Interest Rate Sensitivity: JPMorgan Chase versus Wells Fargo
For Wells Fargo, net interest income makes up 53% of its total income while for JPMorgan Chase (JPM), net interest income makes up 46% of its total income.
Banking
Market Realist has the latest news and updates on banking, U.S. banks, credit unions, and savings and loan associations.
How Does Wells Fargo Compare with JPMorgan Chase on Profitability?
JPMorgan Chase (JPM) and Wells Fargo (WFC) reported profits of $6.2 billion and $5.6 billion, respectively, in the most recent quarter.
Why BAC Is Better Positioned to Gain from a Rate Hike Than JPM
Bank of America (BAC) is better positioned to gain from an interest rate hike than JPMorgan Chase (JPM). It’s more sensitive to interest rate changes.
Microsoft Issued the Most High-Grade Bonds Last Week
Microsoft (MSFT) issued Aaa/AAA rated high-grade bonds worth $19.8 billion through seven parts on August 1, 2016.
What Analysts Have to Say about Iron Ore Prices
Analysts have increased their short-term iron ore price forecasts due to stronger-than-expected temporary factors.
Mortgage Rates Rise with the Bond Market
Lately, mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen over the past month, while mortgage rates have been steady.
How Fallen Angels Could Reward Investors
Fallen angel bonds—high-yield bonds originally issued with investment grade credit ratings—are generally known for offering potential value. A big source of this value has been the tendency of fallen angels to be oversold below what may be considered fair value, leading to a downgrade to high yield. A less obvious source of value for fallen angels […]
PNC Financials’ Non-Interest Income Ratio Continues to Expand
PNC Financial’s non-interest income for 2Q16 increased by 10% over the previous quarter, mainly due to higher fee income growth.
Analysts’ Ratings for Celanese before Its 2Q16 Earnings Release
On July 12, 2016, Celanese’s (CE) consensus 12-month target price was $76.30, indicating a return potential of 11.3% from that day’s closing price of $68.57.
Did Wells Fargo Pass the Fed’s Stress Test?
The Federal Reserve’s stress test results indicate that Wells Fargo (WFC) has sufficient capital to absorb the estimated $25 billion in losses it is projected to incur under the test’s worst-case scenario.
Wells Fargo: What Sets It Apart from Its Peers?
Wells Fargo (WFC) is the largest mortgage lender in the US, operating primarily as a retail and commercial bank. It is been the most profitable bank in its peer group, posting a return of 10% on shareholder’s equity and ~1.3% on assets in 2015.
Wells Fargo Benefits from a Solid Business Model
Wells Fargo (WFC) has been considered the strongest and most steady among the “too big to fail” banks in the United States for years.
Comparing Wells Fargo and Bank of America’s Profitability
In 1Q16, Wells Fargo’s revenue grew 4% to $22.2 billion. Bank of America’s (BAC) revenue fell 7% YoY (year-over-year) to $19.5 billion.
How Sensitive to Interest Rates Has Bank of America Really Become?
Bank of America’s (BAC) earnings are extremely sensitive to interest rate changes. Low interest rates have weighed on the bank’s top line.
What Is Disney’s Core Strategy for Its US Theme Parks Business?
The Walt Disney Company’s (DIS) theme parks and resorts business is doing extremely well in the United States.
Why Is JPMorgan Chase Positive on Gold?
After seeing three straight years of losses, gold (GLD) performed extremely well at the beginning of 2016.
Fundamental Market Demand Rose for 4-Week Treasury Bills Auction
The US Department of the Treasury conducted the weekly auction of four-week Treasury bills (or T-bills) on April 26.
How Strong Is China’s Gold Demand?
China’s love for gold is world famous, and demand had touched its peak in 2013 when gold experienced a steep price fall.
Indirect Bidders Participated in the 13-Week T-Bills Auction
The U.S. Department of the Treasury auctioned 13-week T-bills worth $28 billion on April 11. The offer amount of these bills was the same as the previous auction.
How Was Market Demand for the 13-Week Treasury Bill Auction?
The U.S. Department of the Treasury conducted the weekly auction of 13-week Treasury bills on February 16, 2016. The total issuance was worth $37 billion.
Should You Look to European Stocks for Growth?
European stocks began the year with a lot of hope pinned on them for providing capital appreciation in the year.
Bid-to-Cover Ratio Fell for 26-Week Treasury Bill Auction
The U.S. Department of the Treasury held the weekly 26-week Treasury bill auction on February 16, 2016. T-bills totaling $30 billion were on offer.Company & Industry Overviews AEPGX’s Low Volatility and Low Returns: What Does This Mean?
The American Funds EuroPacific Growth Fund (AEPGX) has been in existence since April 1984.
Why General Electric Is Focusing on Industrials?
Originally incorporated in 1892, General Electric is one of the largest and most diversified industrials and financial services corporations in the world.
A Look at the Role of the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau was established to protect consumers’ interests by implementing federal consumer financial laws.
Hulu: Its Strategic Significance for Disney
Disney expects the equity loss from its investment in Hulu to accelerate since Hulu is increasing its investment in acquiring original content from media companies and producing original programming.
High-Yield Bonds and You in 2016
High-yield bonds, also known as Junk bonds, have an iffy repayment ability, even if they are at the higher end of the junk rating scale.
Macroeconomic Factors Affecting Investment-Grade Bond Yields
Investment-grade bond yields rose 8 basis points month-over-month and ended at 3.5% on November 30 due to high expectations of an interest rate hike in the December policy meeting.
A Detailed Holdings Analysis of PLVVX
PLVVX holds fixed income securities in both long and short positions. The fund also holds derivative forward, future, and swap agreements on government securities, indexes, and currencies.
How Does the Greek Debt Crisis Impact the Eurozone?
Greece’s debt was around 250 billion euros. It’s nearly 175% of its 2013 GDP figures. The GDP could fall more in 2016. The debt crisis started in 2010.
Analyzing the European Union’s GDP Composition
The EU’s (European Union) GDP (gross domestic product) depends on the service sector. The service sector contributes ~73.90% towards the EU’s (EZU) GDP.
Dollar Index and Services PMI Both Fell
The US Dollar Index measures the strength of the US dollar against other major currencies. It fell by 0.58% on December 18, 2015. It was on a correction mode.
What Is the Dodd-Frank Act?
Analysts who favor the Dodd-Frank Act believe it will protect the investing community and consumers. Critics believe it will hamper economic growth and hurt competitiveness.
US Banks Played a Pivotal Role in the 2008 Financial Crisis
During the period between September 2008 and March 2009, US stock markets plunged, and the financial sector fell 60% in value.
What Is the Dodd-Frank Act?
The Dodd-Frank Act is a financial reform legislation passed in an attempt to prevent events similar to the 2009 financial crisis from occurring again.
Understanding the Fed’s Financial Regulations Post-2008 Crisis
Since the financial crisis, the Fed has enforced regulations for the capital strength and liquidity of 16 systematically important financial institutions.
Why Preferred Stocks Are Less Volatile than Common Equities
Preferred stocks are less volatile compared to common equities. This is mainly because a larger portion of the returns comes from dividends, which tend to be stable.
Understanding Deutsche Bank’s Segments
Deutsche Bank operates under five segments. Corporate Banking & Securities contributes 50% to Deutsche Bank’s revenues.
Analyzing US and European Banks’ Leverage Ratios
On average, European banks have higher leverage than US banks. An excess buildup of leverage increases a bank’s exposure to the risk of bankruptcy.
Oracle Made another Marketing Cloud Acquisition: Maxymiser
On August 20, 2015, Oracle (ORCL) announced the acquisition of Maxymiser. The financial details of the deal weren’t disclosed.
Goldman Sachs’ Revenue Model
Goldman Sachs engages in asset management, investment banking, wealth management, institutional sales, and trading activities across asset classes as well as regions.
Goldman Sachs’ Institutional Client Services Posts Highest Profit
Goldman Sachs’ major services in the division include offerings related to interest rate products, credit products, mortgages, currencies, and commodities.
Morgan Stanley’s Careful Attention to Compensation Expenses
Morgan Stanley divides its non-interest expenses into compensation and non-compensation. It’s compensation expenses (and benefits) are ~80% of this class.
G10 Currencies Gain as US Dollar Index Sinks
The G10 currencies were impacted positively as the US dollar index dropped in value in the two weeks ending August 21, 2015.
Analyzing Discover Financial’s business segments
Discover Financial Services (DFS) has two operating segments: Direct Banking and Payment Services. Payment Services is comparatively small.
What Happens When You Swipe a Visa Card?
Visa’s open-loop payments network connects and manages the exchange of information between issuers and acquirers.
Loan-to-Deposit Ratio Moves in the Right Direction for Banks
The ideal loan-to-deposit ratio for a bank depends on the bank’s business model. Some banks that focus on core banking, like U.S. Bancorp (USB), have high loan-to-deposit ratios.
Mortgage Refinances Are Hit by Prepayment Burnout
Refinancing activity affects prepayment speeds. Prepayment speeds occur because homeowners are allowed to pay off their mortgages early and without penalty.
ETFs That Outperform in Late Stage, Recession, and Trough
Certain industries typically outperform at various phases of business cycles. This provides important clues to investors and helps them manage their portfolios.
How J.P. Morgan Ranks in Corporate and Investment Banking
In the US, J.P. Morgan competes with Bank of America (BAC), Goldman Sachs (GS), and Morgan Stanley (MS), the leading players in investment banking.