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Financial Select Sector SPDR ETF (XLF)

- NYSEARCA
  • 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
  • Apr. 8, 2014, 4:15 AM
    • Regulators are due to vote today on whether to increase the "leverage ratio" for the eight largest U.S. banks to 5-6% of their total assets. The Basel III standard is 3%.
    • The move would force banks to add tens of billions of dollars in loss-absorbing capital, although many firms have already been bulking up in anticipation of the rule change.
    • Meanwhile, the Fed has given banks two extra years - until July 2017 - to ensure that their collateralized loan obligations (CLO) comply with the Volcker rule's restrictions on speculative investments. The extension is a reaction banks' fears that selling their CLOs would lead to substantial losses.
    • Relevant tickers: JPM, C, BAC, WFC, GS, MS, BK, STT, ZION
    • Related ETFs: FAS, XLF, FAZ, UYG, KRE, KBE, VFH, IYF, SEF, IAT, IYG, PFI, FXO, KBWB, RKH, QABA, RWW, KRU, FINU, KBWR, RYF, PSCF, FNCL, KRS, FINZ
    | 1 Comment
  • Apr. 3, 2014, 10:41 AM
    | 2 Comments
  • Apr. 2, 2014, 3:24 PM
    • A few years after public and regulatory outcry forced banks to reverse course on overdraft fee hikes, lenders are lifting them again, with economic research firm Moebs Services putting the median fee at $30 in 2013, up $1 from 2012, and $4 from 2009. "Banks have a revenue gap that needs to be recouped," says Bankrate's Greg McBride.
    • Call it an unintended consequence of new regulation. The Fed in 2010 stopped banks from automatically charging overdraft fees on debit-card and ATM transactions, and among Dodd-Frank's rules is an amendment lowering debit-card fees charged to merchants. Overdraft fees are where the money is in checking, with KBW estimating banks generated $31.9B of overdraft revenue in 2013, well off from a peak of $37.1B in 2009.
    • Among those hiking: U.S. Bancorp (USB) boosted its fee to $36 from $35 last August and Boston Private Bank (BPFH -0.3%) to $30 from $25.
    • Banks like Wells Fargo (WFC -0.1%) and JPMorgan (JPM -0.4%) offer overdraft-protection programs where money is transferred from another account to cover the shortfall. The fee at Wells is $12.50 for each day it's used; Chase charges $10.
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, AIRR
    | 14 Comments
  • Mar. 28, 2014, 11:41 AM
    • Count Credit Suisse's Moshe Orenbuch as surprised about the Fed's denial of Citigroup's (C -0.5%) capital return plan. Maybe Citi is just too tough for regulators to get their arms around as it is the most complicated of all the bank holding companies.
    • Included in the Credit Suisse report is this handy chart of dividends, buybacks, and payout ratios for all of the CCAR banks for 2013 and 2014. Things are loosening up - the median payout ratio (includes dividends and buybacks) this year of 71% compares to 59% in 2013. The dividend payout ratio rises to 26% from 23%.
    • It helps to be smaller - among the TBTFs, Citi's payout ratio is just 8%, BofA (BAC) 37%, JPMorgan (JPM) 56%, Morgan Stanley (MS) 41%. Wells Fargo is above the median though, being allowed a payout of 79%.
    • The regionals (KRE), trust banks, and credit card companies - for the most part - were all allowed payout ratios above the median.
    • The strongest capital returns vs. CS's expectations are those for BNY Mellon (BK), Capital One (COF), KeyCorp (KEY), Huntington Bancshares (HBAN), PNC Financial, and Wells Fargo.
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, AIRR
    | 4 Comments
  • Mar. 27, 2014, 8:36 AM
    • It's a slow grind for bank capital returns (at least those subject to the CCAR), notes Goldman' Richard Ramsden, with payout ratios boosted just four percentage points to 62% this year. There are clear winners, he says: The credit card companies led by AXP and COF and the trust banks led by BK. Regional banks (KRE) boosted returns but generally fell short of expectations (with HBAN and PNC being the exceptions). Worst-performing were the TBTFs, though JPM and WFC were positives.
    • "CCAR highlighted the challenges large-caps have in returning excess capital," he says, with Citigroup's (C) failure a reminder the process is unpredictable. With all that excess capital remaining on the balance sheet, Ciit's 2015 goal of a 10% ROTCE appears unlikely to be met.
    • For Bank of America (BAC), it's resubmission - a better outcome than outright failure - reminds that even well-capitalized banks are "bound by stressed capital and could have trouble returning outsized capital."
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, AIRR
    | 6 Comments
  • Mar. 27, 2014, 7:25 AM
    • Both Bernstein and KBW remove Outperform ratings on Citigroup (C) the morning after its capital return plan was rejected by the Fed for "qualitative" reasons. One wonders whether this disappointment wasn't already priced in as Citi has underperformed this year, and for some time been the only one of the major banks trading below book value. Shares are off 5% in premarket action.
    • Overall, the bank capital returns announced yesterday are below expectations, says Compass Point's Kevin Barker, but Huntington Bancshares (HBAN) - which boosted the dividend 20% and announced a buyback for about 3% of the float - was better than hoped.
    • XLF -0.1% premarket
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, FNCL, RKH, QABA, FINU, KRU, RWW, KCE, KBWR, RYF, PSCF, KRS, FINZ, KBWC, AIRR
    | 2 Comments
  • Mar. 26, 2014, 2:51 AM
    | 15 Comments
  • Mar. 21, 2014, 3:10 PM
    • It's a sluggish day for the TBTFs after yesterday's post-close stress test results. Satiated investors may be selling the news, or perhaps the lenders didn't pass with enough flying colors.
    • Credit Suisse's Moshe Orenbuch's team had estimated a Tier 1 common ratio under the severely adverse scenario of 8.6% for Bank of America (BAC -1.5%), but it came in at just 6% from the Fed - only 100 basis points higher than the minimum. Citigroup (C -0.1%) - estimated at 10% - came in at 7%, JPMorgan (JPM +0.4%) - estimated at 6.5% - came in at 6.3%.
    • Morgan Stanley (MS -0.5%), meanwhile, missed CS's estimate by a whopping 400 basis points, while Goldman missed by 170. "Not surprisingly, the capital markets sensitive banks appear on the lower end of the range given losses associated with a large counterparty default, in addition to higher trading losses vs. regional bank peers," says Orenbuch.
    • Jefferies' Ken Usdin says the lower numbers confirm the "teeth" of the stress tests. "Our initial take is that discrepancies were largely driven by higher charge-off and balance sheet growth assumptions used by the Fed."
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, KCE, RYF, PSCF, FINZ, KBWC
    | 5 Comments
  • Mar. 21, 2014, 1:25 PM
    • Financial Select Sector SPDR ETF (XLF) announces quarterly distribution of $0.0829.
    • 30-day SEC yield of 1.44% (as of 03/19/2014).
    • For shareholders of record Mar 25; Payable Mar 31; Ex-div date Mar 21.
    | Comment!
  • Mar. 20, 2014, 4:13 PM
    • Everybody (except Zions) passed, but among the Too Big To Fail banks, Bank of America (BAC) is the weakest performer under the Fed's severely adverse scenario, with its tier 1 common ratio dropping to 6.3%. Citigroup (C) goes to 7%, Goldman Sachs (GS) to 8.9%, JPMorgan (JPM) to 6.7%, Morgan Stanley (MS) to 7.6%, and Wells Fargo (WFC) to 8.2%.
    • The average tier 1 ratio for all banks tested is 8.4%.
    • There's not a whole lot of after-hours movement in any of the TBTF names.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, FINZ
    • Full report
    | 7 Comments
  • Mar. 20, 2014, 10:54 AM
    • Much of the financial sector is lit up bright green, continuing to outperform following yesterday's suggestion by the FOMC and Janet Yellen that rate hikes could come sooner than expected. XLF +1.1%, KBE +1.6%, KRE +1.6%.
    • At new 52-week or even multi-year highs are JPMorgan (JPM +2.3%), Wells Fargo (WFC +1.7%), Morgan Stanley (MS +1.4%), and Bank of America (BAC +1.6%).
    • Regional lenders: U.S. Bancorp (USB +1%), Huntington (HBAN +1.5%), PNC (PNC +1.3%), BB&T (BBT +1.5%), Fifth Third (FITB +1.8%), First Niagara (FNFG +2.1%).
    • Leading among the life insurers are Lincoln National (LNC +1.9%), Protective Life (PL +1.6%), Manulife (MFC +1.2%), and Sun Life (SLF +1.1%).
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KBWI, KBWP, KRS, FINZ
    | 5 Comments
  • Mar. 20, 2014, 6:56 AM
    | Comment!
  • Mar. 19, 2014, 3:13 PM
    • A check of sectors following the FOMC statement and updated projections suggesting a quickened pace of rate hikes in the future finds the banks and life insurers notably moving higher. Both groups have struggled earning a spread amid ZIRP and are positively levered to higher rates.
    • Lenders: Bank of America (BAC +1%), Citigroup (C +1%), JPMorgan (JPM), Regions (RF +1.7%), KeyCorp (KEY +0.9%), SunTrust (STI +0.7%).
    • Life insurers: MetLife (MET +1%), Prudential (PRU +0.7%), Lincoln National (LNC +1%).
    • Related ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, KIE, SEF, IYG, IAK, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, KBWP, KBWI, FINZ, KBE, KRE
    • Not necessarily positively levered to higher rates are the mortgage REITs (REM -1.6%): Annaly (NLY -1.8%), American Capital (AGNC -1.7%), (MTGE -1.9%), Armour (ARR -1.3%), Two Harbors (TWO -2%) CYS Investments (CYS -3.3%), Capstead (CMO -1.3%), MFA (MFA -1.8%).
    • Related ETFs: MORT, MORL
    | 14 Comments
  • Mar. 13, 2014, 10:40 AM
    • "To us, the year started slow," says Deutsche Bank (DB -0.9%) CFO Stefan Krause. "Obviously through political uncertainty we started to have market uncertainty again and a slowdown in business."
    • Krause's warnings of a continued slowdown in investment banking business echo those of Citigroup and JPMorgan over the last couple of weeks.
    • Fixed income revenue has been slowing since May, with some banks (notably Goldman) insisting the fall is temporary, but others say boosted capital requirements has squeezed margins and left overcapacity, meaning more job cuts as banks shrink and restructure.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, FINZ
    | 2 Comments
  • Mar. 7, 2014, 4:35 PM
    | 2 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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