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State Street Corporation (STT)

  • Oct. 24, 2014, 7:08 AM
    • State Street (NYSE:STT): Q3 EPS of $1.35 beats by $0.14.
    • Revenue of $2.68B (+8.5% Y/Y) beats by $70M.
    • Press Release
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  • Oct. 23, 2014, 5:30 PM
  • Oct. 23, 2014, 4:49 PM
    • Not having had the pleasure of being subject to the stress test and CCAR previously, Deutsche Bank's (NYSE:DB) U.S. unit will be a participant next year
    • As in prior years, those BHCs with large trading operations - BAC, C, GS, JPM, MS, WFC - will be required to factor in a global market shock as part of their scenarios.
    • Those six, plus STT and BK - thanks to their custodial operations - will be required to incorporate a counterparty default scenario.
    • Among the items in the severely adverse scenario is the unemployment rate jumping to 10%, a 60% dive in the stock market, and oil jumping to $110 per barrel (how about oil falling to $10 per barrel?).
  • Sep. 30, 2014, 1:44 PM
    • Previously trying to stay out of the ETF price wars, State Street Global Advisors (STT -0.1%) sets price cuts averaging 20% across 15 of its core equity and fixed income ETFs. The new fees on the 15 SSgA ETFs now range between 9-55 basis points from 15-65 previously.
    • Among those with lower fees is the industry goliath, the SPDR S&P 500 ETF (NYSEARCA:SPY), with a cost of 9 basis points down from 15.
    • Globally, SSgA is the 2nd largest ETF provider, but is in danger of losing that spot to fast-growing Vanguard (its competing S&P 500 tracker is VOO; iShares' is IVV). In Europe, SSgA is the eight-largest provider with assets of $10.5B, but is also under threat there from Vanguard which has built up AUM of $10.3B. Vanguard's European ETFs have seen $5.6B of net inflows this year vs. SSgA's $1.8B.
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  • Sep. 17, 2014, 8:29 AM
    • Simon Pepper - the London-based chief of foreign-exchange spot trading for State Street (NYSE:STT) - hasn't been seen on the trading desk for two weeks, reports the WSJ (and mostly confirmed by the bank). Sources at the bank say he's been asked to stay out of the office amid an internal review of forex trading.
    • While foreign exchange traders have been falling left and right at about a dozen banks thanks to investigations over rate-rigging, Pepper would mark the first State Street casualty.
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  • Sep. 10, 2014, 4:38 PM
    • State Street Corporation's (NYSE:STT) new fund, the SPDR SSgA Risk Aware ETF, is designed to provide investors with competitive returns, compared to the broad U.S. equity market, and capital appreciation.
    • “The SPDR SSGA Risk Aware ETF (NYSEARCA:RORO) is targeted at providing investors an innovative solution for capitalizing on risk-on and risk-off fluctuations in the US equity market,” said Scott Ebner, senior managing director and global head of product development and research at State Street Global Advisors, in a statement.
    • Managed by SSGA’s Active Quantitative Equity Group, the fund will employ their quantitative market risk measurement model to identify, quantify and benefit from risk factors moving the markets at any given time.
    • Other broad U.S. equity ETFs built to maximize returns: USMV, QUAL, BFOR, PWC, FAB, VLUE, VUSE, PDP, MTUM, MOM, MMTM, DWAQ
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  • Sep. 9, 2014, 12:24 PM
    • The Fed intends to impose a capital surcharge on banks tougher than the international standard, according to Fed Governor Daniel Tarullo's prepared remarks for the Senate Banking Committee. Those banks with heavier reliance on short-term funding like overnight loans - i.e. Goldman Sachs (GS -1%) and Morgan Stanley (MS -1.8%) - will likely face even more rigorous requirements.
    • Officials haven't yet decided on a number, but reportedly are considering as much as 200 basis points more than the top range of 2.5% of risk-weighted assets agreed to by international regulators.
    • What's not yet clear is who would need to raise capital to meet the new, tougher standard.
    • Citigroup (C -1%), Bank of America (BAC -0.6%), JPMorgan (JPM -1.3%), Wells Fargo (WFC -0.4%), State Street (STT -1.1%), Bank of New York Mellon (BK -0.9%)
  • Sep. 8, 2014, 1:11 PM
    • Aiming to boost its oversight of asset managers - mutual funds, hedge funds, private-equity - the SEC is prepping new disclosure rules supposedly to allow the agency to better assess whether the companies pose systemic risk.
    • The top 5 firms are: BlackRock (BLK), Vanguard, State Street Global Advisors (STT -0.1%), Pimco (OTCQX:AZSEY -0.3%), and Fidelity.
    • Among the concerns are some mutual funds' use of derivatives to boost returns, reports the WSJ, citing sources at the SEC.
    • Another issue down the road could be the SEC requiring living wills along the lines of what's been ordered from the largest banks (a fiasco to this point).
    • The large asset managers had previously been under scrutiny by the Financial Stability Oversight Council to possibly be labeled as SIFIs, but the FSOC backed down this summer amid a heavy lobbying push by the big players.
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  • Sep. 4, 2014, 3:18 AM
    • U.S. regulators have approved of the proposed liquidity rules to safeguard banks in case of a financial crunch.
    • The rules are requiring large U.S. banks to load up on ultra-safe assets to ensure enough cash and securities to fund their operations for 30 days. Separate liquidity rules for foreign banks will be drawn up at a later date.
    • Big banks will need to hold a total of about $2.5T in easy-to-sell assets by 2017, which would result in a $100B shortfall if the threshold applied today.
    • Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
    • Previously: Bank regulators to vote on new liquidity rules
  • Sep. 3, 2014, 2:39 AM
    • Bank regulators are expected to finalize rules today that would require banks to hold capital against every asset on their books, and approve of a "liquidity-coverage ratio", which would require large banks to load up on ultra-safe assets to fund their operations for 30 days.
    • The new rules have Wall Street concerned due to the likely harm to earnings and lending restrictions, although regulators say the policies will create a safer financial system.
    • Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
  • Aug. 13, 2014, 3:14 AM
    • Bank officials, trade groups and lawmakers are quietly pressing the Federal Reserve for a delay of up to seven years regarding the rule that limits their investments in private-equity and venture-capital funds
    • The "Volcker rule," part of the Dodd-Frank legislation, restricts banks' ownership stake in hedge funds and private equity funds, and prohibits banks from making speculative bets with their own money.
    • Regulators finalized the rule in December but agreed not to enforce it until 2015.
    • Related tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
  • Aug. 6, 2014, 8:48 AM
    • The Federal Reserve and the FDIC say the bankruptcy plans submitted by 11 of the largest banks make "unrealistic or inadequately supported" assumptions and "fail to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for" an orderly failure. Ouch!
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    • The 11 dinged: BAC, BK, C, GS, JPM, MS, STT, and the U.S. units of BCS, CS, DB, and UBS.
    • To review: Dodd-Frank requires banks annually submit a "living will" detailing their operations and exposures and how they could be dismantled without the need of a bailout in the event they near failure. Pleasing the regulators is a must as they have the power to force tougher capital rules or restrictions on growth, or even mandate a breakup of the lenders. As for the current failures, the banks have about a year to address D.C.'s concerns.
    • "Despite the thousands of pages of material these firms submitted, the plans provide no credible or clear path through bankruptcy that doesn't require unrealistic assumptions and direct or indirect public support," says the FDIC's #2 official, Thomas Hoenig.
  • Jul. 22, 2014, 3:09 PM
    • State Street (STT +0.1%) beat expectations for Q2 earnings and revenues, but warns that it would be challenging for it to increase revenue faster than expenses this year.
    • CEO Joseph Hooley now sees STT's Q3 operating expenses ~$20M higher than in Q2 and expenses in Q4 roughly unchanged from Q3; in Q2, operating expenses rose 3.7% Y/Y to $1.82B but fell 5.2% Q/Q.
    • STT also now expects 2014 regulatory costs to be higher than previously expected, after forecasting a range of $30M-$40M.
    • Analysts also note that Q2 results benefited from a much lower tax rate, which added ~$0.09/share to profit.
    • Q2 net interest margin narrowed sharply to 1.12% from 1.31% a year earlier and 1.24% in Q1.
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  • Jul. 22, 2014, 7:13 AM
    • State Street (NYSE:STT): Q2 EPS of $1.39 beats by $0.13.
    • Revenue of $2.68B (+4.7% Y/Y) beats by $70M.
    • Press Release
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  • Jul. 21, 2014, 5:30 PM
  • Jul. 17, 2014, 4:30 PM
    • State Street Corporation (NYSE:STT) declares $0.30/share quarterly dividend, in line with previous.
    • Forward yield 1.74%
    • Payable Oct. 16; for shareholders of record Oct. 1; ex-div Sept. 29.
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Company Description
State Street Corp provides a range of investment management strategies, investment management advisory services and other financial services for corporations, public funds and other sophisticated investors.
Sector: Financial
Country: United States