Seeking Alpha

Financial Select Sector SPDR ETF (XLF)

  • Jul. 2, 2013, 4:23 PM
    The FDIC will introduce a draft of leverage limits for the big banks (XLF) on July 9. It's expected these could be as much as double (to 6%) what's required by Basel III, but it's also expected many large U.S. lenders are already above that level and the ones below shouldn't have an issue reaching it. 6% is also an upper limit - chances are the level comes in somewhere between 3-6%.
    | Jul. 2, 2013, 4:23 PM | Comment!
  • Jul. 2, 2013, 12:28 PM
    Banks with a heavy reliance on mortgage originations catch a break with new capital rules approved by the Fed today. The central bank decided not to increase risk-weightings for mortgages, citing new underwriting rules as well as other pending rules as the reasons. Small banks also get good news as any trust preferreds issued prior to 2010 are grandfathered in as acceptable capital.
    | Jul. 2, 2013, 12:28 PM | 2 Comments
  • Jul. 2, 2013, 9:36 AM
    The Fed is set to approve today moving forward with Basel III capital rules which will force 100 of the country's banks (XLF) to raise about $4.5B in capital by 2019. Included are rules limiting capital returns and bonuses if the buffers aren't in place. Like the long putter ban in golf, all have known and prepared for the new rules. "Move on, non-story," says a trader.
    | Jul. 2, 2013, 9:36 AM | Comment!
  • Jul. 1, 2013, 11:55 AM
    The proposed doubling of bank (XLF) minimum leverage ratios to 6% isn't a big deal, says Credit Suisse, noting COF, WFC, PNC, and UBS are already above that level. The three with the lowest current levels (4.6% to 5.1%) - C, JPM, BAC - wouldn't have an issue getting to 6% if necessary. CS also notes the likelihood it won't be 6%, but instead a number well underneath.
    | Jul. 1, 2013, 11:55 AM | 6 Comments
  • Jun. 26, 2013, 3:54 AM
    Falling bond prices and rising yields are threatening the recovery in the balance sheets of global banks, which have built up huge portfolios of liquid securities to comply with regulatory requirements and due to a lack of better investments. For example, 90% of Bank of America's (BAC) $315B portfolio comprises mortgage bonds and Treasurys. Some analysts, though, believe that QE tapering should increase interest margins and offset the one-time hit to book values because of rising bond yields.
    | Jun. 26, 2013, 3:54 AM | 8 Comments
  • Jun. 25, 2013, 2:54 PM
    The Dow (DIA +0.8%) hangs on to a triple-digit gain a bit more than an hour before the bell even as Treasury yields continue to climb, the 10-year at 2.59% and the long bond at 3.61%. The day's strongest sector is the financials (XLF +1.9%) led by the TBTFs Bank of America, JPMorgan, and Ciitgroup all up 2.5%-4%.
    | Jun. 25, 2013, 2:54 PM | Comment!
  • Jun. 25, 2013, 11:58 AM
    Looking for relative strength? With the S&P 500 off nearly 5% since May's end and the big-cap focused Financial Sector SPDR (XLF) down 5%, the Regional Banking ETF (KRE) is about flat as higher rates hold the promise of better margins. Within the KRE, those stocks looking the best technically to Frank Zorilla are ASBC, BBT, MTB, HBAN, HOMB, RF, ZION.
    | Jun. 25, 2013, 11:58 AM | 4 Comments
  • Jun. 21, 2013, 11:54 AM
    A check of the TBTFs finds Wells Fargo (WFC +0.9%) the only gainer amidst a floated report the Fed and FDIC are weighing a doubling in the "simple leverage ratio." Wells already exceeds the 6% proposed ratio, but presumably BofA (BAC -2.8%), JPMorgan (JPM -1.3%), Citigroup (C -4%), Goldman (GS -1.7%), and Morgan Stanley (MS -3.1%) would need to halt or pare back dividends and buybacks should the rule be implemented. The financial SPDR (XLF -1.4%).
    | Jun. 21, 2013, 11:54 AM | 8 Comments
  • Jun. 21, 2013, 8:53 AM
    Financial Select Sector SPDR ETF (XLF) announces quarterly distribution of $0.0771. 30-day SEC yield of 1.43% (as of 06/19/2013). For shareholders of record June 25. Payable July 01. Ex-div date June 21.
    | Jun. 21, 2013, 8:53 AM | Comment!
  • Jun. 18, 2013, 3:04 PM
    Rising interest rates should be good for bank (XLF) income statements, but maybe bad for bank balance sheets, opines Fitch. Higher long rates mean wider margins which is good for earnings, but securities backing bank capital levels have large unrealized gains attached - gains which could disappear and turn into losses as rates rise. Basel III rules, of course, have yet to be finalized so the ultimate impact is not yet clear.
    | Jun. 18, 2013, 3:04 PM | Comment!
  • Jun. 17, 2013, 8:26 AM
    "Higher rates without meaningful economic growth are bad for banks (XLF), says FBR's Paul Miller, making a counterpoint to last week's line of bank executives welcoming the recent increase in interest rates. KBW's Chris Mutascio is also skeptical, noting short-term rates driving loan pricing could stay flat while assets pegged to long-term yields lose value.
    | Jun. 17, 2013, 8:26 AM | Comment!
  • Jun. 8, 2013, 4:38 PM
    The percentage of the stock market now owned by hedge funds (5%) is the highest since Q2 2008, BofA Merrill Lynch finds in its Hedge Fund Quarterly Report. Hedge funds reduced cash holdings to the Q2 2007 trough of 4.3%, and raised net equity exposure to the Q2 2007 peak of 59%. Their largest exposure is to consumer discretionary stocks (XLY) followed by IT (XLK) and financials (XLF).
    | Jun. 8, 2013, 4:38 PM | 23 Comments
  • Jun. 5, 2013, 11:16 AM
    Stocks broadly tumble in late-morning trade, the S&P 500 (SPY -0.8%), the Nasdaq 100 (QQQ -0.8%), and the Dow (DIA, DOG) off triple-digits. The financial sector (XLF -1.3%) leads the way, headed by a 2.1% decline in Citigroup. Higher interest rates may be the worry, but the stock market's fall pretty much means they're not coming. The 10-year Treasury yield slips 3 bps to 2.10%. TLT +1%, TBT -1.8%.
    | Jun. 5, 2013, 11:16 AM | 14 Comments
  • May 31, 2013, 3:26 PM
    Higher interest rates - but not too high - should give a boost to regional banks and to the regional bank ETF (KRE) which has lagged the TBTF-tilted XLF and VFH this year. One analyst says about 100 basis points would  be right - high enough to boost spread income without taking too big a chunk out of book value. Since when have Treasury yields been so cooperative?
    | May 31, 2013, 3:26 PM | Comment!
  • May 31, 2013, 3:21 PM
    Large-cap banks are poised for multiple expansion, says Sterne Agee, as discussions with managements along with data points from recent investor presentations suggest business in Q2 is doing better than expectations. The team is recommending a basket of C, JPM, MS, and GS. In a similar vein, they like a basket of "discounted regionals" - PNC, MTB, RF, USB, and STI.
    | May 31, 2013, 3:21 PM | Comment!
  • May 30, 2013, 11:36 AM
    "The smartest people in banking want to be bankers again," says Cramer, pointing to the recent IPO of Customers Bancorp (CUBI), led by CEO Jay Sidhu. Sidhu previously built Sovereign Bank into one of the country's largest before flipping it to Santander. He says financials (XLF +1%) are the market's most undervalued group and set to "make fortunes" as long rates head up. Deep-value investor Richard Pzena agrees.
    | May 30, 2013, 11:36 AM | Comment!
XLF Description
The Financial Select Sector SPDR® Fund, before expenses, seeks to closely match the returns and characteristics of the Financial Select Sector Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
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Sector: Financial
Country: United States
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