Wed, Mar. 18, 2:41 PM
- The Dow and S&P 500 have each turned more than 1% higher following after the Fed cuts its projections for GDP growth, inflation, and the pace of rate hikes, but the country's yield-starved lenders don't join the party.
- The KBE is down 0.5% and the KRE by 0.9%.
- Bank of America (BAC -0.2%), Citigroup (C +0.1%), Regions Financial (RF -1.1%), KeyCorp (KEY -0.9%), First Niagara (FNFG -1.6%), U.S. Bancorp (USB +0.1%), PNC Financial (PNC +0.3%).
- Others gasping for a yield above zero: Schwab (SCHW -1.5%), E*Trade (ETFC +0.1%), Ameritrade (AMTD -0.5%).
- Previously: FOMC drops "patient," but sends dovish signal (March 18)
- Previously: Stocks stage sharp turnaround, yields dive following dovish Fed news (March 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
Wed, Feb. 18, 2:49 PM
- The financial sector had begun to turn around a dismal start to the year as February brought forth a string of hawkish Fed heads suggesting a June rate hike, but the XLF is lower by 0.8% after just-released FOMC minutes suggest markets and the hawks are getting ahead of themselves. KBE -1.7%, KRE -2%
- The TBTFs: BofA (BAC -2.2%), JPMorgan (JPM -1.4%), Wells Fargo (WFC -1.6%), Ciitgroup (C -0.8%)
- The regionals: Regions Financial (RF -1.6%), KeyCorp (KEY -1.6%), PNC Financial (PNC -1.3%), BB&T (BBT -1.5%), Fifth Third (FITB -1.6%), SunTrust (STI -1.7%), First Niagara (FNFG -2.1%), M&T (MTB -1.9%), U.S. Bancorp (USB -1.3%), First Horizon (FHN -2.7%).
- Online brokerage: Schwab (SCHW -2.3%), E*Trade (ETFC -1.7%), Ameritrade (AMTD -1.1%), Interactive Brokers (IBKR -0.9%).
- Previously: FOMC minutes: June rate hike not a slam dunk yet (Feb. 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWC, FINZ, KRS
Fri, Feb. 6, 9:50 AM
- Financials have been mercilessly pounded in 2015 as hopes for higher interest rates looked like they might be dashed yet again, but today's blowout jobs number - firmly putting a June rate hike on the table - has brought in the dip-buyers.
- The major averages are flat, but the XLF is up 1.4%. The Regional Bank ETF (KRE +2%) and the Bank ETF (KBE +2.1%) are doing even better.
- Among the yield-starved banking names: Bank of America (BAC +3.1%), JPMorgan (JPM +2.6%), Citigroup (C +2%), Regions Financial (RF +4%), KeyCorp (KEY +3%), PNC Financial (PNC +2.9%), SunTrust (STI +2.3%), Zions (ZION +3.6%), Synovus (SNV +2.3%).
- Insurers: MetLife (MET +2%), Prudential (PRU +3.2%), Lincoln National (LNC +4.6%). AIG (AIG +1.5%).
- Trust banks: BNY Mellon (BK +2.7%) State Street (STT +1.9%), Northern Trust (NTRS +2.3%).
- Online brokers (currently getting killed on money-market fee rebates): Schwab (SCHW +4.5%), TD Ameritrade (AMTD +3.5%), E*Trade (ETFC +2.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Dec. 5, 2014, 10:06 AM
- Among those counting on higher interest rates to boost profits are banks, insurers, and online brokers, and all are outliers to the upside in today's session after a strong November jobs report has rate hike expectations on the rise. The XLF is up 1%.
- TBTFs: Bank of America (BAC +2.1%), Citigroup (C +1.8%), JPMorgan (JPM +2.2%), Wells Fargo (WFC +1.2%)
- Regionals (KRE +1.9%): Regions Financial (RF +2.6%), KeyCorp (KEY +2.3%), Huntington (HBAN +1.5%), BB&T (BBT +1.6%), Zions (ZION +4%)
- Custodials: BNY Mellon (BNY), State Street (STT +1.6%), Northern Trust (NTRS +1.8%)
- Life insurers: MetLife (MET +2.1%), Prudential (PRU +2.5%), Lincoln National (LNC +2.3%)
- Online brokers: Schwab (SCHW +3.8%), E*Trade (ETFC +3%), Ameritrade (AMTD +2.7%)
- Previously: Short end of yield curve on the move after jobs number (Dec. 5, 2014)
- Previously: Bonds and dollar higher, gold slumps after strong jobs report (Dec. 5, 2014)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Oct. 15, 2014, 10:29 AM
- Q3 net income of $321M or $0.24 per share vs. $290M and $0.22 one year ago. Two nonrecurring items reduced pre-tax income by $23M, or $0.01 per share.
- $34.7B in new assets taken in, a 6% annualized growth rate. Total client assets of $2.4T up 12% Y/Y.
- CEO Walt Bettinger notes heightened volatility led to increased utilization of help and advice services. $1.19T of client assets are receiving some form of ongoing advisory service, up 15% from a year ago.
- Money market fee waivers (thanks to ZIRP) of $190M vs. $180M one year ago - not an insignificant amount considering quarterly earnings were $321M.
- Previously: Charles Schwab EPS in-line, beats on revenue
- SCHW -2.9%
Sep. 18, 2014, 12:53 PM
- Banks, insurers, brokerages and anything else starved for yield continue to gain following yesterday's FOMC news. Among the gainers are Bank of America (BAC +1.9%) - which breaks above $17 for the first time since April - Citigroup (C +2.7%), Wells Fargo (WFC +1.1%), PNC (PNC +1.1%), Fifth Third (FITB +1.7%), SunTrust (STI +1.2%), Schwab (SCHW +2.3%), Prudential (PRU +2.5%), and Lincoln National (LNC +2.4%).
- The XLF +1.2%, KBE +1.5%, and KRE +2%.
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
- Lit up bright red is the utility sector (XLU -1%), led by Southern Company (SO -1.1%), Dominion Resources (D -1.2%), Duke Energy (DUK -1.4%), and Pinnacle West (PNW -1.9%).
- Utility ETFs: XLU, IDU, VPU, UPW, RYU, FUTY, PUI, FXU, SDP, PSCU
Sep. 17, 2014, 3:16 PM
- Leading markets higher as the reality of higher interest rates gets nearer is the financial sector (XLF +0.9%). Whether its banks, brokerages, or insurers, a higher benchmark rate for some time has been considered a key bullish catalyst. An especially large move is being seen in the online brokerage names who have been forced to forego money market fees for years thanks to ZIRP: E*Trade (ETFC +3%), Schwab(SCHW +3.2%), Ameritrade (AMTD +2%).
- Morgan Stanley (MS +1.8%), Bank of America (BAC +1.2%), JPMorgan (JPM +0.9%)
- U.S. Bancorp (USB +1.1%), Regions Financial (RF +2%), New York Community Bank (NYCB +0.8%), Huntington Bancshares (HBAN +1.3%), KeyCorp (KEY +1.3%)
- MetLife (MET +0.6%), Voya Financial (VOYA +0.7%).
- Chubb(CB +0.4%), AIG (AIG +1.1%), Hartford (HIG +0.8%)
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, KBWP, RYF, KBWI, KRS, FINZ
Jul. 29, 2014, 10:42 AM
- It's not the first time Charlie Gasparino has floated this report, but E*Trade (ETFC +4.7%) and Schwab (SCHW +1.5%) have their tails in the air as the Fox News reporter says Goldman Sachs (GS +0.6%) is having internal discussions about whether it should swallow up one of the online brokers.
- Also on the move is Ameritrade (AMTD +1.4%).
- Previously: Goldman eyeing online brokers as trading business disappears?
Jul. 1, 2014, 3:29 PM
- Significant fixed-income cuts could be coming at Goldman Sachs (GS -0.3%) reports Charlie Gasparino, amid the continuing slowdown in business, with details maybe coming when the bank reports Q2 earnings on July 15.
- Both CEO Lloyd Blankfein and President Gary Cohn come from fixed-income and they've been reluctant to give up on the business, but the full effect of Dodd-Frank regulations are beginning to kick in, and a big change in the bank's business model could be necessary.
- During the internet boom, Goldman sniffed around E*Trade (ETFC +2.8%) and Schwb (SCHW +1.9%), and some bankers, according to Gasparino, say Goldman may need to take another look at purchasing an online brokerage name.
Apr. 23, 2014, 11:58 AM
- The online brokers trade lower despite a big earnings report from TD Ameritrade (AMTD -2%), and an upgrade to Outperform for E*Trade (ETFC -1.5%) from Wells Fargo ahead of its results after the bell today. Schwab (SCHW -1.5%) - reported Q1 last week.
- Big picture: Though struggling for the last month amid the heightened level of HFT hubbub, the brokerage names have had major runs thanks to sharply higher levels of trading activity. The next catalyst higher will likely be boosted short-term interest rates ... timing yet to be decided.
- On the earnings call, AMTD management says it expects FY EPS near the high end of $1.20-$1.40 guidance. Street consensus is for $1.44.
Apr. 15, 2014, 9:44 AM
- Charles Schwab (SCHW +2.8%) opens higher after reporting a 58% rise in Q1 profit, ahead of analyst expectations, due to a rise in trading commissions and fees for managing client assets.
- CEO Walt Bettinger says SCHW executed an average of 553,600 trades per day during the quarter, up 11% Y/Y and the highest volume in its history; total client assets of $2.31T also is an all-time high.
- Added $34.2B of net new assets during the quarter, a 6% annualized organic growth rate; new brokerage accounts increased by 258K, up 6% Y/Y.
- Q1 asset management and administration fees rose 11% to $611M, while trading revenue also increased 11% to $247M.
- Other discount brokers also are higher: AMTD +1.1%, ETFC +1.9%, LPLA +1.4%, IBKR +1%.
Apr. 4, 2014, 10:01 AM
- Running through the numbers, Goldman estimates E*Trade (ETFC -3.9%) makes about $92M per year in payment for order flow (PFOF), equating to $0.17 in EPS, or 15% of 2015 estimates.
- TD Ameritrade (AMTD -2.8%) isn't as clear with the numbers, but based on DARTs and extrapolating E*Trade's numbers, Goldman estimates about $0.23 in EPS, or 14% of 2015 estimates.
- Schwab (SCHW -2%), says Goldman, has about $0.08 EPS exposure to PFOF, or 7% of 2015 consensus.
Apr. 3, 2014, 1:36 PM
- "High-frequency trading is a growing cancer that needs to be addressed," writes Schwab (SCHW -0.5%) CEO Walt Bettinger. HFT "has run amok and is corrupting our capital market system by creating an unleveled playing field for individual investors and driving the wrong incentives for our commodity and equities exchanges. ... Trade orders from individual investors are now pawns in a bigger chess game."
- It's hard to make the connection between HFT and the online brokers, but they're tumbling in wake of Bettinger's essay. E-Trade (ETFC -6.3%), TD Ameritrade (AMTD -3.6%)
Jan. 17, 2014, 7:50 AM
- Analyst Michael Tarkan maintains a Neutral rating but lifts the price target to $25 to following yesterday's big Q4 earnings report (not to mention to yesterday's closing price of $26.80).
- "While we continue to view SCHW shares as rich and see some downside to the stock at current levels as short term rates will likely remain depressed near-term, we expect shares can continue to find support if modest macro progress continues."
- His team bumps its 2014 EPS outlook to $0.97 from $0.93 and establishes a 2015 estimate of $1.18.
- Shares +0.7% premarket
- Previous: Fog lifts at Schwab
Jan. 16, 2014, 9:03 AM
- Net income of $319M up 51% Y/Y on revenue of $1.435B up 18%. Pre-tax profit margin of 34.7% compares to 28.3% a year ago. ROE of 13% vs. 9%.
- CEO Walt Bettinger: "After a long period of progress masked by environmental headwinds, our standout financial performance in 2013 more clearly reflected the significant growth we've achieved with our through clients eyes strategy."
- Core net new assets of $140.8B up 25% Y/Y. 9.1M active brokerage accounts and 916K banking accounts, up 3% and 6%, respectively.
- CFO Joe Martinetto notes the firm's gains come even without much change in the interest rate environment which continues to put a hamper on earnings. Money market fund fee waivers of 182M compare to $142M a year ago (this on total firm net income of $319M for the Q).
- Press release, Q4 results
- SCHW +3% premarket
Jan. 7, 2014, 8:08 AM| Comment!
SCHW vs. ETF Alternatives
Charles Schwab Corp is a savings and loan holding company, which through its subsidiaries is engaged in securities brokerage, banking and related financial services. It operates in two segments namely Investor Services and Advisor Services.
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