|Bid||45.01 x 1100|
|Ask||52.33 x 900|
|Day's Range||46.77 - 47.72|
|52 Week Range||41.02 - 60.38|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.33|
|Expense Ratio (net)||0.35%|
Fourth-quarter earnings season commences in earnest this week. As is the case during every earnings season, the financial services sector, the third-largest sector weight in the S&P 500, gets the earnings ball rolling. This week alone, more than 31% of the members of the Russell 1000 Financial Services Index step into the earnings confessional. Over the following three weeks, 43.76% of that benchmark's member firms deliver fourth-quarter results. On Monday, Citigroup Inc. (NYSE:C) kicked off this week's parade of bank earnings, reporting a fourth-quarter profit of $4.2 billion, or $1.61 a share, up from $3.7 billion, or $1.28 a share, a year earlier. Analysts expected New York-based Citi to earn $1.55 per share. InvestorPlace - Stock Market News, Stock Advice & Trading Tips On Jan 7, FactSet wrote: "They S&P 500 is expected to report earnings growth of 11.4% for the fourth quarter. What is the likelihood the index will report an actual earnings increase of 11.4% for the quarter? Based on the average change in earnings growth due to companies reporting positive earnings surprises, it is likely the index will report earnings growth above 15% for Q4, but below the 25% growth reported in the previous three quarters." * 8 Dividend Stocks With Growth on the Horizon With a slew of marquee banks reporting earnings this week, some of the following related bank ETFs could be worth monitoring, particularly because expectations for the sector are low heading into this earnings season. ### Financial Select Sector SDPR (XLF) Source: Shutterstock Expense ratio: 0.13% per year, or $13 on a $10,000 investment. The Financial Select Sector SDPR (NYSEARCA:XLF) is not a dedicated bank ETF, but it is the largest financial services ETF on the market and it does allocate over 43% of its weight to bank stocks, more than double its second-largest sector weight. Coming off a 13% loss last year, XLF could use the assistance of some better-than-expected earnings reports to see its near-term fortunes boosted. There are immediate catalysts with the potential to determine this sector ETF's near-term performance. JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo Co. (NYSE:WFC), which combine for 16.49% of this bank ETF's weight, report earnings this week. This bank ETF has work to do to recapture investors' confidence. As XLF slumped last year even amid four interest rate hikes by the Federal Reserve, investors yanked $5.35 billion from the fund, a total exceeded by just four other ETFs. Investors remain leery of this bank ETF as highlighted by outflows from XLF of more than $794 million last week. ### SPDR S&P Bank ETF (KBE) Source: Shutterstock Expense ratio: 0.35% per year, or $35 on a $10,000 investment. As its name implies, the SPDR S&P Bank ETF (NYSEARCA:KBE) is a dedicated bank ETF, putting it front and center among the primary options to consider amid this week's onslaught of bank ETFs. The $2.72 billion KBE tracks the S&P Banks Select Industry Index and holds 85 bank stocks across all three market capitalization segments (large, mid and small). This bank ETF's holdings have a weighted average market value of $22.92 billion, indicating it tilts toward larger bank stocks. * 5 Fallen-Angel Stocks That Have Been Oversold KBE is an equal-weight ETF and none of its components command weights of more than 1.73%, indicating single stock risk is minimal with this bank ETF. That also means KBE needs the assistance of a lot of strong reports to deliver earnings season upside. ### Invesco KBW Bank ETF (KBWB) Source: Shutterstock Expense ratio: 0.35% per year, or $35 on a $10,000 investment. The Invesco KBW Bank ETF (NASDAQ:KBWB) is another dedicated bank ETF, but it features significant differences relative to the aforementioned KBE. KBWB tracks the widely followed KBW Nasdaq Bank Index and is a cap-weighted fund. KBWB holds just 24 stocks and is dominated by the largest U.S. banks. That means this bank ETF is bound to be tested this week. Bank of America Corp. (NYSE:BAC), JPMorgan Chase and Wells Fargo combine for about 24% of KBWB's weight. As is the case with other bank ETFs, KBWB leans heavily toward the value factor because financial services stocks have been widely regarded as value plays for over a year. Over 78% of KBWB's holdings are considered large- and mid-cap value plays. ### iShares U.S. Financials ETF (IYF) Source: Ken Teegardin via Flickr Expense ratio: 0,43% per year, or $43 on a $10,000 investment. The $1.69 billion iShares U.S. Financial Services ETF (NYSEARCA:IYF) tracks the Dow Jones U.S. Financials Index and has a deeper bench than some rival bank ETFs as highlighted by a roster of 285 stocks. Like the aforementioned XLF, IYF is more of a diversified financial services ETF. That said, IYF allocates 29.58% of its weight to bank stocks, making that the fund's largest industry weight. Five of IYF's top 10 holdings are bank stocks and all five of those names deliver fourth-quarter results this week. Many of the same stocks that dominate XLF and KBWB are important to IYF's performance as well. "Analysts are expecting a decent set of numbers, given an economy that seems in good shape based on holiday retail sales and employment numbers, subdued inflation and a more dovish Federal Reserve," reports MarketWatch. * 8 Dividend Stocks With Growth on the Horizon IYF is up 3.73% to start 2019. ### Invesco S&P 500 Equal Weight Financials ETF (RYF) Source: Shutterstock Expense ratio: 0.40% per year, or $40 on a $10,000 investment. The Invesco S&P 500 Equal Weight Financials ETF (NYSEARCA:RYF) can be seen as an equal-weight alternative to XLF, meaning no single stock charts the course for this bank ETF. RYF actually features lower bank exposure than XLF as insurance providers and capital markets are larger industry weights in the equal-weight fund than traditional banks. Still, RYF has potency as a bank earnings season play. While it may be in the spotlight this week on par with KBWB or XLF, the equal-weight bank ETF could be worth considering in the latter stages of bank earnings season (next week and into early February). RYF is another example of a bank ETF with value tendencies. Approximately 60% of the fund's 68 holdings are classified as value stocks. Todd Shriber owns shares of XLF. ### More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Companies That Could Post Decelerating Profits * 10 A-Rated Stocks the Smart Money Is Piling Into * Mizuho: 7 Long-Term Value Stocks to Buy Now Compare Brokers The post 5 Best Bank ETFs for This Week's Earnings Avalanche appeared first on InvestorPlace.
Earnings beat prospect in Q4 for banks may be bleak, but a steepening yield curve and cheaper valuation could boost bank ETFs in the near term.
Sustained focus on increasing deposits and providing quality loans has helped Citigroup (C) strengthen its balance sheet. Its total assets increased 2% YoY (year-over-year) to ~$1.93 trillion at the end of the third quarter of 2018 mainly due to higher deposits, new assets, rate spreads, increased lending, and broking assets. However, the disposal of some legacy assets partially offset the growth.
According to Wall Street ratings, Bank of America (BAC) could be an intriguing choice for investors right now. As of August 23, 21 of the 29 analysts covering Bank of America stock have recommended a “strong buy” or “buy,” while the remaining eight have rated it a “hold.” None of them have given it a bearish rating. With Wall Street’s one-year forward price target of $34.57, the stock has an upside of ~11.6% from its current market price of $30.98.
David Konrad, an analyst at Macquarie Research, has downgraded his rating on Wells Fargo & Company (WFC) from an “outperform” to a “neutral.” He’s reiterated the previous target price of $63 on the stock. Wall Street’s target price of $62.31 represents an upside potential of ~8.6% from its current market price of $57.40. Analysts are bullish about Wells Fargo’s top peers Citigroup (C), Morgan Stanley (MS), and Bank of America (BAC) and have provided consensus “buy” recommendations on these stocks.
On August 23, Wells Fargo (WFC) announced that it planned to terminate the jobs of 638 employees in its home mortgage division due to subdued activity in the domestic housing market. The company revealed that the recent move coincides with a slowdown in the US housing market, as rising interest rates are hurting the demand for mortgage refinancing. Also, rising interest rates reduce the affordability of consumer real estate loans.
Investing in Citigroup Stock: Do Investors Think It Makes Sense? Citigroup (C) could be an intriguing choice for investors right now, according to Wall Street ratings. As of August 16, 20 of the 28 analysts covering Citigroup stock have recommended a “strong buy” or “buy” recommendation.
Second-quarter earnings arrived for big banks in earnest last Friday amid a spate of reports from the financial services sector. Exchange traded funds tracking financial services stocks were tested last ...
Consensus estimates are pegged at about 57 cents per share, which represents a decrease of a nickel compared to last quarter. If BofA exceeds these estimates, it will be a welcome rebound for all three ETFs after closing in the red during Friday's trading session--IYG was down 0.73%, XLF was down 0.48% and KBWB was down 0.57%. Much of that blame can be directed towards Wells Fargo who posted losses in their second quarter earnings report, sending their shares tumbling 1.20%.
It was more than a case of bad luck on Friday the 13th as Wells Fargo posted second quarter losses, stinging three financial ETFs with the heaviest weighting of Wells Fargo equities–iShares Evolved US ...
Though chances of a broad-based earnings beat are low in Q2 per the ESP trend, the outlook seems bright for financial ETFs, the outlook seems bright for financial ETFs.
Bank stocks and financial sector exchange traded funds may continue to strengthen as strong fundamentals help support this market segment’s outlook. Year-to-date, the Financial Select Sector SPDR (NYSEArca: ...
Chris Verrone, Strategas Research Partners, looks at bank stocks to buy right now. With CNBC's Melissa Lee and the Futures Now traders, Tim Seymour, Karen Finerman, Steve Grasso and Guy Adami.
Will an easing of Dodd-Frank turn the financials loose? With CNBC's Melissa Lee and the Fast Money traders, Tim Seymour, Karen Finerman, David Seaburg and Guy Adami.
Chris Verrone, Strategas Research Partners, makes his case for investors to keep buying the banks. With CNBC's Melissa Lee and the Fast Money traders, Tim Seymour, Karen Finerman, David Seaburg and Guy Adami.