Bank Of America Corp.

We’ve seen the 2Q15 performance of Ford’s (F) automotive operations. Now, we’ll look at how Ford Credit contributed to Ford’s 2Q15 profits.

Since the financial crisis of 2009, there has been intense pressure on US banks to raise capital levels to meet minimum requirements.

To make the most of growing consumer spending, major banks focused on their consumer banking business. They’re lending out more consumer loans.

For Apple, as Buffett noted during last year’s shareholder meeting, there aren’t a lot of acquisition opportunities that fit into its scale.

PayPal (PYPL) could have bright prospects despite the competitive threat it faces from Square and Apple in the online payment market, according to equity research firm BTIG.

Morgan Stanley charges fixed fees and performance fees for asset management services, products and services, and administration of accounts.

On March 26, the U.S. Fed released bank stress test results indicating which banks can increase dividend payouts and share buybacks.

Wall Street analysts expect Goldman Sachs to post return on equity (or ROE) of 11.5% in 3Q15. In 3Q14, ROE for Goldman Sachs was 11.8%.

Major banking stocks rose after the Fed approved huge payout plans. Wells Fargo (WFC) rose 2.7% and Citigroup (C) rose 2.8%.

Goldman Sachs has been cutting costs in recent quarters. In 2016, 2,600 people may have lost their jobs at GS—the highest number since the financial crisis.

Potential new developments from the Fed include a suggestion by the subcommittee on communications that median values of policymakers’ projections be published.

This week, five of the top six commercial and investment banks will report their quarterly earnings.

JPMorgan’s revenues from fixed income markets declined 10% year-over-year in the second quarter of 2015. The drop excludes the impacts of one-off items.

Two key elements gripping the US banking sector and Wells Fargo include the near-zero interest rate and global uncertainty, which have dampened earnings.

The Federal Deposit Insurance Corporation’s quarterly report on the health of the US banking industry said that 4Q15 bank earnings rose 11.9% year-over-year.

At Wells Fargo’s investor day presentation, chief financial officer John Shrewsberry warned investors of more losses on energy-related loans.

Citigroup’s CEO, Michael Corbat, continued his efforts to try to slim down the company’s operations and clean up its balance sheet in the second quarter.

Bank of America (BAC) is currently trading at $25.26. Its 52-week high is $25.80 and 52-week low is $12.05.

In the past few quarters, JPMorgan has posted better-than-expected earnings and has topped revenue estimates.

With classic safe havens providing little protection, turn to financials and healthcare sectors for opportunities. Healthcare stocks usually hold up well in the run-up to a rate hike.

Wells Fargo has consistently performed well in stress tests. This performance has let the company increase its dividends annually.

Wells Fargo’s first quarter earnings surpassed expectations but fell 5% YoY (year-over-year). The net interest income increased by 6% to $11.7 billion.

Operating margins In 3Q17, Bank of America’s (BAC) non-interest expenses fell sequentially and YoY (year-over-year), reflecting strong operating efficiency. This fall was partially offset by continued investments in technology. The bank’s expenses fell to $13.1 billion in 3Q17, compared with $13.5 billion in 3Q16 and $13.7 billion in 2Q17. Commercial banks (XLF) are focusing on reducing operating spending, targeting huge investments in technology […]

Monetary policy normalization refers to two aspects: the federal funds rate and the Federal Reserve’s balance sheet.

Citigroup’s 2Q15 efficiency ratio was 56% and was 66% in 3Q14. The bank has focused on efficiency through cost controls and exiting low-return segments that led to a lower efficiency ratio.

In spite of a rather weak performance, Wells Fargo (WFC) commands the highest premium due to its strong franchise, mortgage concentration, and high net interest margins.

The bank has always focused on its bread and butter revenue-earning stream: loans. Over the years, Wells Fargo slowly realized its goal of achieving a strong market share in lending.

In June, the Federal Reserve approved Wells Fargo’s (WFC) capital plans after it found that the bank could keep lending in a severe economic downturn.

Bank of America boosted its dividends by 50% to $0.075 after it cleared the Fed’s 2016 stress tests.

The 13F filings of major institutional asset managers for the second quarter of 2015 offer a gloomy picture for Brazil.

The Fed is targeting one last rate hike in December 2017 to bring the federal funds rate from 1.25% to 1.50%.

In March, the Fed issued a conditional non-objection to Bank of America’s capital plan. It must resubmit its plan and address certain weaknesses.

Bank of America (BAC) has put in place a strong expense control mechanism that has resulted in lower growth in operating expenses compared to revenues.

On April 13, JPMorgan Chase reported 1Q16 earnings of $1.35 per share. It beat consensus estimates of $1.28. Its shares rallied 4.2% after the earnings beat.

Appaloosa Management’s top new buy last quarter was American Airlines Group (AAL), with a 2.22% position in the hedge fund’s U.S. long portfolio.

Changes in technology have reshaped the banking sector. Banks are increasingly collaborating with fintech firms to improve their customer service.

The Financial Select Sector SPDR ETF (XLF) attracts the most attention among financial ETFs in the US. 87% of the fund is composed of large-cap stocks.

Maintaining a high net interest margin has always been part of Wells Fargo’s (WFC) strategy. Wells Fargo has consistently been better than the industry’s average net interest margin.

On Monday, Bank of America analyst Ronald Epstein lowered his target price on Boeing stock by $10 to $360. However, he maintained his “neutral” rating.

BlackRock is not upbeat about fixed income in 2016. It’s more optimistic about stocks than it is about bonds, specifically European and Japanese equities.

AMFQX is an alternative mutual fund that seeks to generate positive absolute returns with a low correlation to the returns of broad stock and bond markets.

Paul Singer, the CEO of Elliott Management, increased his holdings in NXP Semiconductor (NXPI) in 3Q17, according to a recent 13F filing report.

Wells Fargo’s (WFC) broad operation level strategy over the long run can be described by two words—slow and steady. It doesn’t take many risks. It’s stable and boring.

The PIMCO RAE Low Volatility Plus Emerging Fund Class A (PLVVX) is an alternative mutual fund that mimics the long/short strategy to construct a portfolio with low volatility and high-income securities.

Berkowitz believes that Fannie Mae and Freddie Mac entities are highly valuable and expects them to generate earnings of at least~$21 billion a year.

This series analyzes investors’ sentiments toward the financial sector in the major global regions: the United States, Europe, China, Japan, and the Emerging Market economies.

JPMorgan Chase (JPM) is scheduled to announce its fourth-quarter financial results on January 15.

Bond underwriting exposure could be risky for investment banking departments, as interest rates begin to rise and refinancing slows.

The longer term outlook for Eurozone banks does look more positive than a year ago given reasons including the substantial deleveraging, capital raising by local banks and the European Central Bank (or ECB)’s recently announced ABS purchase program.

Druckenmiller has sold the firm’s position in Barrick Gold, which shows that he might have a strong outlook on the equity market.

Wells Fargo continues to remain a sector leader in raising low-cost deposits. It grew its noninterest deposits by nearly 7.0% compared to 4Q14.

Management sets the vision for an organization. Wells Fargo’s vision is large, but it’s already halfway there. Wells Fargo is the largest bank in the U.S.—by market capitalization.

The financial sector has had a strong performance so far in September 2017. The Financial Select Sector SPDR Fund (XLF), which tracks the performance of the financial sector, rose nearly 4.4% on a month-to-date basis.

In this series, we’ll compare Bank of America and J.P. Morgan on the basis of their 2Q earnings, profitability, cost-cutting initiatives, and interest rate sensitivities.

As a result of its active customer base, PayPal reported that its total payment volume for 2Q17 rose 23% year-over-year to $106.4 billion.

Investment-grade bond yields usually follow cues from the Treasuries market. With a fall in Treasury yields, investment-grade corporate bond yields also fell.

IBM (IBM) has built a blockchain platform that provides real-time tracking of the food supply chain.

Cybersecurity firm FireEye saw the value of its shares rise 14.5% last week after investment bank Goldman Sachs upgraded the stock to a “buy.”

Morgan Stanley (MS) is trading at a forward PE ratio of 9.6x, which is ~16% lower than its five-year average PE ratio.

D.E. Shaw upped its position in Liberty Global PLC (LBTYK) that accounted for 0.76% of the company’s U.S. long portfolio in 4Q13.

Wells Fargo (WFC) seems secure when it comes to risks arising from energy-related loans. Wells Fargo’s energy loan portfolio of $17.8 billion made up 1.7% of the total loan portfolio in 1Q16.

Financial stocks have been rising after a better-than-expected 2Q16. Despite this, Citigroup has downgraded JPMorgan Chase to a “neutral” from a “buy.”

Investors need to keep a close watch on signs that indicate a “liftoff” in December and should be ready to rebalance their equity mutual funds accordingly.

An example of macroprudential tools are bank stress tests, conducted regularly by the U.S. Federal Reserve.

In the third quarter, banks that relied heavily on interest-based income suffered, reporting record-low net interest margins.

If a bank is able to keep its cost of deposits low, it will have a competitive advantage. Wells Fargo has the lowest cost of deposits among its peers—despite having a very high deposit base.

In terms of profitability, Citigroup’s return on equity (ROE) fell to 8.0% from 9.1% in the previous quarter but rose sharply from the 5.3% reported in 3Q14. Return on assets fell to 0.9% from 1.1% in 2Q15.

Under the current uncertain economic circumstances, investors searching for higher yield might turn to fixed income.

On February 19, the Financial Select Sector SPDR ETF (XLF) closed at $20.98. This is 10% and 6% below its 100-day and 50-day moving averages, respectively.

Goldman Sachs ranked first in worldwide announced and completed mergers and acquisitions so far in 2015.

Wells Fargo wants to maintain a balance between its interest income from loans and non-interest income. Non-interest income accounts for nearly 49% of Wells Fargo’s revenues.

Wells Fargo’s (WFC) first, and possibly the most important, operational strategy is focusing on cross-selling. It’s the most important pillar of its operational strategy.

All banks face risks. Two key areas to understand are banks’ market risk and reputational risk. Here’s a summary of each type.

The three US stock indexes that we review in this weekly series rose from July 5–12, 2016. Robust US jobs data boosted investor sentiment and eased the fear of an economic slowdown.

REITs are the most overvalued sector in XLF on a price-to-book multiple basis. On average, REITs traded at a price-to-book multiple of 3.57x as of Monday, July 6.

The industrial sector accounts for about 12.5% of total US GDP. It’s also a main source of demand for goods and services in other sectors of the economy.

Citigroup (C) reported mixed fourth-quarter results on January 14. However, the stock is trending higher.

Online banking is the cheapest mode for servicing the customer in the long run. Online banking involves a one-time fixed cost. After that, the maintenance cost is very low.

Wells Fargo (WFC) believes that people are a competitive advantage source. Integrating sound human resource practices lies at the core of Wells Fargo’s strategy.

Today, Sun Trust Banks and BB&T announced a merger that would create the sixth largest bank in the United States.

U.S. Bank does well in increasing its low-cost deposit base. In 4Q14, money market deposits grew the fastest at 19.7%—compared to 4Q13.

A few days back, BMO Capital Markets analyst Tim Long downgraded the rating on Western Digital (WDC) stock to “market perform” from “outperform.”

Since Donald Trump’s presidential victory, Wall Street analysts have raised their forecasts for the major banks’ (XLF) net interest margins as they anticipate rising interest rates and economic growth.

Bank of America (NYSE:BAC) stock fell 3.1% in pre-market trading today after the company reported its second-quarter results.

Global banking’s key drivers Commercial banks (XLF) will likely see subdued credit offtake in the United States due to interest rate hikes and tax rate cuts allowing for higher operating cash flow. However, economies are buoyant, and interest rates are still lower outside the United States. Banks with global exposure could target higher consumer and commercial loans. Bank […]

Wells Fargo is following strict underwriting guidelines in an effort to reduce its historical provisions. It’s expected to follow this strategy into 2018.

The manufacturing PMI (purchasing managers’ index) for March released on April 1, 2015. It decreased to 51.5% from February’s reading of 52.9%.

J.P. Morgan (JPM) advises corporates on fundraising, strategic transactions across countries, and trading activities under its corporate and investment banking division.

The three US equity stock indexes we review in this weekly series were mostly flat from August 11–18, 2016. This came after the minutes from the July 26–27 FOMC meeting.

Citigroup (C) has consistently enhanced payouts for shareholders in recent quarters as its operating performance improves.

BAC was managing ~$2.59 trillion on March 31, 2017, in client balances, which represents a growth of 5% on a YoY basis.

Wells Fargo (WFC) has the largest loan portfolio in the financial sector (XLF), anchored by its mortgage portfolio.

Commercial bankers (XLF) in the United States have benefited from rising net interest margins due to rising rates over the past year and a half.

Revenues from Deutsche Bank’s Corporate and Investment banking unit fell by 12% in 2Q16. Revenues from its Global Markets business fell by 28%.

Citigroup and Bank of America have recovered well from the financial crisis. They have generated steady profits in the last few years and have strengthened their capital.