fee revenue of $2.1B flat from a year ago. Transactional revenues of $861M down from $976M. Net interest income of $779M up from $625M. Loans of $64B up from $51B.
- Previously: Morgan Stanley beats by $0.10, beats on revenue (Jan. 19)
- MS +3.3% premarket
Wed, Jan. 13, 1:14 PM
- It wasn't supposed to be this way after the Fed embarked on a rate hike cycle as these yield-starved names could finally look forward to earning a better spread on their money.
- Since the Fed hiked last month, however, the long bond yield has tumbled about 20 basis points, further narrowing the yield curve.
- With today's 1.3% decline, the XLF is lower by 7.6% YTD, about 200 basis points worse than the S&P 500 (but about 250 basis points better than the energy sector).
- TBTFs: Morgan Stanley (MS -3.9%), Goldman Sachs (GS -2.3%), Citigroup (C -1.8%)
- Regionals: U.S. Bancorp (USB -2%), Regions Financial (RF -3.4%), New York Community Bancorp (NYCB -2.2%)
- Mortgage-related names like Ocwen (OCN -6.2%), Nationstar (NSM -5.3%), Walter Investment (WAC -13.9%), and New Residential (NRZ -5.3%) have come in for particular punishment this day and this year. The mortgage REITs too: Hatteras Financial (HTS -4.4%), Western Asset (WMC -3.6%), New York Mortgage (NYMT -2.3%), Five Oaks (OAKS -5.2%), PennyMac (PMT -2.6%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ, XLFS
Wed, Jan. 6, 5:04 PM
- Morgan Stanley (MS -2.5%) is naming Colm Kelleher its new president, CEO James Gorman disclosed in a staff memo.
- That promotion, to become Gorman's top lieutenant, means that Gregory Fleming, who headed wealth management for the firm, is electing to leave the company to pursue other interests.
- Fleming, who was Morgan Stanley's president, was considered a rising star and Gorman's heir apparent by many sources.
- Kelleher reportedly passed Fleming last year as the bank's second-highest paid employee, after a $2M bonus.
Morgan Stanley is a global financial services firm which, through its subsidiaries and affiliates, provides investment banking products and services to its clients and customers including corporations, governments, financial institutions, and individuals. It operates through the following... More
Industry: Investment Brokerage - National
Country: United States
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