54.25 -0.04 (-0.07%)
After hours: 4:19PM EDT
|Bid||54.00 x 2900|
|Ask||54.61 x 1100|
|Day's Range||53.78 - 54.36|
|52 Week Range||43.95 - 57.52|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||17.83%|
|Beta (3Y Monthly)||1.41|
|Expense Ratio (net)||0.35%|
Fed Chair Jay Powell is heading to Capitol Hill. Investors are watching as he is set to testify before the House Financial Services Committee and Senate Banking Committee this week. Yahoo Finance's Seana Smith and RDQ Economics Chief Economist John Ryding discuss.
The SPDR S&P Regional Banking ETF (NYSEArca: KRE), the largest ETF dedicated to regional bank equities, is up just 7.25% this year, about half the gains posted by diversified financial services ETFs. KRE ...
The Federal Reserve could make major changes to bank rules and alleviate some of the pressure on the financial sector and related ETFs. The Fed said it would vote October 10 on a measure to ease liquidity ...
Fear of global economic slowdown, trade war worries, lower rates and flattening of yield curve are likely to adversely impact banking sector earnings in the near term.
Bank sector-related ETFs found strength Monday as government bonds pulled back and yields climbed on easing investor fears surrounding a U.S.-China trade war that has shown signs of de-escalation. On Monday, ...
Traders are always on the lookout for the next short squeeze candidate. Short squeezes can send share prices skyrocketing in a matter of minutes and hours, and traders who are along for the ride can make ...
The August job-growth report indicates addition of 130,000 jobs, down from the commendable July figures, which might impact the Fed officials' further course of action.
These are interesting times for the U.S. bond markets. The acronym TINA -- which stands for there is no alternative -- suggests that global money is flowing into the U.S. bond because there truly is no alternative for it abroad. Almost all other bond markets have negative yields.So as a result of increased demand, U.S. bond yields are falling off a cliff and that is wreaking havoc in financial stocks. But therein lies the opportunity. Among the wreckage, JP Morgan (NYSE:JPM), Bank of America (NYSE:BAC), and Goldman Sachs (NYSE:GS) are three beaten-down bank stocks to buy right now for the long term.These bank stocks are the cream-of-the-crop when it comes to us financial institutions. Citigroup (NYSE:C) would have also made the list but I worry about their potential exposure to European financial markets.InvestorPlace - Stock Market News, Stock Advice & Trading TipsJPM, BAC and GS are survivors of the 2008 financial catastrophe. So these management teams have proven that they can navigate through crisis and emerge stronger on the other end.Moreover, this time the crisis is in bank stocks not the actual institutions. Thanks to the regulatory stress tests, we know that all three banks are healthier than ever on their balance sheets. Proof is that they are buying back their own stocks and paying out dividends.So the concern that these are broken companies is wrong. These bank stocks are temporarily hindered by the headlines in the bond market. The Federal Reserve is likely to cut rates several times in the next few months to catch up with the bond market. Fed Chair Jerome Powell has no option but to do that whether he wants to or not.So in theory bank business models will be fine and that the headline fears are exaggerated. In other words JP Morgan, Bank of America and Goldman Sachs stocks will be higher in the future.While buy-and-hold is the traditional way of investing in quality stocks, banks of late have frustrated the masses with their timing. That is why today I shared the method of selling puts to trade them. * 7 Stocks to Buy In a Flat Market Compare these three options setups in JPM, BAC, and GS stocks to buying the stocks here and hoping for a rally. I am more confident that I will profit without any money out of pocket -- and with a big buffer from the current price. This way I can let the risk of headlines work themselves out far away from my position in these bank stocks. JPMorgan (JPM)Consensus among experts is that JPM is the best financial stock. They rarely give investors specific reasons to sell their stock. So it makes sense that if markets are higher, then JPM stock is also higher. On that logic it's a buy right here.But just like all other bank stocks, the rallies for JPM are few and far between. And when they come they don't last. So there is truth in the meme that banks do not hold their greens. This is in spite of them being cheap.So instead of betting on upside potential I'd rather bet on their value. To do that I use the options markets where I can sell JPM puts to generate income. This is ideal in a stock that has value, but also is finding it hard to rally. This describes closely JPM stock and all the rest of the financials today.So in this case, I prefer to sell the December JPM $90 put and collect $1 to open. To win all I need is for JPM stock to stay above my strike this year. If it doesn't, I own the shares at a 18% discount from here and breakeven at $89 per share.Technically, JPM stock chart doesn't confirm the meme. It is in line with the S&P 500 this year. Above $110.70, JPM can rally another $2 from there. Conversely, if the bears push it below $104.3 it can fall to 98 from there. If I own the shares now I'd stop myself at $107.20 but that depends on investor preference. Bank of America (BAC)Similar to JPM, BAC stock is also a high quality stock. Management not only survived the 2008 crash but they also saved other banks along the way. And now BAC stock is a leaner meaner financial institution with hardly any exposure the global financial risks.The BAC stock chart resembles that of JPM so it's also hard to buy and hold for profit unless the investor timeline is more than three years. So here too I prefer to sell puts or spreads to generate income than bet on upside potential.For example, I can sell the BAC $25 January 2020 put and collect almost $1 for it. This way the stock can fall 9% and I can still retain my maximum gains. The worst that could happen is BAC stock fails and I own it at a discount. I accumulate losses until $24.10. * Dorian's Impact on the Markets I chose the BAC $25 level because technically that has been the biggest pivot level for almost three years. In October of 2017 the BAC bulls broke out from it and only lost it temporarily during last year's Christmas crash. Owning BAC stock there leave little risk below and would make a good entry point. Goldman Sachs (GS)Of the three tickers I discussed today, GS stock is my least favorite. This is nothing against the company but it does carry outside headline risk. But this also makes it the bank stock with the most potential profit.Unlike JPM or BAC stocks, GS is still stuck in the middle of the five year range. The other two have already taken 15% leaps higher. Shorter term, I would ideally want to chase GS stock -- but not before it breaches above $206 or $209 per share. Because then they would trigger bullish patterns to retest $220. Once there, GS would then have even more upside opportunities.But, instead of buying shares of GS stock and hoping for this rally to unfold, I can profit while I wait. I sell the GS October $180 put and potentially generate $1.60 per contract in pure profit without any out-of-pocket expense. Doing this would leave me with a 10% buffer from current price. Technically, GS must hold above $193 or it risks retesting the May lows near $180 per share.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 for free here.The post 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term appeared first on InvestorPlace.
Bank stocks took a broad beating Tuesday, as the tumble in 10-year Treasury yields to a fresh three-year low following disappointing manufacturing data cast a pall on the financial sector. The SPDR S&P Bank ETF slid 2.1% with 87 of 90 equity components losing ground, while the SPDR S&P Regional Bank ETF shed 2.3% with all 122 components falling. Meanwhile, the SPDR Financial Select Sector ETF dropped 1.3% with 58 of 68 components declining, but 7 of the gainers were insurance companies, 2 were trading platforms and 1 was a credit rating agency. Of the more-active banks, shares of Bank of America Corp. dropped 2.6%, Citigroup Inc. gave up 2.0%, Wells Fargo & Co. lost 1.3%, J.P Morgan Chase & Co. declined 1.5%, Huntington Bancshares Inc. fell 2.9% and Regions Financial Corp. dropped 2.7%. The 10-year Treasury yield declined 6.7 basis points to 1.439%, the lowest yield seen since July 2016. Lower longer-term yields can pressure bank profits, as it narrows the spread banks earn by usual practice of funding longer-term assets, such as loans, with shorter-term liabilities. The bank ETF (KBE) has now shed 18.9% over the past 12 months, while the 10-year yield has been cut in half and the Dow Jones Industrial Average has edged up 0.5%.
Regional banks and sector-related ETFs could be particularly sensitive to an inverted yield curve. “Asset sensitive” banks that are heavily weighted towards floating-rate loans could face a hit to their ...
The selloff in financial stocks isn't unanimous Tuesday, but it's pretty close, as the yield on 10-year Treasurys resumed their decline after a two-day bounce off last Thursday's 3-year low. The SPDR Financial Select Sector ETF shed 1.1%, with 64 of 68 equity components trading lower, and was the biggest decliner of the SPDR sector ETFs tracking the S&P 500's 11 sectors. Meanwhile, the SPDR S&P Bank ETF slumped 1.3% with 89 of 90 components losing ground and the SPDR S&P Regional Banking ETF slid 1.4% with 119 of 122 components declining. There is some overlap among the 3 ETFs' components. Among the more active stocks, Bank of America Corp. shed 1.9%, Citigroup Inc. fell 0.9%, Regions Financial Corp. lost 2.0% , Wells Fargo Co. gave up 1.0% and J.P. Morgan Chase & Co. slipped 1.0%. Meanwhile, the 10-year Treasury yield declined 4.2 basis points (0.042 percentage points) to 1.556%. Lower long-term yields can hurt bank profits, as it reduces the spread they earn from funding longer-term assets, like loans, with shorter-term liabilities.
Plunging bond yields have sent the stock market into a tizzy. And "inverted yield curve" is the new buzzword littering news sites everywhere. In today's gallery, we'll shed light on what all the fuss is about and identify three bank stocks to sell.When investors see turbulent seas on the horizon, they seek shelter. And nothing is perceived as a safer place to hide from the storm than treasury bonds. The demand surge sends prices to the moon and yields (which move inverse to prices) into the basement. Buyers' appetite has been so voracious that the 30-year treasury yield just dipped below 2% for the first time ever.The beating in long-term rates has been so severe that they've fallen below short-term rates creating the so-called yield curve inversion. It's a signal that has precipitated every recession in the modern era and has investors justifiably spooked.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks Under $5 to Buy for Fall And that brings us to bank stocks. When long-term interest rates fall below short-term interest rates, it puts a damper on their earnings potential. Throw in the specter of a recession, and you have a toxic brew poisoning the performance of financial companies.Let's take a closer look at three bank stocks to sell. Bank Stocks to Sell: Bank of America (BAC)Bank of America (NYSE:BAC) has been a ship without a rudder this year. Ever since its January rally reversed the fourth-quarter beatdown, BAC stock has been chopping in a range, unable to pick a direction. This month's market bloodbath has pushed BAC 15% off its highs.The stock is now testing the lower end of its range and is threatening a breakdown that would deal a nasty blow to its technical posture. Given the speed of last year's descent and the January rebound, there isn't much support between $26.50 and $22.50. The downside follow-through could be swift if buyers don't emerge to defend the $26.50 zone.Source: ThinkorSwim Even if we don't breach support, Bank of America's stock chart is a hot mess that will need time to heal. If you want to speculate on further downside, buying the November $28/$23 put spread for $1.80 is a solid idea. The risk is $1.80, and the reward is $3.20. Wells Fargo (WFC)Wells Fargo (NYSE:WFC) has fared worse than BAC this year. It completely reversed January's strength and is fast-approaching December's pivotal low of $43. If anything, the relative weakness makes WFC a more tempting target for bear trades and a better bank to bail on if you own it.All major moving averages are pointing lower, making it impossible to spin a bullish narrative. With the price submerged beneath these trend-following indicators, rallies remain suspect and strength is made for selling.Source: ThinkorSwim A break of $43 would push WFC stock to a six-year low and complete a multi-year top on its trend. If you're holding out hope that bulls swoop in to save it, then consider $43 your abandon ship point. * 15 Growth Stocks to Buy for the Long Haul To bank on additional weakness, consider buying the November $45/$40 put spread for $1.80. The risk is $1.80, and the reward is $3.20. Regional Banking ETF (KRE)Our final pick aims for the entire banking sector via the Regional Banking ETF (NYSEARCA:KRE). Its diversified holdings offer exposure to mid-size banks across the nation. It is thus very sensitive to economic shifts that adversely impact the sector.The past six months have seen a vicious tug-of-war between bulls and bears. This week's breakdown finally declared sellers the victor and spells trouble for KRE stock's technical posture. Yesterday's drop has the fund testing the $49 support area. A breakdown could send it back to December's low at $44.Source: ThinkorSwim If you believe bears will continue to roam through year-end, then buy the December $50/$45 put spread for $2. The risk is $2, and the reward is $3.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 * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post 3 Battered Bank Stocks to Bail On appeared first on InvestorPlace.
Federal is highly expected to cut interest rates by a quarter point for the first time in more than a decade. A few ETFs will benefit if the Fed cuts rates as expected, while a few may be adversely impacted.
Slack net interest margin guidance could be a sign that banks are baking in an imminent interest rate cut by the Federal Reserve. Regional banks are particularly sensitive to net interest margin weakness, perhaps explaining why the SPDR S&P Regional Banking ETF (NYSE: KRE), the largest exchange traded fund tracking the industry, is lower by 1% this week. Additionally, some traders see a technical case for shorting the bellwether regional bank ETF.
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.
Recently released results of the Federal Reserve’s Comprehensive Capital Analysis and Review, or CCAR, pave the way for major U.S. banks, such as Bank of America (BAC) and JPMorgan Chase & Co. (JPM) , among others, to significantly increase share buybacks and dividends. Regional banks are expected to get in on the act, too. The SPDR S&P Regional Banking ETF (KRE) , the largest regional bank exchange traded fund, has a dividend yield of just 2.21%, implying plenty of room for dividend growth.