|Bid||28.04 x 308700|
|Ask||28.08 x 309400|
|Day's Range||28.06 - 28.40|
|52 Week Range||22.05 - 28.75|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.12|
|Expense Ratio (net)||0.13%|
Bank stocks rallied Friday, with the sector set to post gains every day this week, boosted by the continued rise in Treasury yields. The SPDR Financial Select Sector ETF rose 0.7%, and has rallied 3.8% amid a 5-day win streak, and the SPDR S&P Bank ETF climbed 0.8% and has run up 7.4% this week. Among the more active bank stocks, J.P. Morgan Chase & Co.'s surged 1.2% toward a record high; the stock has shot up 9.9% amid an 8-day win streak. Elsewhere, shares of Bank of America Corp. rose 1.3% toward a 5th straight gain, Citigroup Inc. hiked up 1.5% and Wells Fargo & Co advanced 0.9%. The yield on the 10-year Treasury note rose 6.3 basis points toward a six-week high of 1.854% after upbeat data on retail sales. A rise in Treasury yields can help boost bank profits, as it can increase the spread what banks earn on longer-term assets that are funded with shorter-term liabilities. The financial ETF has gained 4.8% over the past three months and the S&P bank ETF has tacked on 4.0%, while the Dow Jones Industrial Average has advanced 4.3%.
Top-tier candidates Joe Biden and Elizabeth Warren are set to share a 2020 debate stage for the first time, leading pundits to brace for them to clash on Thursday night in Houston.
For the last few days the stock markets have been healthy. Sentiment has taken a turn to positive and it's like nothing bad is ever going to happen again. Just yesterday the indices rallied through incredible levels especially in small cap stocks. So there's no doubt that there are stocks to buy here.Today we discuss three high-profile stocks to buy: Visa (NYSE:V), Amazon (NASDAQ:AMZN), and Microsoft (NASDAQ:MSFT). These are fallen angels stocks because they have recently corrected off of their highs just when they looked like their rallies would never end. * 10 Battered Tech Stocks to Buy Now The time frames differ among them, but the concept remains the same. They were headed to the moon, then they tripped. So now the opportunity is to pick the right level to buy these stocks. All three management teams are impeccable and they rarely falter on their own. So the bullish thesis for all three AMZN, MSFT and V assumes that markets in general are not going to crash any time soon.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Microsoft (MSFT)It's hard to call MSFT stock a fallen angel stock because it's still up 34% year-to-date and it's only 5% off of the highs. Nevertheless, it has had a tough time in the last trading week, and what makes it interesting is that it did this while the equity markets were rallying hard.Normally, this raises an alarm and causes me to look into weaknesses which would bring sustained selling. But that's not the case here. This is a proven company who is merely having a normal price action give-and-take inside a very healthy ascending trend.Fundamentally MSFT is not cheap since it sells at 29 trailing price-to-earnings ratio and 8 times sales. But this is a company that deserves the benefit of the doubt so it is possible that they deliver strong growth to justify the higher valuations.This is all to say that Microsoft stock is not cheap but it still is a good one to own for the long term. So these dips are normal and should not cause a panic out of the stock.Technically, the zone around $130 per share is pivotal for MSFT stock. This was resistance in April, then a break out in June, and then a successful test for support in early August when markets fell in fear of the 10% additional tariffs tweet. So clearly the bulls earned the right to use it that support.Knowing this, makes it possible for the buy-programs to prevail over the bears in the battle over MSFT for as long as the equity markets are healthy. If I own shares, I don't panic out of them on these dips. Moreover, if I want to own some for the future then this is as good a time as any to start a position there.Alternatively I can use options to sell puts or spreads below said support to generate income without needing rallies. For this, it is important to note that if stocks correct this year from geopolitical risk, then Microsoft stock is vulnerable to a 12% correction. Visa (V)V stock is in a similar situation to that of Microsoft. It's a proven winner that was seemingly rallying to the moon without interruption. But then in the last few days, it fell 6% while the general markets are up big.Here too, the drop is not a reflection on Visa itself but rather part of normal price action. For the longest time credit card stocks with a presence in the fintech space like Visa and MasterCard (NYSE:MA) have been darlings because the investment dollars allotted to bet on financials shied away from buying money-center banks like Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM). Instead they piled into fintech.However the recent rally in yields caused a frenzied wave of buying the traditional banks and money has to come from the same bucket. So there is a rotation out of winners like V stock into laggards. The opportunity here is that rotations are usually temporary. Meaning the dip in Visa stock should be a buying opportunity.Just like Microsoft, Visa is not cheap. It sells at 35 trailing P/E and 18 times its sales. But this alone is not cause for alarm because that's how it's always been. So unless the bears have developed sudden incredible fortitude, I bet that the selling will abate soon.Technically, Visa stock should have support around $172 per share. Moreover there is bigger support from pivotal zones at $165 per share. So if I owned shares I don't panic yet. If seeking a long entry with room to spare, I like to sell puts into support zones on bad days to generate income as long as I can gauge the risk. * 10 Healthcare Stocks to Buy Despite the Headlines Visa stock is 7% off its highs, so if I sell a put in V stock at $160 per share I would own it after a 15% correction. This is a risk I can tolerate and I bet would be a fruitful one. I should know that there is short-term risk looming. if Visa falls below $183.75, it could invite sellers to $168 per share. Amazon (AMZN)I cannot write about potential upside of fallen angels stocks without including the biggest momentum story of all time. AMZN stock is one that has been in the news for decades. It draws critics and fans in droves and is subject to many a heated debate.After the May correction, Amazon stock made a nice recovery but it gave almost all of it back. And it now sits 10% lower than the July highs. The size of the moves in Amazon stock should never surprise investors. This is the mother of all momentum stocks and when it moves, it does it fast and long. So it is best to wait for confirmation of breakouts in either direction before trading it.Short term, Amazon stock rallies if above $1,853 per share, and could even recover what they lost since July. There will be resistance points along the way so it won't be easy. Conversely, if it falls below recent support near $1,740 then they could extend the correction down to $1,600 per share.In essence, the battle is between completing an ABC technical move lower or establishing a base for a rebound rally to breakout from the necklines above. Meanwhile, the AMZN stock is ping-ponging inside a tight range and I should chase the break out of either sides. I personally favor the upside potential for as long as the markets in general are healthy.For those thinking of turning this into an investment, Amazon is a safe bet in the long run in spite of its high valuation. It sells at 75 trailing P/E but only 3.4 x sales. So as long as they are delivering growth, a high P/E is a prerequisite. You have to spend a lot in order to grow a lot.We still have the same geopolitical risks we had when we first started this correction. So we are one headline away from rekindled panics. This is all to say that traders shouldn't take giant positions all at once with great conviction because we have are still hostage to headlines. The best homework can be obliterated short-term by silly headlines. So I don't risk what I cannot afford to lose.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. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post 3 Fallen Angel Stocks to Buy Before They Fly Again appeared first on InvestorPlace.
UBS analyst Saul Martinez backed away from his bullish view on Wells Fargo & Co.'s stock , citing a lack of visibility on profitability improvement as lower interest rates eats into net interest income (NII). Martinez cut his rating to neutral, after being at buy for the past 17 months, and lowered his stock price target to $49 from $51. Wells Fargo Chief Financial Officer John Shrewsberry said at the Barclays Global Financial Services Conference Monday that given the current interest rate environment, 2019 NII is now expected to decline 6% from 2018, after saying in July NII was expected to decline "near" 5%. While UBS's Martinez said this guidance cut was not a big surprise, it "nonetheless suggests considerably more pressure on NII in [the second half of 2019] than what was previously embedded in our estimates." The stock rose 0.2% in morning trading, to outperform both the SPDR Financial Select Sector ETF , which was up 0.1%, and the Dow Jones Industrial Average , which fell 60 points, or 0.2%.
Though the latest steepening of the yield curve benefited bank ETFs on Sep 9, chances of volatility in the longer-term period may keep gains in bank ETFs at check.
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.
Declining interest rates and increasing speculation that the economy is slowing are among the factors pressuring financial services exchange traded funds. While the S&P 500's third-largest sector weight is scuffling, some analysts believe there is upside to be had with the financial services sector, a group almost universally viewed as a value destination. In a note out Tuesday, AltaVista Research tagged XLF with an Overweight rating.
The Financial Select Sector SPDR (XLF) , the largest financial services ETF, and rival funds are under pressure, but that could also mean the S&P 500's third-largest sector is worth a look for tactical traders. Market observers have previously warned that Wall Street banks could face pressure as tepid market volatility could have contributed to more muted trading desk activity. Furthermore, the Federal Reserve has signaled its intentions to cut interest rates, which would further hurt the banking industry’s ability to generate profits from lending.
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%.
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.
Given the massive outflow and the bearish outlook, the appeal for financial ETFs, especially banks, has dulled. As a result, investors who are bearish on the sector right now may want to consider a near-term short.
The Financial Select Sector SPDR Fund (NYSE: XLF ), the largest exchange-traded fund tracking stocks in the S&P 500's third-largest sector, lost 1.56% last week. With interest rates declining, some market ...
Financial stocks were set up for a broad selloff Monday, weighed down by the continued drop in Treasury yields. The SPDR Financial Select Sector ETF shed 1.1% in premarket trading. Among the financial ETF's (XLF) more-active components before the open, shares of Bank of America Corp. dropped 1.6%, Citigroup Inc. slid 1.5%, J.P. Morgan Chase & Co. slid 1.6%, Wells Fargo & Co. gave up 1.3% and Goldman Sachs Group Inc. fell 1.6%. The yield on the 10-year Treasury note dropped 4.1 basis points to 1.690%, as growing concerns of increasing trade tensions drove demand for safe-haven assets. Lower long-term yields can hurt bank profits, as it narrows the spread between what banks earn on longer-term assets, like loans, and costs of shorter-term liabilities. the 10-year yield has declined 28.7 basis points so far this month, through Friday. The XLF has lost 1.1% over the past three months, while the S&P 500 has gained 1.3%.
The Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF, is lower by more than 5% this week. That’s ugly price action to be sure, but it may also belie significant opportunity ...
The last time I reviewed the Sector SPDR ETFs, I said that the rally was coming to an end and it certainly looks like it could be. Why did I make this prediction? I'm not psychic, it wasn't a guess, and I really couldn't care less about the Federal Reserve or trade wars. I thought that the rally was ending because various sector SPDR ETFs were running into resistance and the consumer discretionary sector was due for a pullback because Amazon (NASDAQ:AMZN) was overbought.As someone who traded at various hedge funds over the past 20 years, I can tell you with 100% certainty that the vast majority of moves made by the S&P 500 Index SPDR (NYSE:SPY) have nothing to due with what the so-called experts in the financial media are attributing to.In financial markets, there are certain price levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, prices are always doing one of 3 things. Going up, going down, or staying the same.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMost moves in the SPYs are caused by the reaction the underlying sectors that make up the S&P 500 make when they get to these levels or the trend changes. For example, if a sector gets to important support while being oversold, it tends to rebound. If it is not oversold, it tends to consolidate and break the level. It has nothing to do with what Jim Cramer is screaming about or what the analysts are saying. * 10 Cyclical Stocks to Buy (or Sell) Now If you want to get insight into the S&P 500 or SPY, you should look at how the various acting. For example, technology led most of the recent rally -- until the end when the consumer discretionary became more important. Different things drive and influence the market at different times.Let's look at some of the sectors to gain some insight into the future direction of the SPY. Financial Sector SPDR (XLF)The Financial Sector SPDR (NYSEARCA:XLF) has broken support at the important $28 level. This level is important because it was support through all of July, after being a resistance level in May.This will probably be the most important sector to watch over the next week or so. If the XLF fail to rebound back above this level it will be a signal that the SPY are going to trend lower.If the XLF continue to head lower, there may be some support around the $26 level. This is because this is where the lows were at the very end of May. Consumer Discretionary Sector SPDR (XLY)The Consumer Discretionary Sector SPDR (NYSEARCA:XLY) has also broken important support. The $121 level was resistance in April and June.One of the things that led the recent rally was the buying of AMZN stock. Amazon is about 20% of this sector, and as I mentioned last time, AMZN stock was the most overbought that it had been in two years. This brought sellers into the market and this made the stock, and the XLYs, go lower. * 10 Stocks to Buy on the Trade War Dip The dynamic here is similar to that of the XLF. If the XLY does not quickly rebound back over the $121 level, it will be another signal that the SPY is going to trend lower. Technology Sector SPDRs (XLK)The Technology Sector SPDR (NYSEARCA:XLK) has also broken its uptrend. If it continues to sell off, there will probably be some short-term support around $79. This is because this level was resistance in April and June. If it breaks, the broader markets will drop because the tech sector is the biggest part of the S&P 500.How does a resistance level become a support level? The investors who sold their stock at $79 thought they made the correct decision to sell when it traded lower. The short-sellers were looking at a profit.Then when it rallied through the $79 level, the sellers think they have made a mistake and decide to buy XLK if it gets back to $79. The short-sellers tell themselves that if they can cover and break even, they will. Those who bought it at $79 believe they made a good decision and tell themselves that they will add to their positions at $79 if they can.Added to this are the professional traders seeking to profit off of a clear level you can see that there are four groups who want to buy XLK at $79. This demand creates a support level. Healthcare Sector SPDR (XLV)The Healthcare Sector SPDR (NYSEARCA:XLV) has been trending lower over the past month. There will probably be some support around the $90 level because it was resistance in May. * 8 of the Most Shorted Stocks in the Markets Right Now If the XLV finds support around $90 and breaks the downtrend, it could stabilize the SPY. The reaction that the XLV makes if and when it gets to $90 will be important to consider. Energy Sector SPDRs (XLE)The Energy Sector SPDR (NYSEARCA:XLE) continues to trend lower.The XLE started its downtrend last month when it failed at resistance around the $64.50 level. This level was resistance in May, and then again in July.A break of the downtrend line here could be a signal that the selloff that has occurred in the SPY may be coming to an end. Industrial Sector SPDR (XLI) The Industrial Sector SPDR (NYSEARCA:XLI) failed at the resistance at the $78.50 level.You don't need to be a market guru or a master trader to see that this level is important. It was resistance at the end of April and in early May. The XLI has also broken its recent uptrend that began in June. Obviously drawing trendlines is an art and not a science, but if you understand what they illustrate you can profit. * 10 Generation Z Stocks to Buy Long When markets are going up, the forces of demand are in control, and when they are trending lower the forces of supply are in control. If they are consolidating or trading sideways, the forces are equal. The breaking of a trendline means that the leadership may be about to change or equalize. The break of the uptrend line here could be an early indication a downtrend is beginning. S&P 500 SPDR (SPY)The S&P 500 SPDR ETF is testing important support. These are some dynamics to consider to gain insight into whether or not this important level will break or hold. Probably the most important thing to watch is how the XLF reacts to the $28 level. If they do not rebound over the next few days, it will be very bearish for the SPY.It is also important thing is how the XLY reacts to the $121 level. If it does not rebound over the next few days and this level becomes resistance, this could also be very bearish for the SPY.The way the XLK reacts to the $79 support level is important as well. If this level breaks, watch out below.I will also be watching to see if the trends in the XLV and XLE continue. A break of these downtrend lines would be bullish for the SPYs.Most of the dynamics that I see are bearish and I do expect the market to start trending lower. Every time the market sells off after a rally, it seems like people forget that markets go down as well as up.Considering the gains that the market has made since early June some profit taking would not be surprising.As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy on the Trade War Dip * The 5 Highest-Rated Dow Stocks Right Now * 4 Cybersecurity Stocks to Buy for Long-Term Gains The post 7 SPDR ETFs and What They Tell Us About the Market appeared first on InvestorPlace.
J.P. Morgan’s quant strategist Marko Kolanovic is eyeing a key silver lining in this past week of stock market volatility that few are talking about: stock buybacks. Scott Gamm explains.