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Financial Select Sector SPDR ETF (XLF)

- NYSEARCA
  • Jun. 18, 2014, 9:10 AM
    • Sometimes providing an early window into the results for publicly traded investment banks, Jefferies Group - owned by Leucadia National (LUK) - posted a 55% surge in earnings to $61.3M for the quarter ended May 31. Revenues gained 9.8%.
    • Fixed-income trading revenue fell just 5%, and overall trading revenue rose 6.5% thanks to a 25% jump in equities trading. Investors are bracing for double-digit declines from the larger banks.
    • Investment banking revenue of $331.M grew 19%, with capital markets revenue of $230.7M up 23%, and CEO Richard Handler says Jefferies is continuing to grow the headcount on its investment banking team.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
    | Comment!
  • Jun. 16, 2014, 11:52 AM
    • A guarded "no," argue KBW's Frederick Cannon and Matthew Dinneen. "It is beginning to be difficult to envision an environment where earnings headwinds, regulatory pressure, the structure of interest rates and investor sentiment get worse for universal banks ... [Further] credit conditions are likely to improve through 2015. Thus it is a good time, in our view, for contrarians to take another look at universal banks."
    • RBC's Jonathan Golub has 4.5 reasons to like the banks: 1) Rising rates will benefit; 2) Loan growth is set to accelerate (the team notes eased C&I lending standards); 3) Capital returns; 4) Credit improvement; 4.5) M&A activity is picking up, through trading business remains sluggish.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
    | 1 Comment
  • Jun. 6, 2014, 10:42 AM
    • Pushing back against French disgust over the possible $10B fine to be levied against BNP Paribas (BNPQF +0.6%), sources at Justice let leak to Reuters that they initially wanted a $16B penalty.
    • To put the $10B in perspective, BNP earned about $11.2B last year, and getting a $2B slice of that $10B will be the NY State Dept. of Financial Services, whose annual budget is $552M. BNP has reserved $1.1B against the fine.
    • Forgetting the Hollande government for a moment, bank executives are no doubt looking on in alarm at these massive fines being tossed about like nickels and dimes. "I think everyone realizes that it's an exuberant market," says a defense lawyer who has been involved in settlements with the DOJ. Maybe the banks should just take their chances at trial?
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, FINZ, KBWC
    | 3 Comments
  • Jun. 3, 2014, 9:07 AM
    • With multi-billion dollar penalties for banks being thrown about like nickels and dimes - the latest being BNP Paribas facing a $10B hit - the ECB is considering adding the impact of fines to its stress tests, reports the WSJ.
    • The ECB is trying to asses whether lenders have set enough aside in reserves for the payouts. If banks were to be found wanting, it could mean the need for additional capital raises. BNP makes a good example: In February, it said it had $1.1B reserved for the U.S. penalty, but two months later warned this may not be nearly enough. Now the figure is up to $10B, and executives at banks all over are watching nervously.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, FINZ, KBWC, EUFN
    | 3 Comments
  • May. 28, 2014, 2:16 PM
    • The agency will have fewer of its people stationed in the offices of the largest U.S. banks, instead bringing the workers back to OCC offices where they can develop a broader perspective on what may be happening in the financial system.
    • The move comes after Comptroller Thomas Curry - who took the reins in 2012 - brought in external consultants to review  the OCC's examination program which failed to sniff out much in the way of systemic risk ahead of the financial crisis.
    • This action stands in contrast to that of regulators like the FRBNY (which also whiffed on the financial crisis), which is boosting its on-site presence at banks.
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, KBWR, RWW, RYF, KRS, FINZ
    | 1 Comment
  • May. 28, 2014, 1:05 PM
    • Banks' Q1 net income of $37.2B fell 7.7% from a year ago, according to the FDIC, which took the measure of 6,730 U.S. lenders. It's just the 2nd time in the last 19 quarters that Y/Y income has declined.
    • Behind the fall was a plunge in mortgage business, with income from the sale, securitization, and servicing of 1-4-family mortgages of $3.5B falling from $7.5B in 2013. Bank trading revenue also took a hit - falling 18.3% from a year ago.
    • FDIC Press Release
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, FNCL, KME, FINU, RWW, RYF, FINZ
    | 1 Comment
  • May. 21, 2014, 3:10 PM
    • It's only about the "fifth inning" of mortgage investigations, says Michael Stevens, in a phrase likely to send a chill through the boardrooms of banks across the country. Stevens is the FHFA's acting inspector general, and Bloomberg's Jody Shenn - in attendance at the MBA event where Stevens is speaking - says there was a "loud, collective gasp" from the crowd when he uttered that line.
    • Stevens says investigators have found improper actions "not only occasionally, but in the end, with almost every" deal examined. “I don’t see anything in the near future that’s going to wipe the slate clean with all of the investigations.”
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, FNCL, KBWB, KME, RKH, FINU, QABA, KRU, KBWR, RWW, RYF, FINZ, KRS
    | 3 Comments
  • May. 20, 2014, 2:54 PM
    • "Multiple currencies" have been subject to attempted manipulation, says Raimund Roseler, head of banking supervision at Germany's BaFin. Those targeted tended to be the smaller currencies as opposed to large ones like the dollar and euro, he adds.
    • The news comes on the same day the EU charged three banks for anti-competitive behavior in interest rates and one day after Credit Suisse plead guilty to U.S. charges of tax evasion. Two months back, Swiss competition watchdog Weko became the first regulator to claim it had spotted illegal activity in currencies.
    • “We see continued deterioration of the litigation environment especially in the U.S.," said Deutsche Bank CFO Stefan Krause yesterday. Indeed.
    • Previously: EU charges trio of banks over rate-rigging
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
    | Comment!
  • May. 16, 2014, 2:57 PM
    • The KBW Bank Index (ETF: KBE) is off about 8% from early April, with the performance of high-profile members like BofA, JPMorgan, Citigroup, Goldman is even worse (though Wells Fargo remains close to an all-time high).
    • It used to be, writes Michael Santoli, bank stock action was key to gauge the broader health of the market, but few are fretting now. Instead attention is being paid to the slides in the Russell 2000, high-flying growth names, and Treasury yields.
    • Rather than saying anything about the economy, the drop in bank shares could be more about thinning out an easy trade (long) that got too crowded. The latest BAML fund manager survey shows pros as big sellers of bank names in the last few weeks, dropping their allocations to a 10-month low. Even with the selling, their exposure to the sector remains far above the national average.
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, PFI, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS
    | 1 Comment
  • 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
    | 16 Comments
  • Apr. 28, 2014, 11:57 AM
    • Financial ETFs are the worst performers today thanks to Bank of America's near 5% dive in the wake of the suspension of its capital return plan. BofA is a top-10 holding of no fewer than 28 of about 880 equity-based ETFs tracked by S&P Capital IQ.
    • The Financial Sector SDRP (XLF -0.8%) has 6.35% of its AUM in Bank of America, the Vanguard Financials ETF (VFH -0.4%) has a 5.1% weight, and the iShares U.S. Financials ETF (IYF -0.4%) 4.8%. The SPDR KBW Bank ETF (KBE -0.9%) has a 1.92% weighting.
    • Previously: Black eye: BofA suspends buyback, dividend hike
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, PFI, FXO, FNCL, KBWB, FINU, RWW, RYF, PSCF, FINZ, KBE
    | 1 Comment
  • Apr. 25, 2014, 7:41 AM
    • Bank of America (BAC) is 1.1% lower in premarket action after last night's leak of the DOJ seeking more than another $13B out of the hide of shareholders over legacy mortgage issues, according to Bloomberg. The settlement would come on top of the $9.5B agreed to by the bank to resolve FHFA claims, and a deal could come within the next two months, according to sources.
    • Most of the loans in question became BofA's problem after it purchased Countrywide and Merrill Lynch - one made the punk loans and the other packaged them into MBS.
    • This deal - which would also resolve state AG charges - would tower over JPMorgan's eye-popper of a $13B settlement from last year, which included $4B for the FHFA.
    • They're coming for your banks next: There are another eight lenders under investigation by the DOJ and state attorneys general over similar charges.
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, PFI, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS, AIRR
    | 45 Comments
  • Apr. 22, 2014, 1:08 PM
    • The average compensation at the OCC and the CFPB in 2012 was $190K, writes the AEI's Paul Kupiec, which towers over the average salary of about $50K for bank employees. Is it the special skills of regulators? Probably not. OCC secretaries average about $80K per year and FDIC limo drivers pull down $82K. Human resources management trainees at the CFPB make about $111K.
    • In 2012, 68% of FDIC and CFPB staff - and 66% at OCC - made more than 100K per year, with 19% earning over $180K. Less than 7% of employees at these agencies earn less than 50K - put another way, 93% earned more than the average banker's salary in 2012.
    • Who pays? Bank shareholders (and customers), mostly, through deposit insurance premiums and examination fees levied by the agencies. The CFPB is funded through the Federal Reserve (which doesn't disclose pay, but it's likely even higher than the other regulators).
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, PFI, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS, AIRR
    | 4 Comments
  • Apr. 11, 2014, 10:52 AM
    • Overall traffic to branches was strong in Q1 despite the brutal winter weather (JPM's CFO notably blamed the weather for having a role in its weak Q), says Wells Fargo (WFC +2%) CFO Tim Sloan on the earnings call (his last as CFO). The refinance boom now a bust, Sloan expects a strong purchase market to drive originations growth in Q2. Also commenting on housing/mortgages, CEO John Stumpf notes the number of those buying homes for cash is up.
    • As for acquisitions, management says Wells is in a position to do a big one, but is going to be picky.
    • Wells sits alone among the TBTF banks in the green in morning action. XLF -0.5%, KBE -0.35%
    • Earnings call presentation
    • Previous earnings coverage
    | 2 Comments
  • Apr. 8, 2014, 4:43 PM
    • Finalizing the criteria on the eight largest banks' leverage ratios - a minimum 5% at the holding company level and 6% at the bank subsidiary level - U.S. regulators impose a far tougher standard than international norms of 3%.
    • The eight affected: BK, BAC, C, GS, JPM, MS, STT, WFC.
    • The regulators at work were the Fed, the FDIC, and the OCC, and the Fed's Dan Tarullo indicates he wants to go further, signaling the central bank may boost the risk-based capital surcharge to a higher level than the international standard. The most to lose in this scenario would be investment banks like Goldman and Morgan Stanley who don't have the deposit bases of their retail brethren.
    • Banks have until January 1, 2018 to comply with the new rule.
    • Related ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, KCE, RWW, RYF, PSCF, FINZ, KBWC
    | 19 Comments
  • Apr. 8, 2014, 1:34 PM
    • Growth over the last several quarters has been between 15-20%, says the team, but a major slowdown to a decline of 3-5% in now expected in Q1 (results begin coming in this week). The reasons are the usual suspects: Weak mortgage banking, weak capital markets, and legal and regulatory issues that are going nowhere.
    • Among the banks whose estimates are cut is Bank of America (BAC), now seen earning just $0.02 per share in Q1 from $0.30 previously. For all 2014, EPS should be $0.98, down from $1.06 originally forecast.
    • Other cuts of note: JPMorgan (JPM) now expected to earn $1.30 in Q1 from $1.36. U.S. Bancorp (USB) at $0.72 vs. $0.75. First Horizon (FHN) $0.13 vs. $0.16, and CVB Financial (CVBF) $0.23 vs. $0.24.
    • Having its EPS estimate boosted is Wells Fargo (WFC) to $0.94 from $0.90.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, FINZ
    | 5 Comments
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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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