Vanguard Financials ETF

The total spending on Visa’s (V) network rose 11% to $2.1 trillion in the second quarter—slightly better than analysts’ estimates of $2.09 trillion.

Proprietary trading firms and hedge funds formed 4% of Interactive Brokers Group’s (IBKR) total accounts in the second quarter.

The primary reason for Interactive Brokers Group’s premium valuation is its strong second-quarter results.

In the second quarter, Interactive Brokers Group (IBKR) saw daily average revenue trades (or DARTs) of 797,000.

Interactive Brokers Group (IBKR) posted net revenues of $445 million in the second quarter, a rise of 14.9% on a YoY basis.

TD Ameritrade (AMTD) released its third fiscal quarter results on July 23. The company posted an EPS of $0.89, which exceeded analysts’ expectations.

The top five US banks’ trading revenues rose 10% in the second quarter to over $20 billion—compared to $18.55 billion in the same period last year.

E*TRADE Financial posted second-quarter EPS of $0.95, which beat Wall Street estimates by $0.07.

After second-quarter earnings, Charles Schwab (SCHW) has “strong buy” ratings from seven analysts and a “sell” rating from one analyst.

Technological investments, competitive commission rates, and acquisitions are expected to drive the brokerage industry moving forward.

Asset management and administration fees contributed $814 million, or 32.7%, of Charles Schwab’s (SCHW) net revenues in the second quarter.

As of June 30, Charles Schwab (SCHW) had total client assets of $3.4 trillion, a YoY rise of 12% and a sequential rise of 3%.

Charles Schwab’s (SCHW) second-quarter net revenues came in at $2.5 billion, a YoY rise of 17% and a sequential rise of 4%.

On July 17, Interactive Brokers Group declared its second-quarter earnings. The company’s EPS was $0.39, which missed analysts’ expectations by $0.02.

Charles Schwab (SCHW) reported its second-quarter results on July 17. The company posted an EPS of $0.60, which exceeded analysts’ estimates.

In July, Interactive Brokers had two “strong buy” ratings out of six analysts tracking the stock.

The PE ratio of Interactive Brokers Group (IBKR) is 26.17x on an NTM (next-12-month) basis.

In the second quarter, Interactive Brokers Group (IBKR) is expected to generate fees and commissions income of $195 million.

Interactive Brokers Group (IBKR) saw DARTs of 797,000 in the second quarter, which implies a sequential fall.

In the second quarter, Interactive Brokers Group (IBKR) is expected to report net interest income of $255.1 million.

Interactive Brokers Group (IBKR) is expected to report its Q2 2018 earnings on July 17. It’s expected to have lower commissions.

E*TRADE Financial Corporation (ETFC) is scheduled to release its second-quarter results on July 19. Wall Street is expecting EPS of $0.89, implying year-over-year growth of 27.1%.

In the first quarter, BlackRock managed ~$1.9 trillion in fixed income offerings, up from ~$1.6 trillion in the first quarter of 2017.

BlackRock’s Retail segment manages $638.4 billion in assets, which comprises 10.0% of the company’s total AUM.

In July, Charles Schwab (SCHW) got six “hold” ratings and one “sell” rating of the 20 analysts covering the stock.

Charles Schwab (SCHW) has a PE ratio of 18.99x on an NTM (next-12-month) basis.

In the first quarter, Schwab (SCHW) generated total asset management and administration fees of $851 million.

Moving forward, the markets could see higher volatility, mainly due to prevailing trade tensions that are disrupting global trade.

Charles Schwab’s net interest income is largely influenced by interest-earning assets and interest rates.

On July 17, Charles Schwab (SCHW) is expected to post its second-quarter earnings. Analysts expect it to report EPS of $0.58.

Interactive Brokers Group reported daily average revenue trades of 799,000 in June, a month-over-month rise of 2% and a year-over-year rise of 17%.

Over the long term, trade wars could negatively impact investors’ views on equities, primarily due to the risks they carry.

The primary reason for investors’ preference for safer instruments is highly unstable global factors.

Brokerages could see a negative impact from escalating trade wars between the United States and China in the long term.

The LDR ratio for the largest US banks—JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and U.S. Bancorp—rose in the first quarter.

Big US banks (VFH) have cleared the Fed’s latest stress test. The test measures banks’ ability to withstand an economic crisis.

Charles Schwab (SCHW) is expected to report strong numbers in the second quarter mainly due to supportive macro fundamentals.

On June 11, E*TRADE Financial released results from a study on investor sentiment about the June Fed meeting and the overall economy.

Market participants tend to prefer digital tools to execute trades because of lower costs and faster execution.

We’re almost halfway through the current year, and market dynamics seem to have supported brokerages (VFH).

On June 6, Interactive Brokers (IBKR) attended the Sandler O’Neill Global Exchange and Brokerage Conference, where it shared company insights.

In the second quarter, Interactive Broker Group is expected to witness a drop in its commission revenues sequentially due to a fall in its DARTs.

For TD Ameritrade, six analysts recommend a “hold,” one recommends a “strong sell,” five recommend a “buy,” and seven recommend a “strong buy.”

TD Ameritrade’s (AMTD) PE ratio stood at 16.68x on a next 12-month basis, which implies discounted valuations.

TD Ameritrade’s (AMTD) performance will likely depend on the economic and political factors prevailing in the economy.

TD Ameritrade (AMTD) is expected to report an EPS of $0.8 in the fiscal third quarter, which ends in June.

TD Ameritrade (AMTD) operates in a very competitive industry. The company needs to retain its clients in order to experience long-term growth.

TD Ameritrade (AMTD) benefited from clients’ higher trading activities in the second quarter, which ended on March 31.

Of the six analysts covering Interactive Brokers (IBKR), two recommend “strong buy,” two recommend “hold,” and two recommend “strong sell.”

In the first quarter, Interactive Brokers (IBKR) exceeded analysts’ EPS and revenue expectations, like peers (VFH) Charles Schwab (SCHW) and E*TRADE Financial (ETFC).

Interactive Brokers (IBKR) has an NTM (next-12-month) PE ratio of 32.7x, which is higher than peers’ average of 18.5x.

In the first quarter, trade tensions and interest rate hike expectations made equity markets volatile, resulting in brokerages’ (VFH) customers trading more and boosting brokerages’ revenue.

Interactive Brokers (IBKR) drew market participants’ attention in the first quarter, primarily because of expectations of higher interest rates and strong volatility.

Wells Fargo discovered that employees in its wholesale unit altered information related to customers’ records without the company’s knowledge.

Morgan Stanley reported an EPS of $1.45 in 1Q18—compared to expectations of $1.25. Morgan Stanley’s revenue was $11.1 billion.

JPMorgan Chase (JPM) reported an EPS (earnings per share) of $2.37 in 1Q18—compared to the consensus estimate of $2.28.

BlackRock’s (BLK) Retail segment saw a reversal of fund flows in 1Q17, and it increased throughout the year.

BlackRock (BLK) is targeting economies of scale amid higher technology investments and improved operating efficiencies.

The recent fall in stocks globally is expected to put some pressure on asset managers’ (VFH) operating performances in 1Q18.

Asset managers (VFH) are seeking stability in order to attract funds toward either equity or debt offerings.

Wall Street analysts are expecting a limited upside for asset managers (VFH) as well as broader indexes in 2018.

BlackRock (BLK) stock has risen 27.6% over the past six months and 39.0% over the past year.

March US crude oil (DBO) (UWT) futures contracts increased 1.8% to $65.61 per barrel on January 24, 2018.

Digital assets based on DLT (distributed ledger technology) allows users to initiate and verify their own transactions without any central authority such as banks.

Deutsche Bank is planning to use blockchain technology in currency settlement, trade processing, and derivative contracts.

BlackRock is currently trading at a forward price-to-earnings ratio of 17.6x, compared with the industry average of 18.6x.

Among the major asset managers, BlackRock (BLK) is expected to post sequential and year-over-year growth in earnings per share to $6.38 in 1Q18 and $6.83 in 2Q18.

Analysts gave BlackRock a price target of $614.92 on a next-12-month basis.

BlackRock’s (BLK) board approved a 15.0% increase in quarterly dividends to $2.88 payable in March 2018.

BlackRock managed assets worth ~$1.9 trillion on December 31, 2017, compared with ~$1.6 trillion during the previous year.

BlackRock’s (BLK) Retail division attracted $11.0 billion in new flows in 4Q17, compared to outflows of $2.0 billion in 4Q16.

February WTI crude oil futures contracts rose 0.34% to $64.52 per barrel at 12:05 AM EST on January 16, 2018. It’s the highest level since December 2014.

BlackRock (BLK) continues to attract most of its funds from institutional clients, which form 56% of its total assets under management.

BlackRock’s (BLK) outperformance, estimate beats, and new assets have helped the company command premium valuations.

Asset managers (VFH) have had “buy” to “hold” ratings in recent months since equities are expected to be upbeat in the next few quarters.

Leon Cooperman is optimistic about both the financial sector (XLF) and the technology sector (XLK).

BlackRock commands a premium over industry peers and alternative asset managers due to its strong performance across the regions and offerings.

Translating into pricing BlackRock (BLK) commands a premium valuation in the asset management industry, mainly due to its stable and strong inflow, diversified offerings, global asset allocation, fund growth, and consistent earnings. The company is now trading at a forward PE (price-to-earnings) ratio of 17.9x, compared with the industry average of 14.5x. Overall, BlackRock’s valuation has improved in recent weeks, with […]

Mike Wilson of Morgan Stanley is overweight on the financial and technology sectors. He believes these sectors will benefit the most from tax reform.

Revenue and earnings In this part, we’ll look at Simon Property Group (SPG). Engaged in real estate investment around the world, this retail REIT saw its revenue growth slow from 8% in 2015 to 3% in 2016. Whereas its minimum rent has risen since 2014, its overage rent, tenant reimbursements, and management fees fell in 2016. Simon […]

Warren Buffett’s Berkshire Hathaway (BRK.B) invested heavily in the financial sector (XLF) in 2Q17. The sector represented about 33.0% of the firm’s portfolio in 2Q17.

The financial sector showed a strong performance in the first half of 2017.

The financial sector (XLF) showed a stronger performance in July 2017.

BlackRock (BLK) continues to command a premium valuation on stable and strong inflows, the performance of funds, global asset allocation, and consistent earnings.

Visa has provided a strong return so far this year. On a year-to-date basis, it returned nearly 24.2% as of July 14, 2017.

In 2Q17, Goldman Sachs thinks that the technology sector’s (XLK) earnings growth will be impressive, followed by the financial sector (XLF) (VFH).

On March 31, 2017, BlackRock was managing a record $3.1 trillion—about 56% of the company’s total AUM—in its Institutional Clients division.

So far in June 2017, ten of the 14 analysts covering BlackRock (BLK) have rated the stock as a “strong buy” or “buy.” Four analysts have rated it as “hold.”

BlackRock continues to command a premium valuation among other traditional and alternative asset managers—thanks to its diversified offerings.

Mario Gabelli shared some of his top investment picks in a recent interview.

VanEck  How the fallen angel sector exposure has made a difference The volume of fallen angel bonds in the market is increased primarily by deteriorating fundamentals of individual investment-grade bond issuers and by economic events that have weakened entire industry sectors (as seen in early 2016 in the energy sector with the aftermath of the […]

Goldman Sachs (GS) believes the delay in policy reform might continue in the near future.

BlackRock (BLK) managed ~$2.9 trillion for its institutional clients on December 31, 2016. These assets made up 57% of the company’s total managed assets.

The Fed’s more hawkish tone is one of the major reasons behind the rising expectations for the financial sector.

As of March 2017, 17 out of the 20 analysts covering the stock, or 85%, have rated it as a “buy” or a “strong buy,” and three analysts have rated it as a “hold.”

Through its Advisor Services segment, Charles Schwab (SCHW) is adding clients and assets in the areas of retirement and wealth management solutions.

Trump’s domestic growth-friendly policies Returns have been surging for the financial sector (XLF) (VFH) as the market expects to benefit from the Trump administration’s projected policies. Markets are highly confident with the expectation of more rate hikes, for example, and of widespread deregulation. Banks’ earnings have thus been getting a huge boost, and the market has been […]

Barack Obama signed the Dodd-Frank Act into federal law in 2010.

Bank of New York Mellon’s (BK) Tier 1 Capital ratio was 14.5% compared to 13.6% recorded at the end of its previous quarter.

Charles Schwab (SCHW) is expected to see subdued trades in 4Q16.