SPDR® S&P Regional Banking ETF

When financial intermediaries allocate funds, they assess the risks and returns that come from various risky claims. Intermediaries help allocate resources and risks throughout the economy. Financial intermediation can result in concentrated risks. The risks increase the financial system’s fragile state. These risks are called systemic risks.

Historically, a flatter yield curve had an adverse impact on the financial institutions’ returns. It lowered their net interest margins. The Fed continues to stress an accommodative monetary policy. The policy and strong overseas demand have kept yields low at the long end of the curve. As a result, the difference between 30-year and five-year Treasury yields fell to 154 basis points on September 5, 2014.

Russ explains the good news behind his upgrade of the global financial sector as well as the bad news keeping his sector outlook somewhat subdued.

Fifth Third Bancorp has an impressive free cash flow position.

Revenue and earnings In this part, we’ll look at Welltower (HCN), a US healthcare REIT. Welltower’s revenue growth slowed from 15% in 2015 to 11% in 2016. The growth was driven by all of its segments, through rental income, resident fees and services, interest income, and other income. Its operating costs and other expenses (including interest expenses) […]

As per the latest JOLTS report, about 3.2 million Americans quit their jobs voluntarily last month. This is an increase of 0.1 million from the previous month.

While the Dodd-Frank Act was passed to avoid another financial crisis, it has crippled banks’ profitabilities over the years due to higher capital requirements.

Another factor that impacts small-cap stocks’ performance is the yield curve. The yield curve has remained on the flatter side since the recession.

The dismantling of Dodd-Frank regulations for banks should improve their profitabilities, which explains why their stocks have soared since Trump’s win.

While I don’t have a crystal ball, here are three things I believe all investors need to know about returns in 2016.

The yield curve has steepened a bit compared to where it was a week or even a month ago. Investors should consider the yield curve slope an indicator of bank performance.

Banks benefit from a steeper yield curve, which allows banks to lend on higher long-term rates and borrow on lower short-term rates. This boosts banks’ margins.

Deposits are the cheapest funding source. Since deposits fund a major chunk of BB&T’s assets, the overall funding costs are low.

SunTrust Bank’s net interest income in 2014 remained stable compared to 2013 as strong loan growth offset the decline in net interest margin.

BB&T Corporation (BBT) is a financial holding company. It conducts its operations primarily through its bank subsidiary—Branch Bank.