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Bank Stock Roundup: U.S-China Trade Talks Progress, Citi & JPMorgan in Focus

Zacks Equity Research

Over the last five trading sessions, performance of bank stocks was bullish. A number of factors like continued progress in U.S.-China trade talks, and more clarity on Brexit-related matters cheered bank investors.

The optimistic stance was further supported by the U.S. economic data that showed no signs of slowdown in the near term. As banks’ financial health depends on the economy, this boosted investor sentiments, leading bank stocks to rally.

Regarding company-specific news, efforts to expand operations into newer areas and improve market shares in profitable businesses continued in the past five trading days. Additionally, management’s confidence of achieving set targets for this year attributed to the positive market sentiments.



(Read: Bank Stock Roundup for the Week Ending Mar 8, 2019)

Important Developments of the Week

1. Citigroup C expects to achieve the cost control targets in 2019. This was stated by the company’s CFO Mark Mason at an investor conference. Also, he stressed on the importance of technology in the business. Nonetheless, Mason remained pessimistic about the market’s impact on Equities and Fixed Income business in the first quarter of 2019. (Read more: Citi Aims to Gain From Higher M&A Deals & Low Costs in 2019).

2. As part of its broader plan to expand into new markets, JPMorgan JPM expects to open 90 new branches by 2019. Additionally, the bank intends to hire roughly 700 employees to manage these branches. (Read more: JPMorgan to Open 90 Branches in 2019, Hire New Staff).

3. Wells Fargo’s WFC CEO Timothy Sloan has received a total compensation of nearly $18.4 million for 2018, up nearly 5% year over year. Per the company’s proxy statement, the increase was mainly driven by $2 million given as bonus based on his full-year achievements. Despite the achievements, Wells Fargo had been in news throughout 2018, either for involvement in a scandal or for the Federal Reserve’s move to restrict asset growth. (Read more: Wells Fargo Awards CEO With Pay Hike, Gives Performance Bonus)

4. In an aim to further capture lucrative exchange-traded funds (ETFs) market, JPMorgan announced that the JPMorgan BetaBuilders U.S. Equity ETF is expected to have a fee of 0.02%. With this, the bank launched America’s lowest-fee ETF yet to be offered, pushing the fee war to lower levels. (Read more: JPMorgan to Offer Lowest-Fee ETF With US Stock Market Exposure).

Price Performance

Here is how the seven major stocks performed:
 

Company

Last Week

6 months

JPM

2.3%

-5.8%

BAC

2.8%

-2.0%

WFC

1.1%

-6.4%

C

3.3%

-7.8%

COF

2.3%

-14.3%

USB

1.7%

-3.0%

PNC

2.3%

-6.3%


Over the last five trading sessions, Citigroup and Bank of America BAC were the major gainers, with their shares rallying 3.3% and 2.8%, respectively. Also, shares of JPMorgan, Capital One COF and PNC Financial PNC gained 2.3% each.

In the past six months, shares of Capital One Financial and Citigroup have depreciated 14.3% and 7.8%, respectively. Further, shares of Wells Fargo have lost 6.4%.

What’s Next?

Over the next five trading days, performance of bank stocks will likely largely depend on further clarity on several matters plaguing the U.S. and global markets.

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