|Bid||0.00 x 4000|
|Ask||0.00 x 800|
|Day's Range||52.65 - 53.26|
|52 Week Range||43.95 - 64.60|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||1.33|
|Expense Ratio (net)||0.35%|
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.
Shares of Comerica Inc. dropped 2.0% in premarket trading Wednesday, after the Texas-based regional bank reported a second-quarter profit and net interest income (NII) that missed expectations, and provided a downbeat NII outlook. Net income was $298 million, or $1.94 a share, after earnings of $326 million, or $1.87 a share, in the year-ago period. Adjusted EPS rose to $1.94 from $1.90, but was below the FactSet consensus of $2.00. NII increased to $603 million from $590 million, but missed the FactSet consensus of $609 million, as an increase in deposit costs and higher levels of funding to support loan growth offset an increase in average loans and an additional day in this year's quarter. For 2019, the company NII growth of 2%, while the FactSet consensus of $2.42 billion implies 2.8% growth. The stock has shed 9.5% over the past three months, while the SPDR S&P Regional Banking ETF has slipped 3.8% and the S&P 500 has gained 3.6%.
Shares of KeyCorp shed 2% in premarket trading Tuesday, after the regional bank disclosed that it had discovered "fraudulent activity" conducted by a business customer of its KeyBank National Association subsidiary. The bank said while it continues to investigate the activity associated with the transactions, which were conducted in the third quarter of its 2019 fiscal year, it estimates the potential exposure to the bank of up to $90 million. KeyCorp said it was working with law-enforcement authorities and believes the incident is "an isolated occurrence involving a single business relationship." The stock had gained 3.6% over the past three months through Monday, while the SPDR S&P Regional Banking ETF has declined 3.7% and the Dow Jones Industrial Average has advanced 3.4%.
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.
Shares of regional bank traded broadly lower Monday, led by the stocks downgraded at Raymond James, on concerns over the effect of lower interest rates and reduced loan growth projections. The SPDR S&P Regional Banking ETF slumped 1.0%, with 118 of 124 components losing ground. The biggest decliner was SVB Financial Group's stock , which fell 3.1% after Raymond James' Michael Rose cut his rating by two notches to market perform from strong buy. Among other stocks downgraded by Rose, Commerce Banchshares Inc. fell 2.4% after it was cut to underperform from market perform; East West Bancorp Inc. shed 2.1% after being downgraded to to underperform from market perform; and PacWest Bancorp. lost 1.8% after being downgraded two notches to market perform from strong buy. Rose said with the probability of at least one interest rate cut by the Federal Reserve currently at 100%, and with the yield curve inverting further, he cut his earnings and net interest margin estimates. He said recent Fed data also shows loan growth has decelerated from recent quarters. Meanwhile, Signature Bank's stock eased 0.1% after Rose upgraded it to strong buy from outperform. The regional bank ETF has lost 0.7% over the past three months while the S&P 500 has gained 2.7%.
Bank stocks rally as strong June 2019 jobs report indicates that the Federal Reserve will likely be less aggressive in interest rate cuts.
The SPDR S&P Regional Banking ETF (KRE) , the largest regional bank exchange traded fund, slumped more than 3% last week and lost nearly 9% in May. The inverted yield curve is likely one reason why regional bank stocks and ETFs like KRE stumbled last month. Rising interest rates historically benefit regional banks. Higher interest rates would help widen the difference between what banks charge on loans and pay on deposits, which would boost earnings for the financial sector.
The trade war between the United States and China is well into its second year. Since Jan. 22, 2018, American stocks have made two runs into all-time-high territory, but overall, they haven't made much progress. The Standard & Poor's 500-stock index is just 2% higher than when the trade conflict started.Now, uncertainty has returned, which means volatility has returned. So today, we'll look at some of the best exchange-traded funds (ETFs) to battle another round of trade jitters.On-again, off-again talks between the U.S. and China seemed headed toward a resolution for most of 2019 but hit a considerable wall in May. The U.S. accused China of walking back some of its agreements and raised tariffs on $200 billion in Chinese imports from 10% to 25%, prompting Beijing to retaliate with new and escalated tariffs of its own.Certain sectors have taken on hair-trigger demeanors. For instance, technology, which experts think could be heavily targeted in future rounds of tariffs, swings daily on the latest comings and goings out of Washington and Beijing. Semiconductor companies, many of which generate gobs of their sales from China, are among the most susceptible stocks.The best ETFs to buy if you want to beat back the trade war, then, avoid these sensitive industries and instead focus on businesses that should come out far less scathed than others. Here, we look at seven top funds from various corners of the market. SEE ALSO: The 19 Best ETFs for a Prosperous 2019
Bank stocks perform dismally as a number of issues including an inverted yield curve on increasing fears of economic slowdown and the Federal Reserve's dovish monetary policy shake the markets.
Volatility seized Wall Street following Wednesday's Fed announcement. But it was bank stocks that bore the brunt of the damage, which is unfortunate. Many of these money centers were just starting to emerge from well-established bases that could have supported their next up-leg.So much potential wasted.As expected, the Fed held the target for the benchmark rate steady at 2.25% to 2.50%. Furthermore, Jerome Powell and crew indicated that they wouldn't be raising rates any further for 2019. In fact, the next move could be a rate cut. With rates potentially at their peak for this cycle and future GDP growth projections getting slashed, investors jettisoned financial stocks from their portfolios throughout the afternoon.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe Regional Bank ETF (NYSEARCA:KRE) was hit especially hard, falling 3.4% amid massive distribution. Relative weakness continues this morning with most banks in the red while the rest of the market is ripping. * 5 Stocks To Buy for the Happiest Employees Let's take a closer look at three bank stocks that are suffering. You should avoid two of them while buying the third. Click to Enlarge Source: ThinkorSwim Bank of America (BAC)Yesterday's swoon upended what was otherwise a beautiful breakout in the making for Bank of America (NYSE:BAC) -- and other bank stocks. Here's my technical take. Since gapping higher mid-January on better-than-expected earnings, BAC stock built a clean two-month base. But with the break attempt now rejected, we've returned to the chop zone.Thus far this morning's testing of the range's lower bound is holding, and that's a good thing. Bulls do not want to see a close below $28 support.Until BAC can clear the ceiling at $29.80, it's dead money, so steer clear. Click to Enlarge Source: ThinkorSwim Goldman Sachs (GS)This year's behavior in Goldman Sachs (NYSE:GS) has mirrored that of BAC. I'm tempted to copy/paste my previous commentary. Mid-January earnings gap. Two-month base. Failed breakout. Back to chop. That sums up the price action. Yesterday's drop and this morning's follow-through carried GS stock back below its 50-day moving average. We're in no man's land here. * 10 Stocks on the Rise Heading Into the Second Quarter Until GS can re-establish itself above $200 -- stay away. For you bears on the prowl, there's a decent short trade if Goldman breaks $189 support. Click to Enlarge Source: ThinkorSwim American Express (AXP)While the weakness in most banks stocks is a sign to steer clear, I'm finding the drop a welcome development in the credit card space. American Express (NYSE:AXP) was flying high -- it was extended, in fact -- and due for a retracement. Yesterday's Fed shenanigans gave traders the excuse needed to ring the register. And now, we have an attractive buy-the-dip opportunity on our hands.This morning's gap into the rising 20-day moving average was swiftly bought up, and AXP stock is forming a strong bullish piercing candlestick pattern.Buy the May $110/$115 bull call spread for around $2.40. The risk is limited to $240, and the reward is limited to $260.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 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post 3 Bank Stocks Whacked Down by the Fed appeared first on InvestorPlace.
Financial stocks and bank sector-related exchange traded funds were among the worst off Wednesday after the Federal Reserve Chairman Jerome Powell downgraded its expectations for U.S. economic growth and ...
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 Federal Reserve will leave rates unchanged but has removed its 'patience' in monetary policy. Yahoo Finance's Brian Cheung breaks it down.
The number of cash machines around the world fell 1% to 3.24 million last year, according to Banking Consultant RBR.Dan Howley, Melody Hahm and Dan Roberts join Seana Smith on ‘The Ticker’ to discuss why cash is on the decline.
Nancy Tengler of Tengler Wealth Management and Craig Callahan of ICON Advisers discuss stocks they're watching now with CNBC's "The Exchange" team.