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The Zacks Analyst Blog Highlights: Deutsche Bank, JPMorgan, Wells Fargo, Capital One and PNC

Zacks Equity Research
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For Immediate Release

Chicago, IL –July 2, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Deutsche Bank DB, JPMorgan JPM, Wells Fargo WFC, Capital One Financial (COF) and PNC Financial PNC.

Here are highlights from Friday’s Analyst Blog:

Bank Stock Roundup: Trade War Fears, Capital Plan Approvals & More

Over the last five trading days, bank stocks have put up a dismal performance as intensifying trade war fears continued to weigh on investor sentiments. Also, first-quarter 2018 GDP numbers were lowered after revision to 2% from 2.2% reported in May.

Also, on Thursday, the Federal Reserve released results of its annual Comprehensive Capital Analysis and Review stress test. The central bank approved capital plans of 32 of 35 biggest banks in the United States.

Of the three remaining banks, Deutsche Bank’s capital plan was rejected while that of Goldman and Morgan Stanley will have to be maintained at the current levels. Further, State Street received conditional approval and is required to enhance its analysis of hypothetical lending risks with big banks.

While the approval of capital plans cheered investors, it was not enough to mitigate the effects of trade war.

Nevertheless, coming to company-specific news, streamlining and expansion of operations continued to dominate the headlines for the last five trading sessions. Apart from that, banks’ efforts to further digitize operations continued.

Important Developments of the Week

1. As part of its efforts to reorganize the investment banking operations in China, JPMorgan announced plans of increasing headcount of its Chinese investment banking team by nearly 40-50%. The target is expected to be achieved within the next two to three years. (Read more: JPMorgan Expands China Investment Bank, Headcount to Rise)

2. As part of its strategy to exit non-core operations across the globe, JPMorgan’s subsidiary — JPMorgan International Finance — is selling its 7.5% stake back to Saudi Investment Bank for 759.3 million riyals ($203 million). The transaction, expected to close by September-end, is still subject to regulatory approvals. (Read more: JPMorgan Unit to Divest 7.5% Stake in Saudi Arabia Bank)

3. JPMorgan has rolled out its digital only bank — Finn by Chase — to consumers nationwide to fulfil their everyday banking needs through smartphones. The app will be available to Android users by 2018-end. (Read more: JPMorgan Launches its Online-Only Bank Nationwide)

4. Wells Fargo is slashing 100 jobs in its mortgage operations branch located in Fort Mill due to subdued activity in U.S. housing market. The bank took this decision to better align staff levels with present sales volume. (Read more: Wells Fargo Cuts Jobs on Declining Mortgage Originations)

Additionally, Wells Fargo has laid off another 130 employees who worked in Twin Cities mortgage as a response to declines in origination volume, foreclosures and rising mortgage rates. On the other hand, Wells Fargo has introduced a new credit card rewards program to compete with other major banks that provide benefit-heavy cards. (Read more: Wells Fargo Cuts Mortgage Jobs, Raises Credit Card Rewards)

Over the last five trading sessions, Capital One Financial and PNC Financial were the major decliners, with their shares falling 2.7% each.

What’s Next?

Over the next four trading days, bank stocks are expected to continue performing in a similar manner as trade war related concerns will likely weigh on investors sentiments.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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