|Bid||29.35 x 27000|
|Ask||29.35 x 46000|
|Day's Range||29.38 - 29.61|
|52 Week Range||22.66 - 31.91|
|Beta (3Y Monthly)||1.59|
|PE Ratio (TTM)||10.46|
|Earnings Date||Oct 16, 2019|
|Forward Dividend & Yield||0.60 (2.04%)|
|1y Target Est||33.35|
The Federal Reserve is settling on a cautious approach to monetary easing, with a 25 basis point cut in interest rates likely at its next policy meeting, as Jay Powell, the chairman, seeks to support the US economy without committing to much deeper stimulus. In recent weeks, public appearances by Fed officials have revealed a broad desire to move towards looser monetary policy to shield the US economy from risks to the outlook arising from trade tensions, weakness in global growth and persistent low inflation.
(Bloomberg) -- Medallia Inc. ended its first day as a public company with one of the year’s 10 best trading debuts after its $325.5 million initial public offering.Shares of the enterprise software provider, which rose as much as 88% Friday, closed up 76% to $37.05. That gave it the eighth-best first-day performance out of 105 IPOs in the U.S. this year, according to data compiled by Bloomberg.The company and some of its investors sold 15.5 million shares on Thursday for $21 each after marketing 14.5 million of them for $16 to $18. The listing values the company at about $4.5 billion, based on the additional stock sold and the number of shares outstanding, as listed in regulatory filings.Beyond Meat Inc. had the year’s best U.S. trading debut after its $276 million IPO in May. The meat-substitute producer soared 163% on first day and is now up 581% from its offer price, also the best in the U.S. this year.Medallia Chief Executive Officer Leslie Stretch said he was pleased with the company’s debut, as well as its progress toward profitability.“We need to invest in sales and marketing -- go to market -- and we’re doing that aggressively,” Stretch said in an interview. “We’re going to continue with our trajectory.”The San Francisco-based company’s net loss for the quarter ending April 30 was $2.6 million on revenue of $94 million, it said in the filings. That compared with a net loss of $28 million on revenue of $71 million for the same period last year.The offering was led by Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. The shares are trading on the New York Stock Exchange under the symbol MDLA.(Updates with closing share price in second paragraph)To contact the reporter on this story: Michael Hytha in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Liana Baker at email@example.com, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
It marks a major step forward in the ramp up of the campaign — led by David Tepper, owner of the NFL Carolina Panthers, and his top lieutenant, Tom Glick — to bring a Major League Soccer franchise to Charlotte.
Bank of America (BAC) released second-quarter earnings earlier this week, and investors were generally satisfied with the results. The company reported revenue of $23.2 billion for the quarter, in-line with expectations, and EPS of $0.74, beating estimates of $0.71. But one thing that may be cause for concern is its net interest margin (NIM), which is the difference between the interest it collects (through loaning money to customers) and the interest it pays (through receiving a loan). While Wall Street was expecting 2.47% — a decrease since last quarter — the results came in a worse-than-expected at 2.44%. It isn’t the end of the world, especially as long-term interest rates have been falling (which contributes to less generation of interest revenue), but it is something investors are expected to monitor moving forward. Evercore ISI analyst Glenn Schorr doesn't seem concerned as he maintains an Outperform rating on BAC stock, with a $33 price target, which implies ~12% upside from current levels. (To watch Schorr's track record, click here)Overall, Schorr says BofA had a “pretty good quarter with the forward look on NII (net interest income) being the only real issue to consider…” The highlights include a 200bps of operating leverage as expenses remained flat, as well as growth in loans, deposits and even NII. The report was generally not surprising — but the only real issue to consider for Schorr is the drop in NIM, which the analyst says, “will likely remain under pressure given the backdrop.” While Schorr believes “NII seems to be somewhat insulated thanks to the overall loan and deposit growth BofA is producing,” the analyst points out that “the margin squeeze still hurts if the forward curve proves to be right,” which also prompted BoA management to reduce NII guidance for 2019 fromo 3% to 1% y/y. But even with the lower expected NIM and that the “world has slowed,” Schorr believes BAC continues to grow pretty consistently. He points to the growth in loans, and deposits (which increased more than $40 billion for the 15th-straight quarter). On loans, the analyst says, “an acceleration in mortgage loan production (+56%) drove Consumer as lower rates spurred activity,” while he models for “more of the same with good growth in Cards, Small Business and Middle Markets” moving forward. All in all, BoA’s first quarter release painted a seemingly rosy picture, providing continued optimism for the future. TipRanks analysis of five analyst ratings shows a consensus Moderate Buy rating, with three analysts Buying and two Holding. The average price target among these analysts stand at $35.50, which represents a 21% rise from current levels. (See BAC's price targets and analyst ratings on TipRanks) More recent articles from Smarter Analyst: * Curaleaf Helping to Put U.S. Cannabis Sector on the Map * Netflix’s (NFLX) Original Content Strategy Is Failing; The Stock Is Overvalued * Marijuana Stock KushCo (KSHB): Potential Catalysts Vs. Risks * Tesla (TSLA) Stock Bulls and Bears Agree to Disagree; Needham Weighs In
When you watch a game, whether it's a pitcher's duel in baseball, a defensive struggle in football, or a goalless soccer match, you know those who aren't into your sport are going to call it boring.Source: Shutterstock To this you will reply that defense wins championships.The same is true for investing. Making money is fun, but keeping money is winning. That's why you keep some money in a stock like Bank of America (NYSE:BAC). With a dividend yielding 2.04% and a price-to-earnings ratio below 11, its gains for the year are right in line with those of the market averages. But it's steady -- a defensive play.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Tech Stocks That Are Still Worth Your Time (And Money) When companies like this report earnings analysts tend to become breathless, looking for any chink in its armor. There are chinks. There are reasons to worry. BAC's ChinksWhat big bank investors worry about right now is that falling interest rates mean net interest income is falling as well. Guidance looks weak. It's worrisome. Profits from lending are declining.But Bank of America is mainly a proxy for consumer banking and consumer spending. Its profits come from its credit cards, where it's the fourth-leading issuer, from simple checking accounts, and from mortgages, which look healthy.The consumer is the major risk for Bank of America stockholders, and in the second quarter the consumer was healthy. This let results exceed analyst estimates, with net income of $7.3 billion, 74 cents per share fully diluted. The only part of the bank where results went down was global banking, where net income was down 9%, even with deposits up 12% and loans up 5%.The phrase that jumped out in the press release from CEO Brian Moynihan was "responsible growth." The bank is aware that the last recession was centered in the banking business. CFO Paul Donofrio was thus filled with worry during the bank's conference call, anticipating two interest rate cuts this year from the Federal Reserve, and lower interest rates that could cut growth in net interest income to 1%, half what it was last year.But slower growth is still growth. Bank of America is still growing, and that growth looks sustainable. The PayoffThe payoff for investors is always the dividend. The current yield of 2.04% is based on a 15 cent per share dividend and is less than the rate on the 10-year U.S. bond, now 2.04%. But the bank said during the conference call it will increase the payout by 20%, meaning investors can expect 18 cents per share soon.That brings the forward yield up to 2.44%, at its July 18 opening price of $29.22 per share. Compare that to the rate on the 30-year bond, almost 2.6%. The bank also intends to buy back as much as $30 billion in shares during the year, over 10% of the shares outstanding, to keep the share price up. For 2019 so far, the shares are up 19.7%. The Bottom Line for BAC StockThere are two manageable risks in Bank of America stock: fintech and the possibility of recession.Bank of America has a $10 billion capital budget, aimed at reducing a technology debt based on mainframes, cash machines and teller windows.The risk of a recession is real, but if there is a downturn, investors will look for financial strength. Bank of America has assets of nearly $2.4 trillion.You don't want to overload on defensive stocks like Bank of America but having some in a balanced portfolio will keep you sane when there's a real panic. Defense still wins championships.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Are Still Worth Your Time (And Money) * 7 Marijuana Stocks With Critical Levels to Watch * 7 of the Best Smart-Beta ETFs to Target Right Now The post Bank of America Stock: Defense Still Wins Championships appeared first on InvestorPlace.
Two large banks, a food-and-beverage company, and a prescription-drug distributor are expected to announce dividend increases next week.
(Bloomberg) -- Vodafone Idea Ltd. has hired Bank of America Corp. and Morgan Stanley to help sell its fiber assets as India’s largest mobile carrier by users seeks to bolster its finances, people familiar with the matter said.The bankers will initiate discussions with potential buyers for the fiber assets, which could be valued at as much as 130 billion rupees ($1.9 billion), the people said, asking not be identified as the talks are private.A final decision has yet to be made on the valuation and the stake to be sold, and the company could bring in more banks for the sale, the people said. Representatives for Vodafone Idea and Morgan Stanley declined to comment, while a Bank of America spokesman didn’t immediately respond to requests for comments.A deal, if successful, would help the phone-service provider add to the funds it’s been raising to pare debt and fend off rivals Bharti Airtel Ltd. and billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., an upstart that upended the market after its debut in 2016. In April, Vodafone Idea raised 250 billion rupees from a rights issue, building a war chest as India readies for a 5G network.Vodafone Idea, which was formed by the merger of Vodafone Group Plc’s local unit with tycoon Kumar Mangalam Birla’s Idea Cellular Ltd., has reported losses in every quarter since the deal was announced in 2017.Both Bharti Airtel and Vodafone Idea top the list of Asian peers with highest borrowings, according to data compiled by Bloomberg.Mumbai-based Vodafone Idea is in the process of transferring all of its fiber assets into a separate company before the sale. The unit has about 158,000 kilometers (98,177 miles) of fiber, according to a presentation posted on its website in February.Shares of Vodafone Idea fell 5.4% on Thursday, the biggest drop in almost two months. The stock declined 50% this year, while India’s benchmark Sensex index rose 7.8%.(Updates to add shares performance in the final paragraph.)To contact the reporters on this story: Baiju Kalesh in Mumbai at email@example.com;P R Sanjai in Mumbai at firstname.lastname@example.orgTo contact the editors responsible for this story: Fion Li at email@example.com;Sam Nagarajan at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The stock market again took a break from its robust rally as it digests more earnings results. We've seen plenty of mixed results, but so far, the market is handling the news pretty well. Here are a few top stock trades to watch going into the last trading day of the week. Top Stock Trades for Tomorrow 1: IBM Click to EnlargeInternational Business Machines (NYSE:IBM) started off lower on the day, but climbed more than 4.5% later in the day after reporting its earnings results. InvestorPlace - Stock Market News, Stock Advice & Trading TipsLast week, IBM stock pushed over downtrend resistance (blue line) and this week's move cements it. That prior downtrend mark is now a must-hold level for investors. I would love to see IBM stock stay above the trio of candlesticks that marked the weekly closing highs for the past 52 weeks. That's the black line that comes into play near $146. If it holds, shares could run into the mid- to high-$150s and possibly challenge the 2018 highs. Below the ~$146 mark and we'll need to see if the 10-week moving average holds as support. Top Stock Trades for Tomorrow 2: Honeywell Click to EnlargeLook at the beautiful "inside day" Honeywell (NYSE:HON) is printing after reporting its quarterly results and raising guidance. An inside day occurs when the entire range of the second day is "inside" the range of the prior trading session.Of course, this one is even more interesting as HON stock initially lost, then reclaimed the 50-day on Thursday, but couldn't get above the 21-day moving average. Hmm. This sets up a range trade.Below Wednesday's lows and HON is likely heading lower. Above Wednesday's highs -- remember, that's the prior session -- and HON is likely heading higher. At least, until it runs into potential downtrend resistance (blue line). Top Stock Trades for Tomorrow 3: Philip Morris Click to EnlargePhilip Morris (NYSE:PM) stock erupted 9% after better-than-expected earnings results. The move on the weekly chart thrust the stock above a key downtrend level, as well as the $87 mark. As long as PM holds above $87, bulls can justify a long position. Below it and we'll need to see the 200-week moving average hold as support. On the upside, let's see if PM can push through Thursday's highs and $90. Top Stock Trades for Tomorrow 4: Morgan Stanley Click to EnlargeMorgan Stanley (NYSE:MS) caught a slight lift after reporting second-quarter earnings. The stock continues to put in a series of higher lows and is maintaining above all of its major moving averages. However, it's having trouble pushing through resistance between $44 and $45. Like most major bank stocks, resistance continues to keep these names in check. Over $45 and a move to $46.50 is possible. Above that and $49 is doable. On a pullback, see that $43 holds as support. Below is concerning. Top Stock Trades for Tomorrow 5: Bank of America Click to EnlargeAnother example of a bank stock struggling to breakout? Bank of America (NYSE:BAC).The stock flirted with a breakout over $29.50 on Wednesday after beating on earnings expectations. However, the stock gave up most of its gains going into the close before holding short-term support at $29. BAC stock is stuck in a very tight range between $29 and $29.50. However, it's got plenty of bullish catalysts working in its favor, including earnings growth, revenue growth and a continually rising dividend and buyback. Its valuation continues to drop, too. * 7 Stocks Top Investors Are Buying Now If it can push through $29.50, it could trigger a breakout, first to $30 and possibly up toward $30.75. A move below the 21-day moving average and $29 is concerning.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post 5 Top Stock Trades for Friday: IBM, HON, PM, MS, BAC appeared first on InvestorPlace.
Bank of America Corp has appointed Janis Vitols to be its new head of global asset management investment banking, according to an internal memo seen by Reuters on Thursday. "A 20-year veteran in investment banking, Janis joins us from Barclays, where he was most recently managing director and head of global asset management investment banking," Bank of America Vice Chairman and Americas head of its financial institutions group Will Addas wrote in the memo to staff.
Bank of America CEO Brian Moynihan just went a long way in showing not all millenials are broke.
Earnings season is underway and corporate buybacks are set to boost earnings per share for S&P 500 companies.
This week marked the start of the bank earnings season. Coming into it, I favored owning three bank stocks: JP Morgan (NYSE:JPM), Bank of America (NYSE:BAC) and Square (NYSE:SQ).The reactions to JPM and BAC earnings were tentative. So the opportunities there remain intact. The third hasn't yet reported, so the SQ stock price continues to hold its own for the bulls.So in light of the recent reports, are they still good to buy at these levels? The short answer is, yes.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo, today, I reiterate the reasons why and I also add Citigroup (NYSE:C) to the list of banks to own for the long term.The first few days of the earnings season are muted and did not yet erase the predominant idea that bank stocks are boring and cannot rally. So the investment in them now should continue to be under the assumption that it's for the long term. So What About Their Environment?Contrary to popular belief, banks stocks do perform in lockstep with the general equity markets. Year-to-date JPM and BAC are up just as much as the S&P 500 and Citigroup stock is up double that.In addition, since all of them passed their stress test, they are all committed to defending their own stock prices with financial engineering.They will increase dividends and buy back their own shares so the efforts from the sellers will have to go against a tremendous headwind of cash flow from the banks themselves.The U.S. Federal reserve and other central banks have wreaked havoc with banks' ability to conduct business. They keep manipulating the interest rates and this creates tremendous confusion, especially on Wall Street.Most investors believe that banks need higher rates to profit, but that is not true. Money center banks need a wide spread between short- and long-term rates to profit.So the recent commitment from the Federal reserve to lower short-term rates should invite more lending activity and at a wide spread. Banks borrow short term to lend us long term. So I am not worried about their business models this year. * 10 Best Cryptocurrencies to Keep on Your Radar With that in mind, let's dive a bit deeper into what makes these three stocks to buy. JP Morgan Chase (JPM)Source: Shutterstock Perception on Wall Street is that JPM is the best of the best. Fundamentally it's cheap as it sells at a price-to-earnings ratio of 12x. The book value fluctuates from 1.2 to 1.6, so it's not likely to be a financial debacle to own it here. In addition, JP Morgan stock pays a respectable 2.8% dividend.The management team is a proven winner. They survived the worst financial crisis of the modern era, so they've seen a few hard days. The regulations that followed the 2008 financial crisis made it so that their balance sheets are bullet proof. Recently, JP Morgan recommitted to more capital return via buybacks and dividends.In addition to the value below, JPM stock is trading inside a tight range. It has support at $112 and $110 per share and a neckline at $116.5, above. Technically, this makes for a breakout opportunity since the bulls have been setting an ascending trend of higher lows while knocking at a resistance zone. If they can break through the resistance zone above, then they can overshoot higher and mount a $9 rally.I would own the shares here for this short-term opportunity and/or for the long-term equity investment. Either way, I think JPM stock is a winner.For those who like to trade options there is also the possibility to sell put spreads at the support levels for August and/or buy calls just above the current price. The combination would be cost neutral thereby offering an opportunity to profit with no out-of-pocket expense.The JPM earnings report did not add any new worries so the ongoing fundamentals still favor the long-term bullish thesis than the short. Bank of America (BAC)Source: Shutterstock The fundamentals for BAC stock are very similar to those of JP Morgan. The stock on the other hand trades in a much tighter range. Case in point, in the last few weeks, the Bank of America stock price is ping-ponging inside a $1 wide box and this includes the reaction to an earnings event.BAC sells at a 10.8 P/E and 1.1 times sales, so it's even cheaper than JPM stock. Management is also beyond reproach since they not only survived the crisis but also saved a few banks along with it.Since BAC trades in a tight bunch, I prefer to trade it via options. I like to sell puts into dips and what others fear. It's a low-priced ticker, so I don't mind being out of the stock if one of those trades temporarily fails. Over the long term it will work out. This way I generate income without any out-of-pocket expense.For example, if I sold the Jan $25 puts before the earnings they now are almost 20% cheaper to close the position. The stock only moved up 2% in comparison. And in my scenario, I risked no money out of pocket.It is important to note that I don't sell naked puts unless I am willing and able to own the shares.Since BAC stock is now tight, technically it too has an opportunity to breakout. The bulls need to overcome the current resistance level, so they can target $31.2, which was the fail of April 29. * 7 Battery Stocks for High-Powered Gains Here too the Bank of America earnings report did not change the overall bullish thesis on the stock. Citigroup (C)Source: Shutterstock Citigroup's reactions to earnings was negative. Since then, the C stock price has traded inside that earnings day candle. So, technically, I note the edges of it as short-term catalysts. Meaning that any breach of its sides would carry some momentum in that direction.So if the bulls can beat $72, they can target $76 per share. Conversely, if the sellers can break below $70, they can target $68 per share.Either way, it would be an exercise in short-term trading and won't change the long-term bullish thesis on the stock. Citigroup stock, for the long term, remains a "BUY" in my book and the experts on Wall Street agree since it has very few HOLD and almost no SELL ratings.So which one is best?They are all quality stocks to buy, but from a 2019 perspective, C stock has the best score. Logic says to stick with the winner.However, of the three banks today, C is my least personal favorite. This is nothing against its own fundamentals and more so my worry over its exposure to international situations. Specifically the chatter surrounding its exposure to entities like Deutsche Bank (NYSE:DB) for example. I don't have anything concrete, but if there is a rumor, then there must be some truth to it, and I don't want the surprise of finding out one day.In summary, I can confidently state that the major U.S. banks are almost all stocks to own almost at any time, while they carry their current fundamentals. JPM, BAC and C stock have so much value below that they make the bearish scenario seem shallow at its worst.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post 3 Bank Stocks to Buy After Earnings Headlines appeared first on InvestorPlace.
Bulge bracket banks kicked off second-quarter earnings, and despite a low interest rate environment, big banks delivered record numbers. Bank of America (NYSE:BAC) did particularly well, delivering its best quarter in the company's history.Source: Shutterstock The combination of strong consumer spending activity and BAC management's continued commitment to share repurchases has proved potent. It's not over yet either. The company, in no uncertain terms, has committed to an additional $37 billion of dividends and share repurchases.BAC has built further trust with their clients, and the financial results speak for themselves. Consumer banking and wealth management continue to show a lot of strength, buoyed by improvements on the digital platform. Overall performance from most business units -- weakness in sales and trading was not unexpected -- was very positive.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe momentum from this quarter should continue through to the next. Happy Customers Are Good for BusinessNot only did average deposits grow 3% (or by $19 billion), consumer investment assets grew a very solid 15% to $220 billion assets under management. Remember that fees generated from managing these investment assets are a lucrative business. To the extent that these client flows continue, which admittedly has been helped along by strong equity market performance, double-digit growth could very well persist next quarter.It's also an important revenue stream as interest income will hit some uncertainty in the remainder of the fiscal year. Net interest income rose 3% in the quarter, but if the expectation of interest rates getting lowered comes to fruition, it would pose a challenge of sustaining even low single-digit growth rates.BAC regained its status as the leader by market share in small business lending. They are building up deeper and deeper ties to consumers and business owners. This symbiotic relationship between personal and commercial clients. BAC Is Strong on the Digital FrontAll the banks have been actively bolstering their digital platforms, and BAC has seen excellent feedback and traction. Active mobile banking users were up 10% to 27.8 million. * 10 Best Cryptocurrencies to Keep on Your Radar Zelle users haven't quite grown at quite the desired clip, sitting at 8 million active users, but it is not just the number of active users that matters. Rather, the ability of BAC to upsell and generate revenue via the digital platform is more important. It is noteworthy then that 69 million sent and received payments via Zelle. That translates to $18 billion and a 79% increase year-over-year. So, the substantial growth in volume somewhat alleviates the concern of slower growth in total users.Another point worth noting is that one-third of total consumer mortgage applications came from digital. Increasingly, BAC's investment in their platform is paying dividends beyond just payments transfers. BAC Stock Is Undeniably CheapIn numerical terms, BAC saw consumer spending increase 5% year-over-year and share repurchases amount to 7% of the total float in the past twelve months.This dynamic has driven a double-digit increase in book value per share, a more appropriate valuation metric for financial holding companies. Based on BAC's calculation of $26.41 per share, BAC stock currently trades at just 1.1x. Other competitors like JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) are not expensive either, but BAC is the cheapest from this angle.The robust earnings combined with this existing relative undervaluation should see that this imbalance does not persist for long.As of this writing, Luce Emerson did not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post Bank of America Stock Is Worth Grabbing When It's Cheap appeared first on InvestorPlace.
(Bloomberg Opinion) -- Goldman Sachs Group Inc. and Morgan Stanley are the two Wall Street banks most connected to high-stakes trading. Historically, that made them seem glamorous relative to the other big U.S. institutions, which focused on the more steady business of retail banking.The tide has turned. Persistently low volatility has made it clear that banks can’t count on traders to drive profits. Goldman’s equities revenue beat expectations earlier this week, in a small sign of hope, but Morgan Stanley’s results on Thursday were more far more indicative of the trend. Its $2.13 billion from equities was the highest among banks but was down 14% from a year ago and fell short of even the lowered estimates of $2.27 billion. In fixed income, currencies and commodities, revenue dropped 18% rather than the expected 7% decline.This puts Goldman and Morgan Stanley in a tough spot. They’re not well positioned to immediately compete with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. in catering to the banking needs of Main Street. At the same time, the bank executives have to feel pressure to limit the quarter-to-quarter fluctuations that are at the mercy of the whims of the global markets.Reading between the lines, their answer to this quandary appears to be more emphasis on wealth management.Now, this isn’t exactly a revelation, nor an abrupt shift. Morgan Stanley has been moving into wealth management strategically for a while, and Goldman’s division already oversees more than $1 trillion in assets. Still, the banks’ latest commentary and moves in the past quarter make clear that they see this business, which produces a steady stream of fee-based income, as a way to leverage their reputation as titans of Wall Street.In Morgan Stanley’s earnings call on Thursday, Chief Executive Officer James Gorman specifically praised Dan Simkowitz for his work on building up the firm’s asset-management unit. And by all accounts it was well deserved, with the division’s revenue at the highest in five years. On the wealth-management side, Morgan Stanley posted $4.41 billion of revenue, which was 2% higher than last year and blew away analysts’ estimates for a 9% decline.Moreover, Morgan Stanley’s wealth-management division posted an impressive 28% profit margin. So impressive, in fact, that it drew more than one question from analysts about whether the bank can sustain that sort of momentum, including from Mike Mayo of Wells Fargo. Gorman insisted “it’s not like we are sitting back and saying we are really milking this.” Rather, “we’re playing for the long run.”At Goldman, Chief Executive Officer David Solomon on Tuesday highlighted its $750 million purchase of wealth manager United Capital, which was announced in May and represented one of Goldman’s biggest acquisitions in recent memory. Bloomberg News’s Sridhar Natarajan noted at the time that Solomon has made building out fee-based businesses a high priority so that shareholders can more easily estimate the bank’s growth and earnings.None of this is to say that Morgan Stanley and Goldman will abandon their positions as premier trading firms. But it’s notable to parse what Morgan Stanley Chief Financial Officer Jon Pruzan told Bloomberg News’s Sonali Basak in an interview. “We’re No. 1 in the world” in equities trading, he said, adding that “we would expect to maintain our market share in this type of environment.” He reiterated those comments during the analyst call.It’s certainly possible that volatility will resume, given that stock markets are hovering near all-time highs and global central banks are on the verge of further easing monetary policy. But framing expectations in terms of maintaining market share would seem to indicate that Pruzan expects further challenges for trading in the coming months and years. Ted Pick, who oversees all of Morgan Stanley’s traders and investment bankers, made some interesting comments in May about the equities business. He said he had led the division with “high levels of paranoia” because it felt like a couple of competitors were coming after the bank, either on price or looser risk requirements or something else. He said “that’s not a game we’re going to play.”Rather, as these second-quarter earnings make clear, Morgan Stanley is playing the long game. So is Goldman. When it comes to dealing with the fickle nature of financial markets, sometimes the most sound strategy is to play the hand you’re dealt.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.
The wirehouse reportedly plans to stick with its existing broker compensation plan, which includes incentives to bring in new clients
Rise in interest income and lower costs support Morgan Stanley's (MS) Q2 earnings. However, weak trading and investment banking performance is on the downside.
U.S. stock futures are hovering near unchanged, continuing their streak of sleepy summer opens. The talk of the town is Netflix (NASDAQ:NFLX) earnings, which missed revenue estimates and has the stock down 11% premarket.Source: Shutterstock Ahead of the bell, futures on the Dow Jones Industrial Average are down 0.18%, and S&P 500 futures are lower by 0.05%. Nasdaq-100 futures have shed 0.07%.In the options pits, calls outpaced puts by a modest margin, while overall volume ticked slightly above average levels. Specifically, about 18.5 million calls and 15.6 million puts changed hands on the session.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMeanwhile, over at the CBOE, the single-session equity put/call volume ratio rose to 0.67 -- a one-month high. The 10-day moving average continued its sideways drift at 0.60.There were three marquee stocks heavily favored by options traders on Wednesday: Baidu (NASDAQ:BIDU), Netflix and Bank of America (NYSE:BAC).Let's take a closer look: Baidu (BIDU)Ever since May's earnings-induced plunge, Baidu shares have been unable to get off the mat. The two months of churn have allowed the descending 50-day moving average to catch-up and the time could be nearing for a resolution out of the tight range established since May. * 10 Best Cryptocurrencies to Keep on Your Radar The next quarterly report is due out July 30 and could provide the kick needed to spark BIDU stock's next move. If options traders possess any prescience, then the eventual break will be lower. Yesterday's options trading saw massive put volume relative to calls. Total activity ramped to 361% of the average daily volume, with 174,074 contracts traded; 92% of the trading came from put options alone.Despite the dash for puts, implied volatility fell on the session to 40% or the 47th percentile of its one-year range. Premiums are now pricing in daily moves of $2.85 or 2.5%. Netflix (NFLX)Netflix shares plunged last night on disappointing earnings results, and the pain is continuing premarket. The primary culprit for investors' ire is the lackluster number of new subscribers for the quarter. The company had previously forecasted 5 million new customers, but was only able to welcome 2.7 million paid subscribers into the fold.NFLX posted second-quarter earnings-per-share of 60 cents on revenue of $4.92 billion.With NFLX stock poised to open near $323 or down 11%, the long-awaited break of its tight, seven-month trading range is finally upon us. Whether we see a close below it remains to be seen. We have seen buyers emerge to save potential breakdowns before, but today's plunge has weakening fundamentals driving it so it could stick.On the options trading front, traders favored calls ahead of the report. Total activity swelled to 242% of the average daily volume, with 320,247 contracts traded. Calls claimed 58% of the day's take.This morning's 11% puke was well above expectations. Option premiums were forecasting a gap of $22 or 6%, so we're looking at a sizeable move that will deliver big profits to traders swinging long volatility positions like straddles and strangles into the number. Bank of America (BAC)Bank earnings rolled on yesterday, this time with Bank of America stepping up to the plate. Its early morning rally melted into the close leaving the stock up a scant 0.6%. If you've never paid attention to bank earnings in the past, one thing should become crystal clear after this week's showing. They're boring and rarely generate jaw-dropping moves seen from high-flying tech stocks.For the quarter, Bank of America earned 74 cents a share on $23.2 billion in revenue. Compared to the year-ago quarter, both measures marked growth of 8% and 2.1%, respectively. * Top 7 Semiconductor ETFs to Buy Now The price chart for BAC stock leaves little interesting to chat about. It remains stuck in a seven-month range complete with crisscrossing moving averages that reveal a tie between bulls and bears on every time frame. Shareholders continue to collect a 2.06% dividend, while waiting for resolution.A jump over $29.70 resistance could get something going on the upside, but until then, it's hard to get excited about a bullish play.On the options trading front, calls were favored over puts. Activity climbed to 215% of the average daily volume, with 442,160 total contracts traded. Calls accounted for 65% of the tally.With such a snoozer of a reaction, traders whacked implied volatility down to 23%. That lands it at the 21st percentile of its one-year range and means the expected daily moves are now 42 cents or 1.4%.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post Thursday's Vital Data: Baidu, Netflix and Bank of America appeared first on InvestorPlace.