|Bid||34.85 x 2900|
|Ask||34.71 x 3200|
|Day's Range||33.68 - 34.81|
|52 Week Range||22.66 - 34.81|
|Beta (5Y Monthly)||1.64|
|PE Ratio (TTM)||12.78|
|Earnings Date||Jan 15, 2020|
|Forward Dividend & Yield||0.72 (2.14%)|
|1y Target Est||34.02|
Bank of America is incentivizing customers to do more of their day-to-day simple transactions digitally by paying them $15. It is cheaper for the bank and informs customers about options they may not know.
(Bloomberg Opinion) -- It looks as if after all the talk, all the back-and-forth and all the market swings, the U.S. and China have finally reached the terms of a “phase-one” trade deal.The message from the world’s biggest bond market: Don’t get too excited about what that means for the economic outlook.For the first half of the U.S. trading session, long-term U.S. yields surged by 10 basis points, on pace for one of the three largest increases of 2019, on the news that U.S. negotiators were offering to cut existing tariffs on Chinese imports by 50% and also cancel the tariffs that were set to take effect on Dec. 15. But then the Treasury Department auctioned $16 billion of 30-year bonds at 1 p.m. New York time, which provided a reality check of what a small agreement between the world’s two largest economies would mean.Not only did the auction price at a yield 2 basis points lower than the market was indicating before the offering, but primary dealers, which are required to submit bids, took a record-low 15.5% share. That means investors who weren’t obligated to buy the longest-dated Treasuries rushed to take advantage of the trade-induced sell-off. Simply put, this sort of demand is rare. Yields ended the trading session off their highs.It’s perilous to read too much into a single Treasury auction. And last month’s 30-year bond sale also set a record for low primary-dealer takedown, at 20.7%, so Thursday’s result could just be continuing that trend.Still, if investors believed that this potential trade deal was truly a game-changer for markets and the global economy, I doubt they’d be so shortsighted to jump at a 10 basis-point move to the highest yield in a month. The effective duration of 30-year Treasuries is about 22 years, according to ICE Bank of America Merrill Lynch index data, meaning that another 10 basis-point increase would saddle owners of these new bonds with a 2.2% loss. If yields rose in the next six months to where they were as recently as April, bondholders would stand to lose more than 20%.I once called long-dated Treasuries one of the most dangerous parts of the bond market. And in July 2016, when yields hit record lows, it was for good reason: It takes a tiny shift in interest rates to cause huge gains or losses. There’s no credit spread to fall back on, as there is with corporate bonds. They’re not like two- or three-year notes, which are closely tethered to the Federal Reserve’s policy decisions. Rather, 30-year bonds are entirely subject to the whims of markets. Case in point: Recession fears reached a fever pitch in August, and long-bond yields tumbled to a record low. For a brief moment, 30-year Treasury bonds yielded less than three-month bills.Judging by the Fed’s confidence coming out of its meeting this week, the economic doomsday scenario appears to be in the rearview mirror. But the prospect of a somewhat stagnant economy is still the consensus. A Bloomberg survey shows analysts expect U.S. real gross domestic product to grow just 1.8% in 2020, the slowest pace since 2016. That could change with a trade agreement. Tom Orlik, chief economist at Bloomberg Economics, said “a deal that takes tariffs back to May 2019 levels, and provides certainty that the truce will hold, could deliver a 0.6% boost to global GDP.”For now, the deal seems to be that the U.S. will not introduce a new wave of tariffs on about $160 billion of consumer goods on Dec. 15 in exchange for a promise by China to buy more U.S. agricultural goods. Officials also apparently discussed possible reductions of existing duties on Chinese products. The bond market has already voiced its opinion: Not impressed.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Saudi Aramco is poised to pay a combined $64 million to the banks that arranged the world’s largest initial public offering, a letdown for the Wall Street firms that pitched aggressively for a spot on the deal, people with knowledge of the matter said.The Gulf oil giant plans to pay the top local banks on the deal -- known as joint global coordinators -- 39 million riyals ($10.4 million) apiece, according to the people. The top foreign banks on the deal are set to each get 13 million riyals, or the equivalent of $3.5 million, the people said, asking not to be identified because the information is private.The figures represent the base fee being paid by Aramco, which will decide the amount of discretionary incentive fees at a later date, the people said. If Aramco opts to dole out additional money, most of it would likely go to the domestic banks that brought in the bulk of the IPO orders.Aramco raised $25.6 billion in its share sale, which became a local affair after foreign fund managers shunned its premium valuation. The base fee, representing 0.25% of the funds raised, pales in comparison to other large deals.IPO banks globally earned average fees equal to 4.1% of the deal size this year, up from 3.6% last year, according to data compiled by Bloomberg. Chinese internet giant Alibaba Group Holding Ltd., which raised $25 billion in its 2014 IPO, paid about $300 million to its underwriters including performance fees.Saudi Arabia didn’t need the Wall Street firms’ international networks after it scrapped roadshows outside the Middle East, turning instead to local retail buyers and wealthy families to shore up the deal. The foreign underwriters on the deal will barely make enough to cover their costs, Bloomberg News has reported.Aramco will pay local banks serving as bookrunners, a more junior role, about 5 million riyals each while foreign banks in that position will be paid about 2 million riyals apiece, the people said. The company declined to comment.(Updates with details of fee breakdown in third paragraph.)\--With assistance from Dinesh Nair.To contact the reporters on this story: Sarah Algethami in Riyadh at email@example.com;Matthew Martin in Dubai at firstname.lastname@example.org;Archana Narayanan in Dubai at email@example.comTo contact the editors responsible for this story: Ben Scent at firstname.lastname@example.org, ;Stefania Bianchi at email@example.com, Michael HythaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Houston entrepreneurs are concerned about rising health care costs and the strength of the U.S. dollar going into 2020, according to a recent Bank of America report.
The Fed kept interest rates unchanged at the Federal Open Market Committee (FOMC) Meeting and forecasts reflect no change of rate throughout 2020.
Saudi Aramco’s shares rose 10 per cent during its second day of trading on Thursday, pushing the state oil group’s valuation above $2tn. Shares climbed by the maximum daily limit to SR38.7 before profit-taking pushed the price down, according to the website of Riyadh’s Tadawul stock exchange. for the company has long been sought by Saudi Arabia’s ambitious Crown Prince Mohammed bin Salman, and Riyadh has worked to backstop the flotation to ensure its success.
Bank of America Corp (NYSE: BAC ) expanded its free trading offering Monday with the elimination of commissions on stock, ETF and options trades. This development follows Robinhood’s pioneering of the ...
Bank of America today announced that its artificial intelligence (AI)-driven virtual financial assistant, Erica®, has surpassed 10 million users since its nationwide rollout in June 2018 and is on track to complete 100 million client requests in the coming weeks. These milestones coincide with the introduction of several new Erica insights within the bank’s award-winning mobile app that offer clients personalized, proactive guidance to help them stay on top of their finances.
(Bloomberg Opinion) -- For those following 2020 market outlooks, the past two days have been dominated by BlackRock Inc. The world’s largest money manager began unveiling its calls for the coming year on Monday, and on Tuesday it added TV appearances and journalist discussions with its most senior investors and strategists around the globe.The broadest takeaway is that 2019’s “extraordinary returns” across asset classes won’t continue over the next 12 months. That’s not particularly riveting, though, given that BlackRock itself said in 2016 that investors should expect smaller gains for pretty much everything in the coming five years. In 2017, Bill Gross made a similar call. And around this time last year, Ray Dalio, founder of Bridgewater Associates and recent mentor to hip-hop entrepreneur Sean “Diddy” Combs, argued investors “need to prepare for lower expected returns in the future.” After the longest expansion in U.S. history, it’s a fairly safe call to make.A bolder call from the money manager: Inflation poses the biggest risk in 2020 — or, at least, it’s what investors don’t seem to have on their radar. Here’s how BlackRock Vice Chairman Philipp Hildebrand explained it on Bloomberg TV:“The market is not expecting anything around inflation, basically, and I suspect that when we see each other a year from now, look back at this, we will say ‘wow, inflation actually was a bit more of a story than we thought.’ Again, I don’t think we need to worry. I don’t want in any way to paint the picture of dramatic inflation, but I do think when you look at the details, when you look at the employment report, when you look even at the latest European numbers, wage pressures are at peak expansion levels, so I do expect that inflation is one of the underappreciated risks for 2020.”Hildebrand is a former Swiss National Bank president, so he’s intimately familiar with global central bankers’ inability to stoke price growth in the wake of the global financial crisis. Critics might dismiss the outlook for relying on the Phillips Curve and other assumptions that don’t truly stand up to scrutiny in this economy. Just last week, University of Michigan survey data showed Americans expect prices to rise by just 2.3% annually over the next five to 10 years, matching the lowest level on record. The thing is, BlackRock is hardly alone in thinking 2020 might finally be the year inflation stages a comeback. And the advice is simple: Buy Treasury Inflation-Protected Securities.Bank of New York Mellon Corp.’s 2020 macro outlook is titled “Inflation Insurance Is Underrated.” Bank of America Corp.’s best technical trade for next year is to buy U.S. 10-year TIPS breakevens. Even Steven Major at HSBC Holdings Plc, who has one of the lowest year-end 2020 forecasts for 10-year U.S. yields, at 1.5%, said TIPS appear “underappreciated” and “offer attractive diversification properties.” Citigroup Inc. strategists went so far as to raise the specter of stagflation: “We see some upside risks to inflation. If these materialize against a weaker growth backdrop, it would be a bad combination for risk assets.” BlackRock, too, is pondering whether the push toward de-globalization will push prices higher because of supply shocks while economic growth slows. It lists stagflation as a “potential regime shift” from the current one, dubbed “slowdown.”Now, betting on higher-than-expected inflation isn’t as cheap as it was two months ago. The 10-year breakeven rate dipped to 1.47 percentage points on Oct. 8, the lowest in more than three years. It has climbed to 1.7 percentage points since then. The measure reflects the difference between yields for nominal and inflation-linked bonds. When it’s low, it indicates traders don’t see much reason to shield themselves from accelerating price growth over the next decade. The recent peak was 2.2 percentage points in May 2018.This talk about reviving inflation happens to coincide with the recent death of Paul Volcker, the former Federal Reserve chairman who famously tamed double-digit price growth. As David Beckworth, a former economist at the Treasury Department, noted on Twitter, spiraling inflation was viewed by some Americans in the 1970s and early 1980s as the most important issue facing the country.That context is crucial because it’s unclear what a meaningful bump higher in inflation would mean to a general public that hasn’t seen the core consumer price index at 2.5% in more than a decade, or at 3% since the mid-1990s (it peaked at 13.6% in 1980). Would it rattle the American consumer’s seemingly unshakable confidence? Or is this just more of Wall Street and the Fed getting worked up over tenths of percentage points in a measure that some consider detached from reality anyway?Crucially, the Fed appears willing to tolerate higher inflation in something of a “make-up strategy” after years of undershooting 2%. Typically, stocks and other risky assets might balk at quicker price growth on bets that the central bank would raise interest rates. But it’s difficult to even fathom what sort of conditions would make Chair Jerome Powell and his colleagues consider increasing the fed funds rate again after reducing it three times in as many months. That means inflation in 2020 might not produce the usual chain reaction.Even if the inflation rebound story isn’t persuasive, consider this: TIPS are on pace to top Treasuries again in 2019, which would be the third year in the past four that the inflation-linked securities outperformed. They may not be the sexiest investment out there, but in BlackRock’s eyes, TIPS are for winners.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose...
Bank of America chief executive Brian Moynihan has joined a chorus of US bankers predicting a strong end to the year for trading and investment banking. Mr Moynihan told investors on Wednesday that the two divisions would record higher fourth-quarter revenues than a year earlier, a day after upbeat remarks from senior executives at Citigroup, JPMorgan Chase and Goldman Sachs. fourth quarter in some of Wall Street’s biggest businesses in 2018, including double-digit percentage declines in fixed-income revenues at each of the big five banks in a period when investment banking revenues also fell for all major players except JPMorgan.
Wells Fargo (NYSE:WFC) stock has risen over 25% since its August lows. In late September, Wells Fargo announced it had hired a new CEO. And it's safe to say that WFC stock has been on a sort of honeymoon hike since then. But for many investors, questions remain about its difficult fundamentals and relative valuation.Source: Martina Badini / Shutterstock.com The market seems to believe that new CEO Charles Scharf can turn things around at Wells Fargo. He was poached from BNY Mellon (NYSE:BNY) where he was CEO. Scharf also served as the CEO of Visa (NYSE:V) and was a protege of Jamie Dimon, the CEO of JPMorgan Chase (NYSE:JPM). Fortune Magazine wrote a glowing article about his expertise in running financial institutions.But the truth is Scharf hasn't really tackled a company with as many scandals as Wells Fargo. Most of his jobs have been with fairly well-established financial institutions.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWells Fargo has had to deal with numerous scandals over the past decade. Fortune pointed out that these include a fake-accounts scandal, questionable mortgage and auto-lending practice and red flags in its foreign exchange and wealth management businesses. Wells Fargo's Fundamental IssuesA Raymond James analyst recently cut his rating on WFC stock to "underperform," noting that he believes that with the company, "it will get worse before it gets better." In Wall Street speak, that is the equivalent of a "sell" rating. * 10 Best-Performing Growth Stocks of the 2010s Source: Chart by Mark R. Hake The analyst, David Long, said he expects revenue to contract for a fourth straight year in 2020. He also believes that Wells Fargo's profitability in a number of areas will lag its competitors.Moreover, he said that both JPM stock and Bank of America (NYSE:BAC) stock are cheaper than Wells Fargo stock.I looked into these points. Based on estimates provided by Seeking Alpha, 14 analysts expect revenue of just $80 billion (after loan loss provisions) for 2020. This is 7% below the company's $85 billion in 2017.Analysts all predict positive revenue gains for WFC's major competitors. This can be seen in the table to the right. The average cumulative revenue growth over the same four years is 15%, against WFC's expected 7% drop.Source: Chart by Mark R. Hake As interest rates keep falling it's very hard to make revenue rise. Wells Fargo has to become a more attractive place for people to borrow and deposit their money. It will have to erase its damaged image in order for revenue to rise. A Problematic ValuationWells Fargo stock is more expensive than the average of its peers. The table below shows that the average forward price-to-earnings ratio for its competitors is 11 times. This is lower than Wells Fargo's 12.6.Source: Chart by Mark R. Hake Some point out that Wells Fargo has a higher dividend yield than its peers. I looked into this as well. It is true that Wells Fargo's 3.8% dividend yield is higher than its peers. JPM stock has a 2.7% dividend yield, and BAC's yield is 2.2%.But Wells Fargo has a higher dividend payout ratio. It distributes 40% of its earnings, according to Yahoo! Finance. Its peers pay out less of their earnings. Their dividend yields would be closer to Wells Fargo's dividend yield at the same payout ratio.Others point out that Wells Fargo has a robust share buyback policy. That is true. Wells Fargo's capital plan, approved in June by the Federal Reserve, calls for buying back up to $23 billion worth of its shares. That represents about 10% of its market value. Obviously that accounts for a huge portion of the spike in the Wells Fargo stock price since then.But JPMorgan also got approval for a huge share buyback. Its approved plan is for up to $29.4 billion in share repurchases. Although that is a larger program than at Wells Fargo, it represents a lower 6.9% of JPM's stock market value.Wells Fargo is more aggressive with buybacks, but JPM stock is cheaper. I would rather take the cheaper stock. The Bottom Line on WFC StockWarren Buffett recently trimmed the Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B) stake in Wells Fargo stock. Berkshire Hathaway was Wells Fargo's largest shareholder in March when it owned 451.4 million shares or 9.9% of the bank, according to the proxy statement.But now Berkshire only owns 378.4 million shares. That is a reduction of 73 million shares or 16%, in half a year. I believe Buffett thinks it is overvalued.Wells Fargo has not bought back 16% of its shares since March. For example, Berkshire would normally have to trim its stake to stay below 9.9% of the bank's shares outstanding. Otherwise, it would need to get approval to be a bank holding company, according to federal regulations.By my calculations, Berkshire Hathaway's stake in Wells Fargo is now about 9%. This is despite the 5.9% lower number of shares outstanding at Wells Fargo since March. In other words, Buffett has sold into the Wells Fargo share repurchase program.That should tell you a lot. Wells Fargo was the fourth-largest holding at Berkshire Hathaway. Maybe it isn't as important to Buffett anymore.Maybe you should sell too.As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. Mark Hake runs the Total Yield Value Guide which you can review here. The Guide focuses on high total yield value stocks. Subscribers get a two-week free trial. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best-Performing Growth Stocks of the 2010s * 10 Stocks With Little or No Debt to Own for the Next 50 Years * 5 Restaurant Stocks Dominating Holiday Season Foot Traffic The post Ignore the Honeymoon Hike: Wells Fargo Stock Has Already Peaked appeared first on InvestorPlace.
When it comes to investing in bank stocks, a flattening yield curve, Fed rate cuts and illiquid capital markets are typically considered red flags that send investors running for the hills.
Bank of America expands commission-free trading to all self-directed Merrill Edge investors, while Wells Fargo’s online brokerage scraps commissions.
The big run in (JPM) stock is petering out, say analysts at Keefe, Bruyette & Woods. Brian Kleinhanzl at KBW said he still views (JPM) (JPM) as best-in-class in terms of quality, but he thinks investors should own stocks where consensus earnings estimates have the potential to rise. “Looking ahead, we believe that further upward estimate revisions are needed from here in order for JPM to outperform in the coming year and our estimates are roughly in line with consensus for 2020 earnings per share,” Kleinhanzl said.
Bank of America expanded unlimited free trades to all Merrill Lynch individual investors, after Charles Schwab, TD Ameritrade and E-Trade ditched stock and ETF trading fees.
The general consensus from the leaders of Charlotte’s top companies in five key industries was that 2020’s economy is likely to be down from 2019.
Boosting their social media presence is one the top goals for Miami business owners, according to a new survey.
(Bloomberg) -- Investors are eagerly lining up backup financing just in case the U.S. repo market, which worried Wall Street when it went haywire in mid-September, sees turmoil at the end of the year.For the third straight Monday, the Federal Reserve conducted funding operations designed to give traders extra liquidity around Dec. 31, a time when repo liquidity has historically dried up. All three were oversubscribed, meaning market participants bid for more than the central bank was offering. The latest one got requests for $43 billion versus the $25 billion maximum.Year-end isn’t the only challenge for a business that, among other things, is used to finance the purchase of Treasuries. Pressure could also resurface around Dec. 16, when new U.S. debt is distributed to investors, while at the same time quarterly corporate tax payments push up the Treasury Department’s cash balance.That money is parked at the nation’s central bank, and increases to that amount are generally matched by decreases in the balances of other institutions with deposits at the Fed -- in other words, banks. So while the Fed is currently seeking to bolster bank reserves to calm funding markets, an increase in the Treasury’s cash balance could stir up trouble.“There will be pressure in the middle of the month, just like there will be pressure at the end of the year,” said Mark Cabana, head of U.S. interest rate strategy at Bank of America Corp. He expects usage of the Fed’s overnight repo operations to increase on Friday, Monday and Tuesday. While there will be “some signs of stress,” the presence of the Fed in the market means that there’s unlikely to be a repeat of September’s turmoil, he added.The payment of corporate taxes in mid-September was one of the factors highlighted by many observers as potentially contributing to the spike in repo rates around three months ago. In response to that upheaval, which saw the overnight rate for general collateral repo climbing to 10% from around 2%, the Fed started injecting liquidity into the repo market from Sept. 17. It has also been buying Treasury bills to add reserves to the system.The Federal Reserve Bank of New York’s 28-day operation on Monday -- which matures on Jan. 6 -- was the last of three term operations currently scheduled to provide funding past year-end. Traders will be watching for any announcements from the central bank about plans for additional term-repo operations beyond the 13-day and 14-day actions scheduled for later this week. The next release of details is due to take place Thursday.The size of the Dec. 9 operation was increased last week to $25 billion from its initial amount of $15 billion after the central bank’s second year-end offering was oversubscribed. Market participants had submitted $42.55 billion in bids for the 42-day term action that took place a week ago, which was more than the $25 billion available. That term offering had also been upsized after the bids for the Fed’s first year-end operation on Nov. 25 exceeded the amount offered.BMO Capital Markets Strategist Jon Hill said that while he’s neither surprised by the takeup for the most recent term action nor worried at this stage, it would be “concerning” if term operations are still oversubscribed when Dec. 26 rolls around. “If it’s looking scary, the Fed could do more.”The recent tumult has spurred debate about the causes of friction in the repo market and potential solutions. The Bank for International Settlements on Sunday released a report suggesting that there is a structural problem in the market and that it wasn’t just a temporary hiccup. A group of smaller broker-dealers, meanwhile, has proposed several options to reduce how much the funding market relies on just a few players.\--With assistance from Benjamin Purvis and Debarati Roy.To contact the reporter on this story: Alexandra Harris in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Benjamin Purvis at email@example.com, Nick BakerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Bank of America Corp. is expanding commission-free trading -- again.The lender said it will give unlimited free stock trades to all customers on its Merrill Edge Self-Directed platform, seven weeks after handing that perk to members of its Preferred Rewards loyalty program. The move, announced in a statement Monday, follows Charles Schwab Corp.’s decision to eliminate charges and acquire TD Ameritrade Holding Corp. for about $26 billion. It all underscores fierce competition in the discount-brokerage business.“Everyone is aggressive right now, because the question is: How do you prove value, how do you attract clients?” Aron Levine, Bank of America’s head of consumer banking and investments, said in a phone interview. “We want to make sure that all clients who are interested in our platform have access to it in a comparable way to the rest of the industry.”As other firms face pressure to bulk up through mergers, Bank of America will focus on boosting activity among its existing clients, Levine said. The company has about 66 million consumer and small business clients.“We look at a client holistically,” Levine said. That means the lender can make money on customers’ broader financial activities, including banking, credit cards and mortgages, rather than focusing purely on brokerage revenue. Any lost revenue from the latest move will be marginal, given 87% of trades were already commission-free, he said.To contact the reporter on this story: Lananh Nguyen in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, David Scheer, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Wells Fargo Senior Analyst Mike Mayo joins Yahoo Finance’s The Final Round to discuss what he expects from the Fed and big banks in the year ahead.