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)
Mon, Mar. 14, 3:19 PM
- The financial sector (NYSEARCA:XLF) has performed woefully this year, and the banks (NYSEARCA:KBE) even worse. Cornerstone Macro technician Carter Worth finds twenty names trading well beneath their (falling) 150-day moving averages.
- The group has shown signs of life lately, and Worth thinks the stocks could move back to their 150-day averages, as stocks in other market sectors have done.
- It's strictly a trade, says Worth, who continues to rate the financials as Underweight. The 20:
- Ameriprise (NYSE:AMP), BofA (NYSE:BAC), Banner (NASDAQ:BANR), Citigroup (NYSE:C), Citizens Financial (NYSE:CFG), East West Bancorp (NASDAQ:EWBC), First NBC (NASDAQ:FNBC), HFF (NYSE:HF), KeyCorp (NYSE:KEY), Legacy Texas (NASDAQ:LTXB), Lincoln National (NYSE:LNC), Morgan Stanley (NYSE:MS), Old National (NASDAQ:ONB), PacWest (NASDAQ:PACW), PNC Financial (NYSE:PNC), Principal Financial (NYSE:PFG), Stifel Financial (NYSE:SF), SVB Financial (NASDAQ:SIVB), TCF Financial (NYSE:TCB), Wells Fargo (NYSE:WFC).
Tue, Mar. 8, 7:22 AM
- In what could be signs of revival in a left-for-dead business, Wells Fargo (NYSE:WFC) expects to begin trading credit-default swaps (CDS) as soon as next quarter, reports Bloomberg.
- To review for those who had forgotten (or haven't seen The Big Short): CDS allow investors to bet on the corporate credit of individual companies (or, for instance, a block of mortgages). It seems there's been a good deal of interest in the trading/hedging vehicles since credit began weakening last year.
- Wells will apparently trade single-name swaps backed by a central clearinghouse, with BlackRock and Pimco among a number of firms that recently announced plans to voluntarily clear the instruments.
Mon, Mar. 7, 2:41 PM
- At issue is a $75M bond offering in 2010 for 38 Studios, a now-bankrupt video game company founded by former MLB pitcher Curt Shilling.
- The offering came through the Rhode Island Economic Development Corp., and the SEC has charged Wells Fargo (NYSE:WFC) and the state agency with defrauding investors. The bank's lead broker on the sale has also been charged.
- Wells and its broker, says the SEC, misled investors by not telling them of a side deal with 38 Studios through which it received double the disclosed compensation.
- Wells denies the charges.
Mon, Mar. 7, 2:20 AM
- In a bid to boost its dealmaking franchise, Wells Fargo (NYSE:WFC) is hunting for a new head of M&A to succeed John Laughlin, who has moved into a vice chairman role.
- While Wells has seen its stock price and return on equity rewarded for focusing on wealth management and Main Street lending, this latest move reflects a desire to build out its investment banking franchise.
Wed, Mar. 2, 6:30 AM| Wed, Mar. 2, 6:30 AM | 1 Comment
- February monthly performance was: +1.21%
- 52-week performance vs. the S&P 500 is: 0%
- $0.16 in dividends were paid in February
- Top 10 Holdings as of 1/29/2016: Exxon Mobil Corporation (XOM): 3.46%, AT&T Inc (T): 3.42%, Microsoft Corp (MSFT): 3.2%, Verizon Communications Inc (VZ): 2.8%, Apple Inc (AAPL): 2.72%, Johnson & Johnson (JNJ): 2.33%, General Electric Co (GE): 2.28%, Chevron Corp (CVX): 2.19%, Procter & Gamble Co (PG): 2.06%, Wells Fargo & Co (WFC): 1.97%
Tue, Mar. 1, 11:03 AM
- General Electric (GE +1.4%) has completed the sale of the majority of its North American commercial lending and leasing businesses to Wells Fargo (WFC +2.4%).
- The sale includes GE Capital's Global Commercial Distribution Finance, Vendor Finance and Corporate Finance platforms, representing ending net investment of approximately $29B ($31B of assets).
- "And now, investors should be keeping their eye on GE's onerous Systemically Important Financial Institution status," Jim Cramer said by email. "Once SIFI is shed, the dividend could go much higher, not just the buybacks, which will be bountiful."
Wed, Feb. 24, 3:05 PM
- Echoing a similar move by JPMorgan yesterday, Wells Fargo (WFC -1.7%) boosted loss provisions tied to the energy sector by $1.2B. Roughly 10% of the bank's total loan-loss reserves ($12.5B) are oil and gas-related, though those loans account for just 2% of the overall loan portfolio ($917B).
- Wells also warns of additional deterioration should energy prices remain lower for longer. Also up for "credit challenges" would be loan exposure in communities with high energy-sector employment.
- Annual report
- Previously: Banks lower as JPMorgan warns on energy (Feb. 23)
Tue, Feb. 23, 2:38 PM
- Holding its investor day today, JPMorgan said it was going to add another $500M to energy-related loan-loss reserves. This followed a $67M provision in Q4, which at the time brought total oil and gas loss reserves to $815M (vs. a portfolio with book value of $44B).
- In addition, the bank said it could need to add another $1.5B to reserves should oil hang around $25 per barrel over the next 18 months. For perspective, prior to Q4, JPMorgan hadn't had to add to reserves for six years - in fact reserve releases were a big boost to profits across the industry.
- "When the biggest bank increases reserves for potential oil losses it sets a tone for the industry,” says Mike Mayo.
- Separately, the FDIC says bad loan provisions across the banking sector were $3.8B higher in Q4 than a year earlier.
- JPMorgan (JPM -3.5%), Citigroup (C -2.9%), Bank of America (BAC -2.9%), Wells Fargo (WFC -2%), U.S. Bancorp (USB -3%), Regions Financial (RF -3.8%), Comerica (CMA -4.2%), Zions (ZION -4.1%), PNC Financial (PNC -2%).
- ETFs: KRE, KBE, IAT, KBWB, QABA, KBWR, KRU, KRS
Fri, Feb. 19, 11:36 AM
- Digging through this week's 13F filings, Evercore ISI's Pankal Patel and team attempt to separate the holdings of hedge funds and other active managers.
- What they found were that institutions (active managers) were most overweight Wells Fargo (NYSE:WFC), IBM, and Coca-Cola (NYSE:KO). Two new names on the overweight short-list: Level 3 Communications (NYSE:LVLT) and Zimmer Biomet (NYSE:ZBH).
- Hedge funds, on the other hand, were most overweight Time Warner Cable (NYSE:TWC), Priceline (NASDAQ:PCLN), and Netflix (NASDAQ:NFLX). Hedge funds also added to holdings of AIG, Humana (NYSE:HUM), Alphabet (GOOG, GOOGL), and EMC during Q4.
- Also of interest: While consumer discretionary stocks (NYSEARCA:XLY) continue to be the top over-weighted sector for hedge funds, they pulled back from those names considerably during the quarter, and added to tech (NYSEARCA:XLK) in a big way. They also added to their underweight in the consumer staples stocks (NYSEARCA:XLP).
Tue, Feb. 16, 11:07 AM
- Former Goldmanite and TARP czar, and now Minneapolis Fed President, Neil Kashkari says the time is right for Congress to go further than Dodd-Frank "with bold, transformational solutions to solve [too big to fail] once and for all."
- Lawmakers, he says, should break up the largest banks into "smaller, less connected, less important entities." Other options would be turning the large lenders into public utilities by forcing them to hold so much capital that they can't fail, or taxing leverage throughout the financial system.
- Watching with interest: BAC, C, JPM, WFC, MS, GS
Thu, Feb. 11, 2:37 PM
- Oil's lower by 3.3% today, but it's the financial sector (XLE -3.1%) again leading the S&P 500's 2.15% decline.
- For the year, the XLF is down by 17.9%, easily outpacing on the downside energy (down 13%) and the S&P 500 (down 11%).
- With the 10-year yield plunging all the way to 1.6% and short-term rates markets now beginning to price in Fed rate cuts this year, the banks are being hit particularly hard: Bank of America (BAC -8.1%), Citigroup (C -7.6%), JPMorgan (JPM -5.1%), Wells Fargo (WFC -2.9%), Goldman Sachs (GS -5.4%).
- Leading regionals (KRE -4.4%) lower are KeyCorp (KEY -5.9%), Huntington Bancshares (HBAN -4.9%), Fifth Third (FITB -5.4%), and PNC Financial (PNC -4.4%).
- 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
- Previously: Lots of negative rate talk at Yellen hearing (Feb. 11)
- Previously: Insurers punished as rates plunge (Feb. 11)
Mon, Feb. 8, 2:24 PM
- It is the European banks and contagion concerns that are freaking out the markets today - not just the Fed, China and crude oil - according to David Rosenberg, noting that some of the European banks are trading at 2008 crisis levels after the group has tumbled 18% YTD vs. 11% for the STOXX 600 index.
- European financial firms are taking a beating amid fears of "a chronic profitability crisis that makes it impossible for banks to build up barely-adequate capital bases," WSJ reports.
- Deutsche Bank (DB -9.8%) is down another ~10%, bringing its YTD loss to nearly 40% while its valuation has fallen to ~30% of book value, and its credit default swaps spiked to their highest levels since 2012.
- News of major withdrawals out of Credit Suisse (CS -4.2%) caused its shares to sink 11% last week, hitting a 24-year low, and Santander (SAN -6.2%), BBVA (BBVA -5.4%), and UniCredit (OTCPK:UNCFF -5.5%) are down to lows seen during the last eurozone financial crisis.
- "Oil and the flatter yield curve alone do not explain the 12% plunge we have seen in S&P Financials so far this year," Rosenberg says, adding that BofA (BAC -6.1%), Citigroup (C -6.2%) and Wells Fargo (WFC -3.5%) all briefly touched 52-week lows last week - "an ominous signpost."
- ETFs: XLF, FAS, FAZ, UYG, VFH, PSP, IYF, EUFN, BTO, IPF, IAI, IYG, SEF, FNCL, FXO, PFI, IXG, PEX, RYF, FINU, KCE, RWW, KBWC
- Earlier: Markets extend two-day rout; gold gets 3% boost
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
Wed, Feb. 3, 8:29 AM
- The bank this week reached an agreement in principle with the DOJ and regulators in which it will pay $1.2B to resolve various claims over its FHA lending from 2001-2010.
- The settlement will boost its end-of-year legal accrual by $200M, thus cutting 2015 income by $134M, or $0.03 per share to $22.9B or $4.12.
- WFC -0.7% premarket
Tue, Feb. 2, 9:00 AM| Tue, Feb. 2, 9:00 AM
- January monthly performance was: -3.31%
- 52-week performance vs. the S&P 500 is: -2%
- $0.10 in dividends were paid in January
- Top 10 Holdings as of 12/31/2015: Exxon Mobil Corporation (XOM): 3.35%, AT&T Inc (T): 3.15%, Microsoft Corp (MSFT): 3.11%, Apple Inc (AAPL): 2.84%, Verizon Communications Inc (VZ): 2.5%, General Electric Co (GE): 2.36%, Johnson & Johnson (JNJ): 2.21%, Chevron Corp (CVX): 2.2%, Wells Fargo & Co (WFC): 2.06%, Procter & Gamble Co (PG): 1.93%
Wells Fargo & Co. is a nationwide, diversified, community-based financial services and bank holding company. It provides banking, insurance, investments, mortgage, and consumer and commercial finance through its stores, ATMs, the Internet, and other distribution channels across North America and... More
Industry: Money Center Banks
Country: United States
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