A look at 4Q17
E*TRADE Financial Corporation (ETFC) reported strong results in 4Q17, beating analysts’ expectations on earnings per share or EPS and reporting $0.64 while Interactive Brokers Group (IBKR) missed analysts’ estimates. Peers (XLF) The Charles Schwab Corporation (SCHW) and TD Ameritrade Holding Corporation (AMTD) reported EPS in the December 2017 quarter equal to analysts’ expectations. E*TRADE saw a substantial rise in total net revenues in 4Q17 on a year-over-year basis. The company generated net interest income of $419 million in 4Q17. In 4Q16, it generated $288 million. However, it witnessed a decline in commissions in 4Q17 compared to 4Q16.
According to E*TRADE, investors should increase their exposure to investments in international markets, which could help generate substantial returns. Moreover, international stocks are expected to witness favorable momentum, mainly because of expected economic growth.
The Charles Schwab Corporation also emphasized maintaining international exposure. The markets are still dealing with President Trump’s decision of levying tariffs, resulting in volatility.
E*TRADE Financial feels that emerging markets are expected to witness strong growth. However, investing in international stocks comes with certain risks—like exchange rate risks, increased transaction costs, as well as liquidity risks.