Tue, Jun. 9, 2:45 PM
- Yield-starved financial sector names were mercilessly punished to start 2015 as sharply falling interest rates in January again disappointed investors waiting for the return of some spread income.
- The rout in bond prices since, alongside what now seems the near-certainty of the beginning of Fed rate hikes in as soon as three months has helped turn things around, and the sector - as measured by the Financial Select SPDR (NYSEARCA:XLF) - is now in the green for the year, and trails the S&P 500 by just about 150 basis points.
- Among the notable movers today as the 10-year yield rises to another 2015 high: Bank of America (BAC +1.4%), Wells Fargo (WFC +1.2%), U.S. Bancorp (USB +1.4%), Regions Financial (RF +1.3%), Huntington Bancshares (HBAN +1.6%), KeyCorp (KEY +1.6%), PNC Financial (PNC +1.3%), M&T (MTB +1.1%), Bank of Hawaii (BOH +1.6%), First Horizon (FHN +1.2%), Lincoln National (LNC +1.1%), E*Trade (ETFC +0.9%)
- 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
Fri, Jun. 5, 10:27 AM
- This morning's strong nonfarm payroll report may put to rest the idea of a continuing economic slowdown and puts on the table a rate hike maybe as soon as September.
- The 10-year Treasury yield is up nine basis points to 2.40%.
- The KRE +1.5%, KBE +1.6%, and the XLF +1.1% amid a flat S&P 500.
- Regional banks: Regions Financial (RF +3.3%), KeyCorp (KEY +2.5%), PNC Financial (PNC +1.9%), SunTrust (STI +2.3%), U.S. Bancorp (USB +2.2%), Zions (ZION +3.7%), First Niagara (FNFG +1.4%)
- Too Big Too Fails: Citigroup (C +2.2%), Bank of America (BAC +3.4%), JPMorgan (JPM +2.2%), Wells Fargo (WFC +1.9%)
- Life insurers: MetLife (MET +2.7%), Prudential (PRU +2.8%), Sun Life (SLF +1.9%), Lincoln Financial (LNC +2.5%)
- Online brokerage: Schwab (SCHW +3.8%), TD Ameritrade (AMTD +2.8%), E*Trade (ETFC +2.3%), Interactive Brokers (IBKR +2.5%)
- Previously: Jobs up 280K in May; UE rate ticks higher (June 5)
- Previously: Treasury yields surge amid strong job gains, boosted wage growth (June 5)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KBWR, KRU, RWW, RYF, FINZ, KRS
Tue, Apr. 14, 10:51 AM
- It starts with the customer, says Wells Fargo (WFC -1.7%) management on the earnings call, and customers tell us they want branches. Responding to a question about whether investments in technology are going to be a negative if they're not offset with branch closings, management says all channels are important, and both branches and mobile help link them. "We're as much an information provider as we are financial services."
- Webcast and earnings supplement
- Credit cards are one of the bank's biggest opportunities, says CEO John Stumpf, noting 729K new accounts in Q1, 19% more than a year ago. Outstanding balances are up 15%, in part thanks to the Dillard's purchase.
- The country's largest auto lender, Wells backed away a bit in Q1, making $7.1B in auto loans in Q1, down 10% Y/Y. The loan-loss rate slipped to 0.73% from 0.81% a year ago.
- Live blog on WSJ
- Previously: Wells Fargo beats by $0.06, beats on revenue (April 14)
- Previously: Wells Fargo slips early despite topping views (April 14)
Fri, Apr. 10, 6:46 AM
- GE decides the time is right to get out the banking business and plans to sell nearly all GE Capital assets over the next 24 months, excepting the financing verticals relating to the company's industrial businesses - GE Capital Aviation Services, Energy Financial Services, and Healthcare Equipment Finance.
- As part of the plan and as leaked yesterday, GE agrees to the sale of nearly all of the assets of GE Capital Real Estate to Blackstone (NYSE:BX) and Wells Fargo (NYSE:WFC). GE also has LOIs from other buyers for another $4B in property. The total amount of the sales comes to about $26.5B.
- Under the restructuring, GE expects more than 90% of its earnings will be generated by industrial businesses by 2018 - that's up from 58% last year.
- For 2015, the company's industrial businesses remain on track to generate operating EPS of $1.10-$1.20.
- GE has identified the potential to return $90B to shareholders in dividends, buybacks, and the Synchrony Financial (NYSE:SYF) separation through 2018, and has authorized a new buyback program of up to $50B. The company expects to reduce share count to 8B-8.5B by 2018 (it's currently 10B).
- Shares +1.8% premarket.
- Source: Press release
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
Mon, Jan. 5, 9:59 AM
Dec. 9, 2014, 8:52 AM
- A check of the other major banks premarket amid a global selloff of some note and BofA's Brian Moynihan's warning about sluggish Q4 trading revenue finds JPMorgan (NYSE:JPM) -1.5%, Citigroup (NYSE:C) -1.5%, Wells Fargo (NYSE:WFC) -1.2%, Goldman Sachs (NYSE:GS) -1.7%, and Morgan Stanley (NYSE:MS) -1.5%.
- XLF -1.1%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
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
Nov. 14, 2014, 7:34 AM
- Ocwen Financial's (NYSE:OCN) agreement to buy the MSRs on $39B UPB of mortgages from Wells Fargo (NYSE:WFC) was originally announced in January to the great excitement of Ocwen investors. Shortly after, however, Ben Lawsky held up the deal as his office examined the servicing practices at Ocwen, and its relationships with the Altisource companies.
- The two today announce a mutual decision to cancel the deal. For Wells, the cancellation won't be material to its financial results.
- Source: Press release
- Ocwen is down 6.7% premarket.
Oct. 14, 2014, 8:30 AM
- Q3 net income of $5.7B or $1.02 per share up 3% from a year ago.
- Net interest income of $10.9B up $150M from Q2, as strong asset growth was offset by a nine basis point drop in net interest margin to 3.06% - consumer deposits are rushing in, but bank is having trouble finding someplace to invest the cash.
- Noninterest income of $10.3B is flat from Q2, with mortgage banking income of $1.6B off $90M. Residential mortgage originations of $48B were $1B higher on the quarter.
- Noninterest expense of $12.2B increased $54M from Q2. The efficiency ratio improves to 57.7% from 57.9%.
- Total loans of $838.9B up $9.9B from Q2.
- Conference call at 10 ET
- WFC -0.9% premarket
- Previously: Wells Fargo EPS in-line, beats on revenue
Sep. 25, 2014, 3:09 PM
- Today's resignation of Attorney General Eric Holder could mark the beginning of the end of the Justice Department’s push to hold big banks accountable for their conduct leading up to the financial crisis.
- Several big banks, including Goldman Sachs (GS -2.1%) and Wells Fargo (WFC -1.1%), are still under investigations by the Justice Department for their sale of flawed mortgage securities before 2008, but settlements in those cases are expected to be much smaller than the big sums extracted from Bank of America (BAC -1.8%), JPMorgan Chase (JPM -2%) and Citigroup (C -2.2%).
- Another sign that the big bank cases may be winding down: Tony West, who was Holder’s point man in the bank settlement talks, recently left the Justice Department to join PepsiCo as its general counsel.
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. 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%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Jun. 20, 2014, 2:33 PM
- A deal between Ocwen Financial (OCN +0.9%) and the New York Dept. of Financial Services is near, reports Inside Mortgage Finance, with a source saying the Wells Fargo (WFC) matter "will come to a head shortly. That source also questions whether Ben Lawsky will charge Ocwen with anything at all.
- To review: New York DFS chief Lawsky - amid an investigation into Ocwen's servicing practices - put a moratorium on Ocwen's purchasing any more packages of mortgage servicing rights, including a $2.7B deal with Wells Fargo.
- Ocwen was up nearly 3% right after the rumor hit the wires, but has given back much of the gain.
May 5, 2014, 10:20 AM
- A check of the global banks finds the group pacing market declines in morning action after Friday night's warning on Q2 trading revenue from JPMorgan (JPM -2.2%).
- Nomura's Steven Chubak is first out with lower JPMorgan earnings estimates.
- Jim Cramer sums up sentiment: "This has been a house of pain. You can't own these right now. You just can't."
- Morgan Stanley (MS -1.9%), Goldman Sachs (GS -1.5%), Citigroup (C -1.2%), and Bank of America (BAC -1%), Deutsche Bank (DB -1.2%). Far less trading dependent than the other Too Big Too Fails is Wells Fargo (WFC -0.2%).
- The iShares DJ U.S. Broker-Dealer ETF (IAI -1.2%)
- XLF -0.7%, KBE -0.8%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
Apr. 23, 2014, 2:45 PM
- BNY Mellon (BK +2.1%) has hired Goldman Sachs to find a buyer for the unit, reports Bloomberg, and is expected to begin receiving offers in about a month. The corporate trust arm assists companies with making payments on debt they issue as well as helping customers recover funds in event of default.
- The business services about $12T in outstanding debt, with 3.5K employees at 61 global offices, but has become less lucrative since the financial crisis made the packaging and selling of loans a more difficult business. Possible buyers could be large commercial banks looking to build out their own trust business such as Bank of America (BAC), U.S. Bancorp (USB), Wells Fargo (WFC), or PNC Financial, says Guggenheim's Marty Mosby.
- On a recent earnings call, BNY management said run-off in the unit would cut annual revenue by $50M-$75M annually, roughly 0.5% of total bank revenue.
WFC vs. ETF Alternatives
Wells Fargo & Co is a diversified financial services company. It provides retail, corporate and commercial banking services through banking stores and offices, the internet and other distribution channels to individuals, businesses and institutions.
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