The Charles Schwab CorporationNYSE
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%)
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%).
Tue, Nov. 22, 10:30 AM
- Citi's William Katz is selling the rip in AllianceBernstein (AB +0.4%), saying the rally "tempers residual upside" while the company's MLP structure limits potential tax-related earnings accretion. He downgrades to Neutral, and the $24 price target remains (current price is $23.60).
- Alongside, Katz upgrades Schwab (SCHW) to a Buy, noting the company's leverage to higher interest rates. The $44 price target suggests about 15% upside.
- Source: TheFly
Fri, Nov. 18, 12:27 PM
- The rumor that Schwab (NYSE:SCHW) has interest "comes as a bit of a shock," says Nomura's Steve Chubak, calling deal hurdles for public acquirers "insurmountable," and believing a P/E rollup to be the more likely outcome.
- What could make a Schwab buy somewhat more likely, he admits, is the idea that the DOL fiduciary rule could be softened under a Trump administration/GOP Congress.
- Other headwinds might also abate, as LPL Financial (NASDAQ:LPLA) would be one the largest beneficiaries of higher interest rates.
- Chubak and team's analysis sees roughly 11% accretion potential should Schwab buy, "however, the uncertainty around the realization and timing of these benefits suggests that attractive deal economics are far from certain and that takeout consideration by SCHW seems remote."
- Previously: Citi's Katz plays down chance of Schwab buying LPL Financial (Nov. 17)
Thu, Nov. 17, 2:34 PM
- William Katz sees a very low likelihood of Schwab (SCHW +0.7%) buying LPL Financial (LPLA +3.4%), noting management has promised to use capital for bank sweep migration and bolt-on acquisitions, rather than transformative deals.
- Katz, however, doesn't discount the possibility of another party gunning for LPL.
- Previously: LPL Financial higher on Schwab interest (Nov. 17)
Thu, Nov. 17, 7:56 AM
Mon, Nov. 14, 3:47 PM
- Unsurprisingly given their run of late, financials dominate the list:
- Bank of America (BAC +5%)
- Citigroup (C +1.5%)
- Citizens Financial (CFG +3.1%)
- Discover (DFS +3.1%)
- First Republic (FRC +2.5%)
- Goldman Sachs (GS +2.2%)
- Humana (HUM +3%)
- Manulife (MFC +2.9%)
- Northern Trust (NTRS +3%)
- PNC Financial (PNC +1.7%)
- Regions Financial (RF +6.5%)
- Schwab (SCHW +1.6%)
Mon, Nov. 14, 11:33 AM
- The major averages are stuck in the red, but the XLF is up 2.2% and the KBE +3% as financial sector investors mull a world of higher interest rates and lowered regulation.
- REITs continue to fall, but thanks to this fall's sector reclassification, those names are no longer in the financial indexes.
- Regional banks: Regions Financial (RF +6.9%), New York Community (NYCB +2.9%), KeyCorp (KEY +3.1%), PNC Financial (PNC +2.4%), Fifth Third (FITB +4%), SunTrust (STI +3%), M&T (MTB +3.1%)
- Insurers: MetLife (MET +2.2%), Lincoln (LNC +3.2%), AIG (AIG +2.1%), Hartford (HIG +2.3%), Travelers (TRV +1.4%)
- Online brokerage: Schwab (SCHW +3.6%), Ameritrade (AMTD +2.5%)
- Asset management: Franklin Resources (BEN +3.2%), Och-Ziff (OZM +4.5%), Invesco (IVZ +2.2%), T. Rowe Price (TROW +2.8%), BlackRock (BLK +0.4%)
Mon, Nov. 14, 9:12 AM
- Total client assets at Schwab (NYSE:SCHW) as of the end of October of $2.69T were down 1% from a month earlier, and up 6% Y/Y.
- Average interest-earning assets of $201.9B gained 1% from September and 22% Y/Y.
- Net new assets brought in by new and existing clients of $6.1B in October.
- Source: Press Release
Thu, Nov. 10, 11:03 AM
- For now, the 10-year Treasury yield is holding onto the huge gain in posted yesterday, up two basis points today to 2.086%. TLT -0.4%, TBT +0.8%. Fed Funds futures have priced in about a 100% chance of a December rate hike.
- The yield curve has shifted both higher and steeper - pure manna for the companies that borrow short and lend long. There's also a new sheriff coming to town, and bank investors are no doubt mulling an eased regulatory regime. KBE +2.45%, KBE +2.4%
- Bank of America (BAC +3.5%), Wells Fargo (WFC +4.5%), JPMorgan (JPM +3.1%). Underperformers among the TBTF players: Citigroup (C +1.1%), Goldman (GS +1.1%)
- Regional banks: Regions (RF +4.2%), PNC Financial (PNC +3.3%), Fifth Third (FITB +1.7%). Online brokers: E*Trade (ETFC +2.9%), Schwab (SCHW +2.8%), Ameritrade (AMTD +2.6%), Interactive Brokers (IBKR +2.7%)
Thu, Oct. 27, 10:51 AM
- Rates are up across the globe again today, with the 10-year U.S. Treasury yield looking like it's ready for another assault on 2% - up 7 basis points on the session to 1.865%.
- Alongside a sharp move lower in REITs, the utility sector (XLU -0.9%) is facing a rough go of it.
- In the green though is the banking sector - (KBE +0.2%), (KRE +0.4%) - which has been awaiting a real move higher in rates for years. A big move on the long end while short rates hold (for now) is an added boost as it widens the yield curve.
- Bank of America (BAC +0.4%), Citigroup (C +0.4%), JPMorgan (JPM +0.4%), Wells Fargo (WFC +0.5%), PNC Financial (PNC +0.5%), Fifth Third (FITB +0.9%), U.S. Bancorp (USB +1.2%), BB& T(BBT +0.7%)
- Other high-yield beneficiaries include: MetLife (MET +0.9%), Lincoln Financial (LNC +1.3%), Schwab (SCHW +0.4%), Voya Financial (VOYA +0.9%).
- ETFs: XLF, FAS, FAZ, XLU, UTG, IDU, VPU, UYG, VFH, GUT, BUI, IYF, BTO, FUTY, IYG, FNCL, SEF, RYU, FXO, UPW, RYF, FXU, FINU, RWW, SDP, XLFS, FINZ, FUGAX, JHMF, FAZZ, FNCF, JHMU, UTLF
Wed, Oct. 26, 11:38 AM
- First off, TD Ameritrade's (NASDAQ:AMTD) deal to buy Scottrade likely means any tie-up between AMTD and E*Trade (NASDAQ:ETFC) is likely put off by at least 18 months, says analyst Brian Bedell.
- Other takeaways are that the value of online brokerage is greater thanks to the recent DOL fiduciary rules, and that pricing competition is likely to ratchet higher.
- For E*Trade, new management has asked for about two years to execute its growth strategy. If things don't work out by then, it would consider a sale, so the AMTD purchase gives management that time. Growth may come even easier, suggests Bedell, as E*Trade could lure some Scottrade or AMTD customers to its platform. Still, the additional price competition has Bedell trimming his 2017 and 2018 EPS estimates by 1% and 2%, respectively.
- As for Schwab (NYSE:SCHW), Bedell doesn't see it participating in the consolidation trend, but he does anticipate the company being more aggressive on pricing, given its scale advantages and far lower reliance on trading revenue. Schwab, he says, could offer free trading for clients transferring large balances, and still make money on the deal. He nevertheless cuts his EPS estimates for 2017 and 2018 by 1% each.
Fri, Oct. 21, 6:40 AM
Tue, Oct. 18, 10:52 AM
- Schwab (NYSE:SCHW) slipped yesterday following a headline beat on earnings as investors may have been disappointed by a one basis point decline in net interest margin, says UBS analyst Alex Kramm.
- There's also the rapid growth of the company's banking operation which could mean an "eventual increase in regulatory oversight."
- Nevertheless, says Kramm, the results reiterate the strength of the core business, while external factors (rates) drive sentiment on the stock. The current multiple, he says, "does not give full credit" to the chances of higher rates.
- He keeps his Buy rating and $37 price target (15% upside).
- Shares are up 1.2% today.
Mon, Oct. 17, 9:58 AM
- Q3 net income of $503M or $0.35 per share vs. $376M and $0.28 one year ago. Net litigation proceeds added a penny per share to this year's result.
- Pretax profit margin at a record 41.5%, up 500 basis points. ROE of 14% up 100 basis points.
- Net interest revenue of $845M up 33% Y/Y, with a 22% increase in average interest-earning assets, and the rest from higher short-term rates.
- Trading revenue of $190M fell 17%, with this year's Q3 less volatile than 2015's.
- SCHW -2.15%
- Previously: Charles Schwab beats by $0.02, beats on revenue (Oct. 17)
Mon, Oct. 17, 8:56 AM
- Charles Schwab (NYSE:SCHW): Q3 EPS of $0.35 beats by $0.02.
- Revenue of $1.91B (+19.4% Y/Y) beats by $20M.
- Shares +0.41% PM.