Oracle Was the S&P 500’s Top Loser on June 22
Oracle rose on June 22 due to the earnings report. The better-than-expected earnings report for fiscal 4Q17 boosted Oracle’s stock prices.
After falling for two consecutive trading days, the S&P 500 was mixed on June 22 and ended the day almost flat.
After testing and closing below the important level of 12,800, Germany’s DAX Index pulled back on June 23. German manufacturing PMI data didn’t support DAX.
What Analysts’ Ratings Suggest about Schwab’s Performance in 2017
As of March 2017, 17 out of the 20 analysts covering the stock, or 85%, have rated it as a “buy” or a “strong buy,” and three analysts have rated it as a “hold.”
Charles Schwab has seen consistent improvement in operating margins, backed by higher interest revenue, higher asset management revenue, new assets, and a rise in the broader market.
Charles Schwab’s (SCHW) stock has risen 8.8% in the past three months and 56.4% in the past year, backed by an expected strong performance in 2017.
KeyCorp’s Valuation Is Close to Industry Average
KeyCorp’s valuation looks slightly overvalued compared to KBE. However, it’s undervalued compared to KRE, the regional banking ETF.
KeyCorp is a large regional bank with about $94 billion in assets. It competes with JP Morgan (JPM) and Bank of America (BAC) in various service segments.
KeyCorp (KEY) is represented in key ETFs focused on the banking sector. The SPDR S&P Bank ETF (KBE) has KeyCorp comprising ~1.7% of its portfolio.
How Analysts Are Rating Banking Stocks amid Volatile Trading
In June 2017, 16 of the 29 analysts covering JPMorgan Chase (JPM) rated the stock as a “buy” or “strong buy” as compared to 17 analysts in March 2017 and 15 analysts in April 2017.
In 2Q17, JPM is expected to rise 3.9% on a year-over-year basis, reflecting lower growth due to a marginal rise in broad markets (SPX-INDEX) (SPY), lower trading activity, and lower credit offtake.
In recent quarters, JPMorgan Chase (JPM) has returned 70%–75% of its net profits to shareholders in the form of dividends and repurchases.
Positive Ratings Will Likely Continue for American Express
Of the 31 analysts currently analyzing American Express (AXP) stock, ten have given it a “buy” rating, and one has given it a “strong buy.”
American Express (AXP) has been using its strong balance sheet position to consistently declare dividends to its shareholders.
Analysts have given American Express (or Amex) (AXP) a price target of $84.08, a 4.3% rise from its current level.
Why PNC Financial Has Been Pricing at a Premium
PNC Financial (PNC) successfully diversified its banking operations by extending offerings in asset management, consumer services, and investment banking.
In 1Q15, PNC Financial bought back 4.4 million common shares worth $0.4 billion. The purchase was part of its four-quarter repurchase program.
PNC Financial’s non-interest income declined by 10% compared to the previous quarter—mainly due to higher fourth quarter gains on asset dispositions.
CME Returned $1.6 Billion in 2015: What About Dividends?
CME Group (CME) has returned more than $5.6 billion to shareholders in the form of dividends since the variable dividend policy in 2012. In 2015, CME declared dividends of $1.6 billion.
CME Group (CME) recorded average daily volumes of 18.2 million in January 2016. This compares to average daily volumes of 13.2 million in 4Q15.
CME Group’s (CME) operations outside the United States are expanding at a good pace. Volumes are impressive as CME leverages investments in global headcount, partnerships, and product development.
Why LSE Stock Has Outperformed over the Years
The London Stock Exchange’s high market share in growth areas such as client clearing, along with its good asset quality, suggest that the stock exchange is on solid ground.
Visa (V) boasts a significant advantage in terms of its worldwide acceptance. This availability lent to the network effect’s being the source of the company’s moat.
Just as early snowmelt or increased rainfall in the Rocky Mountains will swell the Colorado River come springtime, so too do Upstream announcements eventually lead to increased opportunities for midstream companies.
AIG’s Analyst Ratings Suggest a 10% Upside in Fiscal 2017
In June 2017, 13 of the 19 analysts covering AIG rated AIG as a “buy” or a “strong buy.” Five analysts rated it as a “hold,” and one analyst gave it an “underperform” rating.
AIG’s total operating expenses in 1Q17 fell 18.6% to $2.4 billion, or 10% on a constant dollar basis. This decrease was mostly due to lower acquisition costs, benefit expenses, and other general expenses.
AIG posted a net profit of ~$1.2 billion, or $1.21 per share, compared to a loss of $183 million, or $0.16 per share, in 1Q16.
Comparing Growth and Value Stock Sectors
The SPDR S&P 500 Growth ETF (SPYG) has generated a YTD return of 13.3% versus 4.3% from the SPDR S&P 500 Value ETF (SPYV).
If we compare the performances of the defensive sectors, we can see that their YTD performance and one-year performances have been reasonably uniform with the exception of the energy and telecom sectors.
The S&P 500 (SPY) defensive sectors tend to offer an attractive yield to investors during low-interest environments or when the economy is slowing down.
FOMC Statement: Gauging the Bond Market Reaction
Bonds and currencies are usually among the first to react to any Fed news, but this time the reaction has been muted.
The FOMC has stuck to the script written by markets (SPY) and left interest rates unchanged at its May meeting.
In 2016, Goldman Sachs stock rose 35% and outperformed the financial sector.