|Bid||23.53 x 3100|
|Ask||23.52 x 39400|
|Day's Range||22.67 - 23.49|
|52 Week Range||17.49 - 31.38|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||-22.57%|
|Beta (5Y Monthly)||1.23|
|Expense Ratio (net)||0.13%|
Pressured by low interest rates, financial stocks are disappointing investors in a big way this year. For example, the Financial Select Sector SPDR Fund (NYSEARCA:XLF) - the largest financial ETF - is down 25.37% year-to-date while the S&P 500 is off just 3%.Low interest rates suppress banks' net interest margins (NIM), or the difference between the interest banks make on loans and what must be paid out to depositors. The depressed NIM scenario was an issue for banks last year, but it was exacerbated earlier this year when the Federal Reserve took rates to near zero in response to the novel coronavirus pandemic.The erosion in market value in the financial services sector is palpable. As recently as last year, the group was the third-largest sector weight in the S&P 500. These days, it resides in the fifth spot and that's not the end of the sector's struggles.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 7 Best Stocks to Invest in Right NowMore recently, the Federal Reserve revealed the results of its annual stress test and the message was clear: the largest U.S. banks can't raise dividends or engage in buybacks. Wells Fargo (NYSE:WFC) even pared its payout to conserve cash for bad loans.On the upside, the Fed eased the Volcker Rule, potentially setting the stage for banks to deploy capital into alternative investments. Additionally. Financial services is one of the least expensive sectors, perhaps indicating the following financial ETFs offer investors some value: * ARK Fintech Innovation ETF (NYSEARCA:ARKF) * Invesco S&P SmallCap Financials ETF (NASDAQ:PSCF) * VanEck Vectors BDC Income ETF (NYSEARCA:BIZD) Financial Stocks to Buy: ARK Fintech Innovation ETF (ARKF)Source: Shutterstock Expense ratio: 0.75% per year, or $75 on a $10,000 investmentWhile the traditional financial services sector is scuffling this year, its disruptive fintech counterpart is doing the opposite. Just look at the ARK Fintech Innovation ETF, which as of July 2 is up a stellar 45% year-to-date. As noted above, many old school bank stocks are being hamstrung by the Covid-19 pandemic, but ARKF holdings, such as PayPal (NASDAQ:PYPL) and Square (NYSE:SQ), are thriving amid the chaos.For example, the virus is accelerating the shift to contactless payments, a boon for the likes of Square, PayPal and other fintech companies."The market assumes that COVID-19-related adoption of digital payments is a near-term benefit for Payments providers, offsetting some of the consumer spend headwinds," said Morgan Stanley in a research note. "However, digitization of Payments is part of a multi-year secular growth driver in Payments, with COVID-19 as just the latest accelerator."Then there's the emergence of digital wallets, such as PayPal's Venmo and Square's Cash App. Essentially, digital wallets are smartphone-based apps that provide many of the same functions as traditional banks at a fraction of the customer acquisition cost. Invesco S&P SmallCap Financials ETF (PSCF)Source: Shutterstock Expense ratio: 0.29% per yearThe Invesco S&P SmallCap Financials ETF is a traditional financial services ETF and its year-to-date loss of 32.17% is reflective of that status. With that statistic in mind, it would be easy to write off PSCF and focus on other opportunities, but investors may not want to be so hasty.There are overt signs of life with small-cap stocks. Over the past three months, the S&P SmallCap 600 Index, the index in which PSCF components reside, is outpacing the S&P 500 by almost 400 basis points. Another point in favor of this financial ETF is that the Fed typically doesn't dictate dividend policy to smaller banks. PSCF yields 5.87%, or 405 basis points more than the S&P SmallCap 600 Index. * 7 Environmental Energy Stocks to Watch as Summer Sets InSomething to consider: PSCF allocates over 42% of its weight to stocks designated as small-cap value names. That's relevant because small-cap value is, historically, a rewarding combination, but even more so when dividend yields between that segment and large caps drift apart. PSCF yields nearly three times as the S&P 500. VanEck Vectors BDC Income ETF (BIZD)Source: Shutterstock Expense ratio: 9.62% per yearNo need to do a double take on that expense ratio because it is what's listed on the issuer on the site, but the VanEck Vectors BDC Income ETF has some perks, including a 30-day SEC yield of 14.03%. That's a source of allure at a time when Treasuries offer up puny yields. Plus, like a bond, BIZD delivers monthly payouts.Business development companies (BDCs) loan capital to financially distressed companies, typically smaller and midsized firms. That underscores some of the risk associated with BIZD in the current market environment as some BDCs themselves are grappling with reduced access to capital coupled with the specter of rising default rates among borrowers.BDCs are dealing with another headwind: many of the companies they lend to are issuing shares to raise additional capital, thereby diluting BDCs' equity in the borrowers.Like any other high-yield asset class, BDCs, as noted above, deal with default risk, but many BDCs issue loans that are higher up in the pecking in the order should the borrower declare bankruptcy, meaning the lending BDC has claim to some compensation above junior lenders.Investors willing to wait for default waits to trend lower could be rewarded with upside in BIZD and they'll compensated for their patience with an alternative source of income.Todd Shriber has been an InvestorPlace contributor since 2014. He owns shares of XLF and SQ. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post 3 Great Financial ETFs to Buy for Profits appeared first on InvestorPlace.
In this week's episode of Influencers, Andy is joined by Avenue Capital Group CEO and Milwaukee Bucks Co-Owner, Marc Lasry, as they discuss the pandemic's impact on the global economy, why he's throwing his support behind Joe Biden, and the return of the NBA.
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Mike Ryan, UBS Wealth Management Americas Chief Investment Officer, Yahoo Finance’s Brian Sozzi and Jared Blikre to discuss the latest market action.
Shares of large banks required to undergo the Federal Reserve's stress tests took a hit in premarket trading Friday, after the Fed voted to require the suspension of stock buybacks and to cap dividends, given the uncertain outlook resulting from the COVID-19 pandemic. Although the banks passed the Fed's tests, the Fed said some banks may have to cut dividends. The SPDR Financial Select Sector ETF fell 1.4%, after rallying 2.7% on Thursday to bounce off a 5-week low. Among the more-active components ahead of the open, shares of Wells Fargo & Co. shed 2.7%, Bank of America Corp. fell 2.3%, Citigroup Inc. slipped 0.8%, J.P. Morgan Chase & Co. dropped 1.4% and Goldman Sachs Group Inc. gave up 3.2%. The selloff comes while futures for the Dow Jones Industrial Average slipped 54 points, or 0.2%.
Brian Belski, Chief Investment Strategist at BMO Capital, joins The Final Round to discuss the day's market action and the primary factors driving recent volatility.
The markets closed in the green after Thursday’s trading session amid worries of escalating coronavirus cases. The financial sector was the big winner after regulators eased the Volcker rule on big banks. The Final Round panel discusses the latest.
The stock market late-morning Thursday jumped into positive territory after a report indicated that officials from the Federal Deposit Insurance Commission would move to ease some regulations for the banking sector following a meeting. According to a Bloomberg report,cited by CNBC, the FDIC and another regulator, the Office of the Comptroller of the Currency, will soon vote on rolling back rules that prohibit banks from using their balance sheets to invest in companies and other assets, the regulators may also loosen rules pertaining to the amount of cash and cash equivalents the financial institutions would be required to set aside for reserves. The rules are related to regulations that were implemented in the aftermath of the 2008-09 financial crisis, known as the Volcker Rule, named after former Federal Reserve Chairman Paul Volcker. Shares of banks briefly burst higher on Thursday. The exchange-traded fund Financial Select Sector SPDR ETF which tracks the S&P 500's financial sector, was trading 1.5% higher, as was the SPDR S&P Bank ETF and the Invesco KBW Bank ETF . The S&P 500 index was off less than 0.1%, at last check, while the Dow Jones Industrial Average was trading little changed at 25,442 and the Nasdaq Composite Index was about 0.1% higher at 9,913. The broader market had started trade lower amid signs of rising coronavirus cases. The reports for banks also come ahead of a stress test of the financial sector, with the results expected to be released at 4:30 p.m. Eastern Time Thursday.
The markets closed in the green after Tuesday’s trading session, with the ten of the eleven sectors posting gains as hopes for a coronavirus vaccine rose and U.S. - China trade fears diminished. The Final Round panel discusses the latest.
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The markets closed in the green after Monday’s trading session, with the financial and communication sectors leading the way as the Federal Reserve announced it would purchase individual, corporate bonds as part of its lending program to add liquidity to the economy. The Final Round panel discusses the latest.
Bank stocks continued to sell off early Thursday, as Federal Reserve Chairman Jerome Powell squashed any hopes that interest rates will rise anytime soon, which could keep pressure on profits. The SPDR Financial Select Sector ETF dropped 4.5% in premarket trading, after shedding 5.8% the past two days. Among the more active components, Wells Fargo & Co.'s stock dropped 7.7% premarket, after tumbling 9.0% on Wednesday. The company said Wednesday at the Morgan Stanley Virtual U.S. Financials Conference that 2020 net interest income (NII) was expected to be $41 billion to $42 billion, while the current FactSet consensus is $43.8 billion. J.P. Morgan analyst Vivek Juneja said that NII outlook makes it "very likely" that Wells Fargo will cut its dividend. Elsewhere, shares of Bank of America Corp. sliumped 6.6% in premarket trading Thursday, Citigroup Inc. slid 6.9% and J.P. Morgan Chase & Co. fell 5.7%. Low interest rates can hurt bank earnings as it can narrow the spread banks earn on shorter-term loans. Meanwhile, Dow Jones Industrial Average continuous futures plunged 726 points, or 2.7%.
Financial-sector exchange-traded funds pushed higher Friday as bond yields rose after a blowout May jobs report nudged investors into riskier assets. The Financial Select Sector SPDR Fund was 4.7% higher at midday, while the Invesco KBW Bank ETF was nearly 6% higher. Bond yields move in the opposite direction of prices. The gap between 2-year Treasury notes and those maturing in 10 years touched its widest in about two years, bolstering the business case for banks.
Exchange-traded funds made up of energy and financial stocks surged Friday morning after an unexpectedly strong U.S. payrolls report. The Financial Select Sector SPDR Fund popped nearly 7% in the first half hour of trading, while the Energy Select Sector SPDR Fund rose nearly 4%. It was the biggest one-day move for XLE in three weeks, which is still down more than 25% in the year to date. XLF is down nearly 15% in that period. Investors are finding value in sectors of the economy that have suffered more under the coronavirus lockdowns, and which are more likely to outperform as the economy recovers sooner than expected, as the jobs report signals.
Technically speaking, the U.S. benchmarks’ bigger-picture backdrop continues to strengthen amid market rotation, writes Michael Ashbaugh.
Financial stocks were set for a broad rally Tuesday, with the SPDR Financial Select Sector ETF climbing 1.2% in premarket trading. The top two early gainers among the Dow Jones Industrial Average's components were financial stocks, with shares of American Express Co. rising 1.8% and J.P. Morgan Chase & Co. gaining 1.5%. Fellow Dow component Goldman Sachs Group Inc.'s stock rose 1.0%. Meanwhile, Dow futures advanced 150 points, or 0.6%. Among other more actively traded financial stocks in the premarket, Bank of America Corp. rallied 1.8%, Wells Fargo & Co. climbed 1.9% and Citigroup Inc. tacked on 2.2%. Helping provide a lift to bank stocks, the yield on the 10-year Treasury note rose 1.3 basis points to 0.675%. Higher longer-term rates can help boost bank profits, as that can widen the spread banks earn on longer-term assets, such as loans, that are funded by shorter-term liabilities.
Exchange-traded funds that track financial sector stocks outperformed Monday as interest rates shifted to the benefit of banks and other lenders. The Financial Select Sector SPDR Fund was 1.3% higher midday, and the SPDR S&P Regional Banking ETF was 1.7% higher. The Invesco KBW Bank ETF popped 2.3%. Although interest rates remain low across the board, the difference between 5-year bonds and those with 30-year maturities has recently widened to the biggest differential since May 2017, according to a MarketWatch analysis, a condition that's more favorable for banks that make loans and pay interest on deposits. That so-called steepening of the yield curve comes as a report on manufacturing suggested the U.S. economy may have begun to recover from a steep decline during the spring due to coronavirus lockdowns.
Stocks closed at their highest levels since at least March, ending Friday’s volatile session mostly higher after President Donald Trump announced retaliatory measures against China that were less negative for markets as some had feared. Myles Udland, Sean Smith, Rick Newman, and Akiko Fujita discuss on The Final Round.
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Stocks rose Wednesday and pushed passed earlier concerns over increasingly tense U.S.-China relations, which had sent the S&P 500 and Nasdaq into negative territory earlier in the session.
Exchange-traded funds that track the financial sector outperformed the broader market Wednesday, extending a winning streak that suggests investors are wagering on an economic recovery that could help propel financial shares higher. Financials were the best performer among the S&P 500's 11 categories. The Financial Select Sector SPDR Fund was trading 3% higher in morning action. The Vanguard Financials ETF was 3.1% higher, and the SPDR S&P Bank ETF jumped more than 4%. Financials have taken a beating as investors worry about the impact of a stalled economy in the wake of the coronavirus pandemic and the pain from a plunge in oil prices on companies' ability to service their debt. Rock-bottom interest rates don't help banks, either. XLF is down more than 22% in the year to date. But on Wednesday, technology companies sold off, sending the Nasdaq Composite Index down nearly 1%. If investors are swapping high-flying bets for stocks considered undervalued, it may suggest more confidence in the economic outlook in the aftermath of the viral outbreak.