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Financial Select Sector SPDR ETF (XLF)

  • Mar. 4, 2013, 11:55 AM
    Expect gradual, but not outsized jumps in capital returns from the banks this year, says Goldman (stress tests results are due Thursday, capital return decisions due March 14). Management teams are likely to be conservative in their requests from the Fed as "taking a mulligan" - i.e., resubmitting a plan after being shot down - is not seen as a viable option.
  • Feb. 27, 2013, 8:08 AM
    Those believing in strong economic recovery may have interest in Ken Heebner's CGM Focus Fund. Heebner was short $300M in Treasurys (21% of fund) at year's end, up from $190M at the end of Q3, and $80M at the end of June. Most of the rest of the fund is divided between the banks and homebuilders. TLT -2.1%, XLF +5.9%, XHB +4.4%, S&P 500 +5.3% YTD.
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  • Feb. 22, 2013, 2:34 PM
    Fat mortgage profits drove earnings at financials last quarter, but maybe not this one. Compass Point estimates gain-on-sale margins - the amount lenders make packaging and selling mortgages - could be down 40% in Q1. It's not just the big banks getting hurt. Profits at originators like FBC, NSM, PMT, EVER, and PHH could be most damaged, says Compass Point.
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  • Feb. 21, 2013, 10:52 AM
    Strong performance in the financial sector (XLF) since last summer has been almost completely concentrated in the big caps, says Bespoke, but small and mid-cap financials have begun to show relative life over the past couple of weeks. Another strong sector - materials (XLB) - has been led by the smaller stocks, but everything has fallen off a cliff recently.
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  • Feb. 20, 2013, 7:07 AM
    The average-loan-to-deposit ratio at the 8 largest U.S. banks fell to 84% in Q4 from 87% a year earlier and 101% in 2007, according to Credit Suisse. At just 61%, JPMorgan (JPM) had the lowest ratio (now we know why the London Whale was so busy; who's putting that money to work now?). "Bankers out there are drowning in liquidity," says the ABA VP. "We're dying to make loans."
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  • Feb. 19, 2013, 11:42 AM
    The technicians call it resistance and the financial sector (XLF, KRE) is up against it in a big way, says BAML (h/t John Melloy).
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  • Feb. 15, 2013, 1:10 PM
    While thinking about the XLF brings to mind the big banks, Berkshire Hathaway (BRK.B) has climbed to become the ETFs 2nd-largest holding at 8.32%, just behind JPMorgan at 8.6%. Berkshire also ranks 2nd in the global financial ETF (IXG) - which allocates 3.29% of the fund to the stock, just behind HSBC.
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  • Feb. 15, 2013, 9:32 AM
    New FASB proposals could give banks more room to value certain assets on their books with models, rather than market values. The proposals would also eliminate the perverse DVA adjustment, in which banks record a profit as their credit situation worsens (and a loss as it improves). Stakeholder comments are due by May 15.
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  • Feb. 15, 2013, 7:38 AM
    "The Goldilocks era of post-crisis M&A has never been an if, but a when," says JPMorgan (JPM) vice-chair James Lee. "CEOs are declaring that day has come." Including the Berkshire buy, $40B in deals were announced yesterday and $140B this month. Transaction volume is up 27% Y/Y vs. an 8% slump for 2012. It should mean sweet profits for the newly lean banks.
  • Feb. 13, 2013, 3:08 PM
    Deep-value investor Richard Pzena (PZN) remains bullish on the big banks, calling their improved situation nowhere near reflected in their share prices. Big-cap tech is also a favorite as it's now investor habit to price these top-quality, cash-flow heavy businesses at a discount to the market. He notes finance and tech makes up 55% of his portfolio vs. 32% for managers identifying themselves as large-cap value.
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  • Feb. 13, 2013, 7:45 AM
    Are more gains in store for the banks after the President last night gave a push to the stalled Menendez-Boxer bill which would streamline the refinancing process for Fannie and Freddie borrowers? BAC +0.9%, C +0.3%, JPM +0.5% premarket (no trades for WFC).
  • Feb. 12, 2013, 3:00 PM
    New CFPB rules aimed at protecting consumers and investors from themselves as well as bankers could over time eliminate half of the country's mortgage market, suggests CoreLogic's Sam Khater. The good news: Any loans that can actually get made will have virtually no risk. 
  • Feb. 11, 2013, 9:07 AM
    One of the most common mistakes investors make is going with the known rather than the best ETFs, says Matt Hougan, speaking at Index Universe's Inside ETFs conference. One example is using FXI for China exposure (discussed here, try CAF instead). Another: Buying XLF for financials avoids small caps. Look to IYF for broader exposure.
  • Feb. 5, 2013, 12:11 PM
    Bank of America (BAC +2.9%) and Citigroup (C +1.8%) both have 30% upside this year, says Guggenheim's Marty Mosby, with big dividend hikes - BofA to $0.05 quarterly from $0.01, Citi to $0.25 - a major catalyst. Oppenheimer urges caution on capital returns. "The banks (will) get let out of the penalty box only very slowly."
  • Jan. 29, 2013, 12:00 PM
    Now with Rafferty Capital Markets after Rochdale Securities blew up last year, Dick Bove remains bullish on the banks, seeing 30% upside in BAC, C, and JPM over the next 12 months. Bove says he's making a contrarian call, but needs to be reminded it's not 2011 anymore. Nobody doubts the survival of the big names and most of his favorites have posted big gains of late.
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  • Jan. 28, 2013, 11:00 AM
    Bank debt is back with lenders' paper set to overtake that of industrial companies as the safest in the U.S. corporate bond market for the first time since the financial crisis. Investors are currently demanding just 16 bps more premium over a benchmark from banks, compared to 365 bps 4 years ago.
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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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