Banks Make It through the Fed’s Stress Test
Despite and a rocky 3-month period, starting in late February/early March, the financial sector has really taken a positive outlook over the past ~month and some signs point to a continuation of this recent success.
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.
The US dollar hovered at high price levels in the early hours on December 12. At 5:00 AM EST, the US Dollar Index was trading at 101.44.
The US Dollar Index fell in the early hours on November 28. The stronger economic data improved the chances of an interest rate hike in December.
Deutsche Bank’s (DB) shares are currently trading at distressed valuations. The bank’s shares are trading at the steepest discount to its book value, worse than the 2008 financial crisis.
Deutsche Bank’s shares are currently trading at distressed valuations.
Investors worried about Deutsche Bank’s bankruptcy are now looking at CEO John Cryan’s plan to restructure the company’s operations to get it back into profitability.
Germany-based Deutsche Bank (DB) announced plans to cut dividend payments for 2015 and 2016 as part of its plans to strengthen the bank’s capital.
Deutsche Bank is proving to be the most dangerous bank to the global economy after it failed the Federal Reserve’s 2016 stress tests in June.
Deutsche Bank’s cost-cutting measures had some positive impact on the company in the third quarter, but it still has a long way to go.
Deutsche Bank’s (DB) profits of 278 million euros for the third quarter were a big surprise for investors who were expecting the bank to report losses.
Deutsche Bank (DB) surprised markets with better-than-expected earnings on October 27.
In a Bloomberg survey of 32 analysts, 17 analysts have assigned a “buy rating to Morgan Stanley, while 14 have rated it as “hold.”
Morgan Stanley is currently trading at a PBV of 0.85x, which implies a discount of ~15% to its book value.
Since the financial crisis of 2009, there has been intense pressure on US banks like Morgan Stanley to raise capital levels to meet minimum requirements.
Morgan Stanley (MS) raised its dividends by 33% to $0.20 after it received conditional approval following the Fed’s 2016 stress tests in June.
Morgan Stanley has a cost-cutting program, Project Streamline, that will reduce $1 billion in costs by 2017—assuming no growth in revenues.
Morgan Stanley’s (MS) 3Q16 earnings beat analysts’ estimates and reported a major improvement in its fixed income and commodities (FICC) trading business.