Financial Select Sector SPDR® ETF
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An Investor’s Guide to Top-Performing Stocks for 2020
Overall, tech stocks turned out to be the top performers for 2019. The gain in the technology sector helped the S&P 500 gain 29% in 2019.
Ray Dalio, the Role of Credit, and the Economic Machine
Credit is the most important part of the economy, leading to increased spending, increased income levels, higher GDP, and faster productivity growth.
Dow Jones: November Was Its Best Month since June
This week, the Dow Jones Industrial Average Index (DJI) rose 1%. On a month-to-date basis, it has risen 3.8% and heading for the biggest gain since June.
Dimensional Fund Advisors’ Major Holdings in Q3
Dimensional Fund Advisors’ top buys are Apple (AAPL), AT&T (T), Microsoft (MSFT), L3Harris Technologies (LHX), and Verizon Communications (VZ).
Dow Jones Index: “Tariff Man” Trump is Back
On November 8, the Dow Jones closed at the 27,681.24 level, just 0.3% below its all-time high. US-China trade deal optimism raised equity markets.
Understanding Banks’ Market and Reputational Risks
All banks face risks. Two key areas to understand are banks’ market risk and reputational risk. Here’s a summary of each type.
Must-Know: Credit and Liquidity Risks in Banking
The top risks that every bank faces are credit risk and liquidity risk. We’ll look at the banks that managed this risk safely, and those that didn’t.
Understanding a Bank’s Operational and Business Risks
Banks experience operational risk in all daily bank activities, such as a check incorrectly cleared or a wrong order punched into a trading terminal.
Cramer and Trump Were Right about the Market Rebound!
On August 27, Jim Cramer predicted that the equity market could witness a rebound in September. President Trump said that the US economy is in great shape.
Alan Greenspan: Why Is Trump Dead Wrong?
On Wednesday, Alan Greenspan told CNBC, “Overall, the economy seems to be sagging.” According to President Trump, the economy is in great shape.
Bill Ackman: Top Bets amid Recession Fears
Bill Ackman, CEO of Pershing Square Capital Management, is well known in the hedge fund industry for his various investment strategies.
BAML Expectations: 2020 Will Be Difficult for Investors
BAML’s David Hauner said that 2020 will be a very difficult year for investors. The last recession came after two years of yield curve inversion.
Will Cyclical Stocks Rally in September?
In August, cyclical sectors such as energy, financials, and industrials have fallen the most amid recession fears in the market.
Trump: US Economy ‘Poised for Big Growth after Trade Deals’
According to President Trump, the US economy is “poised for big growth after trade deals are completed.” Markets are volatile amid the trade war.
How Do You Play the Market with a Recession Looming?
The yield curve inverted yesterday, driving markets down. The DJIA fell 800 points yesterday—its worst performance in 2019—on fears of a looming recession.
What Caused Yields to Plunge and What Does It Mean?
Tuesday’s stock market respite was short-lived. The S&P 500 Index fell 2.1% today after the yield curve inverted, an indicator of an impending recession.
Morgan Stanley: The Fed May Be Left with One Option
Morgan Stanley expects the Fed will gradually move back to the zero interest rate policy it had between 2009 and late 2015.
Energy Subsectors: Analyzing the Downside
Last week, the Energy Select Sector SPDR ETF (XLE) fell 3%. XLE had the largest decline among the sector-specific SPDR ETFs under review.
Can Stock Market Bears Smell Recessions Better?
In developed economies like the US, the stock market and the real economy are closely linked.
Berkshire Hathaway’s Banking Holdings in Q1
Among Berkshire Hathaway’s financial holdings, JPMorgan Chase was the worst performer, while Goldman Sachs was the top performer.
Why Buffett’s Next Elephant Could Actually Be a Dragon
In his annual shareholder letter, Buffett lamented the lack of big acquisition opportunities.
Soros Fund Management’s Top Buys in the Fourth Quarter
George Soros added 2.026 million shares of the SPDR Select Sector Fund (XLF) to its portfolio during the fourth quarter, giving it a weight of 1.5% in the portfolio.
Citigroup Stock: Analyzing the Uptrend
As of February 14, Citigroup stock has risen 19.9% in 2019. Citigroup has outperformed the top US banks with its returns.
Buffett’s Love for Banking Stocks Continued in Q4
Berkshire Hathaway is the largest shareholder in Wells Fargo (WFC), Bank of America (BAC), U.S. Bancorp (USB), and American Express (AXP).
Bank of America Stock: Analyzing the Uptrend
Bank of America (BAC) has impressed investors with its financial performance. We expect Bank of America to sustain the momentum in 2019.
Markets Give a Thumbs Up to ‘True Merger of Equals’
Today, Sun Trust Banks and BB&T announced a merger that would create the sixth largest bank in the United States.
How Buffett’s Top Ten Holdings Fared in Q4
Apple (AAPL), which was Buffett’s top holding at the end of the third quarter, saw a selling spree in the fourth quarter.
Banks Could Outperform Broader Markets in 2019
Bank of America (BAC) and Goldman Sachs (GS) outperformed analysts’ estimates, which drove their stocks higher.
Bank of America’s Strong Q4 EPS Growth
Bank of America posted an EPS of $0.70 during the fourth quarter, which beat analysts’ estimate of $0.63 and rose 49% on a YoY basis.
BAC Stock Closed 7.2% Higher after Strong Q4 Results
On January 16, Bank of America announced stellar fourth-quarter results. The bank had lower costs, which supported the bottom-line growth.
JPMorgan Chase’s Q4 Miss Could Impact Its Stock
On January 15, JPMorgan Chase (JPM) reported weaker-than-expected fourth-quarter results. The revenues rose ~4% on a YoY basis.
Why Citigroup Missed Q4 Sales Estimates
Citigroup’s (C) total revenues of $17.1 billion fell short of analysts’ estimate of $17.6 billion.
Bank of America Expects the Markets to Fall in 2019
Bank of America’s equity and quantitative strategist, Savita Subramanian, expects a decline in the S&P 500 (SPY) in 2019—compared to 2018.
JPMorgan Chase Could Beat the Fourth-Quarter Estimates
JPMorgan Chase (JPM) is scheduled to announce its fourth-quarter financial results on January 15.
Will Citigroup’s Operating Efficiency Continue to Improve?
During the last reported quarter, Citigroup’s efficiency ratio was 56.1%—down from 56.6% in the same quarter the previous year.
Why Investors May Want to Consider FLTR
Floating rate notes (or FRNs) act as cushions during periods of rising interest rates.
The Dow Had Its Second-Best Day of the Year Yesterday
The Dow Jones Industrial Average surged 617.70 points on November 28, its second-biggest gain this year after the March 26 rally of 669.40 points.
Bank of America’s Suggestions for Investors in a Market Decline
In a note published last week, Bank of America Merrill Lynch equity and quantitative strategist Savita Subramanian said, “We believe the peak in equities is likely before the end of 2019.”
BAC’s Balance Sheet Expanded with Strong Credit Quality
Bank of America’s (BAC) total assets grew ~2.4% year-over-year in the third quarter and reached ~$2.34 trillion.
Bank of America’s Operating Efficiency Improved in Q3
Bank of America reported third-quarter non-interest expenses of $13.1 billion.
What Drove Bank of America’s Q3 Profits to Jump 37% YoY?
Bank of America posted Q3 EPS of $0.67 on October 15, beating the estimate of $0.62 and marking ten straight quarters of earnings beats.
Where Does Citigroup Stand among Peers after Q3 Earnings?
As of October 15, of the 29 analysts covering Citi stock, 21 have given it “strong buy” or “buy” recommendations, seven have given it “hold” recommendations, and one has given it a “sell” recommendation.
JPMorgan Chase Reported Strong Growth in Core Banking
JPMorgan Chase’s Consumer and Community Banking segment has risen at a relatively faster pace due to higher interest rate spreads.
Higher Interest Rates Boost JPMorgan’s Q3 Earnings: Stock Rises
JPMorgan Chase (JPM) stock was 1.5% higher in pre-market trading today after it kicked off its third-quarter earnings on a strong note.
Will Global Consumer Banking Continue to Support Citi’s Revenue?
Citigroup is looking at areas outside the United States to expand its lending book, add credit card business, and add new assets under management.
Litigation and Probes Could Impact Wells Fargo’s Q3 Results
Continuous investigations and litigations are hurting Wells Fargo’s (WFC) bottom-line results.
Wells Fargo’s Loan Growth, Interest Rates, Property Prices
The US mortgage market is facing a slowdown, with mortgage rates increasing due to the Fed’s hawkish monetary policy.
What’s in Store for Wells Fargo This Earnings Season?
Wells Fargo (WFC) is scheduled to report its third-quarter results on October 12. It’s expected to post EPS of $1.17, implying a growth of 12.5% YoY.
Fed Hikes Interest Rates: Banks Fall on Lending Slowdown Concerns
Banking stocks closed lower on Wednesday after the Federal Reserve raised interest rates a quarter of a point to 2%–2.25%.
Is JPMorgan Stock Cheap or Expensive at Its Current Valuation?
JPMorgan Chase (JPM) is currently trading at a PBV ratio of 1.65x, a considerable premium to the industry (XLF) average of ~1.48x.
JPMorgan Chase Sweetens Sapphire Reward Offers
In an effort to retain existing customers and add new customers, JPMorgan Chase (JPM) has sweetened the offerings for its Sapphire accounts.
Bank of America’s Expanding Balance Sheet
Bank of America’s (BAC) balance sheet has been improving. Its assets grew 3.3% YoY in Q2 2018 and reached $2.33 trillion.
Consumer Banking Segment: The Key to Bank of America’s Growth
In the second quarter, BAC’s core Consumer Banking segment reported net income of $2.9 billion compared to $2.7 billion in Q1 2018.
Did You Miss Out by Overlooking Bank of America Stock?
With a YTD return of 5%, Bank of America (BAC) is currently the second-best-performing stock among the five largest US banks.
JPMorgan Chase’s Double-Digit Revenue Growth
JPMorgan Chase (JPM) registered double-digit revenue growth for two consecutive quarters. JPMorgan Chase has outperformed its peers.
Wells Fargo Is Focusing on Improvements in These Two Areas
In the last two quarters, Wells Fargo & Company (WFC) has seen a decline in its loanbook while its peers have managed growth of 2%–7%.
Why Wells Fargo’s Net Interest Margin Expanded Last Quarter
Wells Fargo & Company’s (WFC) net interest margin has traditionally been the widest among major bankers (XLF).
Wells Fargo’s Quarterly Results Lagged Its Top Peers’
Wells Fargo & Company’s (WFC) operating performance has remained mostly stagnant since 2017, with no significant growth.
Wells Fargo’s WB Unit Faces Federal Probe for Potential Fraud
Wells Fargo is in trouble again, with the US Department of Justice suspecting potential employee fraud in its Wholesale Banking unit.
Investing and Lending Segment to Boost Goldman Sachs’ Revenues
In the second quarter, Goldman Sachs’ assets under management increased by $15.0 billion to $1.5 trillion.
Investment Banking: A Key Revenue Driver for Goldman Sachs
Goldman Sachs registered YoY growth of 27.0% in its second-quarter underwriting revenues.
JPMorgan Launches the Highly Anticipated You Invest Platform
JPMorgan Chase (JPM) has launched its much-awaited free digital investment platform—You Invest—with 100 free online trades for customers.
Why Wells Fargo Stock Underperformed the Banking Industry YTD
Wells Fargo’s efficiency ratios for the first and second quarters rose 290 basis points and 400 basis points, respectively, on a YoY basis.
Warren Buffett’s Berkshire Hathaway Is Buying Stake in Paytm
Berkshire Hathaway has confirmed its investment in One97 Communications, the parent company of India’s largest digital payment platform, Paytm.
Online Brokers Fell on JPMorgan’s ‘You Invest’ Free Service News
Shares of online brokerages were hit hard this morning after CNBC reported that JPMorgan Chase is launching a new digital investment app.
Citigroup: Expanding Its Balance Sheet while Reducing Risk
Citigroup’s (C) balance sheet has been growing at a faster pace in recent quarters.
A Look at the Top Five US Banks’ Valuations
On a TTM basis, JPMorgan Chase trades at a price-to-book ratio of 1.7x, while the industry average stands at 1.6x.
Fed’s Hawkish Monetary Policy to Drive Banks’ Profitability
At the current 2.0% rate, the Federal funds rate is still very low when compared with the pre-recession rate of 5.25% in June 2006.
Strong Q2 Results, Economic Activities Driving Financial Sector
Since the start of July, the Financial Select Sector SPDR ETF (XLF), which has ~50% exposure to the banking industry, has gained ~5.2%.
Currencies and Fixed Income to Dominate Trading for Goldman Sachs
US broad market volatility (VIX) rose sharply towards 40 in February 2018 as panic selling started on valuations and rate hikes.
How Goldman Sachs Is Benefiting from Volatile Markets
In the second quarter, Goldman Sachs posted EPS of $5.98 compared to estimates of $4.66.
Fintech Startups Grabbed a Larger Share of US Personal Loans
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.
Wells Fargo Poised to Take Advantage of Strong Balance Sheet
While Wells Fargo (WFC) has seen a decline in its loan book this year, peers have managed growth of 2%–7%.
Trade and Currency Wars Impact Wells Fargo
The Trump administration has seen through changes in the Dodd-Frank Act, reduced corporate tax, and is now targeting a trade war, higher rates, and possibly a currency war.
KKR Posts Q2 2018 Results: AUM Rises Sequentially
KKR & Co. (KKR) reported its second-quarter earnings on July 26. Its EPS was $0.49, which beat analysts’ expectation of $0.45.
Could Investor Interest in Alternatives Change Analysts’ Ratings?
Apollo Group Management has “strong buy” ratings from the five of the 15 analysts covering the stock in July.
Here’s What Led to Apollo Global Management’s Premium Valuation
Apollo Global Management’s (APO) PE ratio is 13.29x on an NTM (next-12-month) basis.
Apollo Global: How Investor Interest in Real Estate Could Help
In H2 2018, Apollo Global Management’s (APO) real estate business could see a negative impact due to expectations of interest rate hikes.
How Monetary Policy Could Impact Apollo’s Credit Segment
The credit segment of Apollo Global Management generated management fees of $183 million in the first quarter, which reflects a rise of 15.6% YoY.
Can Apollo Global Management’s Q2 2018 Impress Investors?
On August 2, Apollo Global Management (APO) is expected to report its second-quarter results. It’s expected to report EPS of $0.54.
Acquisitions Boost Invesco’s Assets under Management
Invesco (IVZ) reported its second-quarter results today, posting EPS of $0.66.
Berkshire’s Premium Valuations amid Acquisition Expectations
Berkshire Hathaway (BRK.B) stock has risen 4.7% in the last month and 15.9% in the last year.
How Berkshire Could Make Use of Excess Liquidity
Berkshire Hathaway’s (BRK.B) liquidity of over $115 billion is rising at a faster pace owing to strong cash flow generation.
Lower Claims, Pricing, Reinsurance Key to Berkshire’s Insurance
Berkshire Hathaway’s (BRK.B) Insurance segment saw subdued growth in the second half of 2017 on reinsurance losses.
Investors Await Berkshire Hathaway’s Next Acquisition in 2018
Berkshire Hathaway (BRK.B) had liquidity of $118 billion at the end of the first quarter.
Trading Revenues Boosted Banks’ Second-Quarter Earnings
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.
Earnings Growth Drove Financials Last Week
Even though broader markets remained flat last week, US financials rose due to strong earnings growth from leading banks.
State Street’s Second-Quarter Earnings and Acquisition Plan
On July 20, State Street (STT) reported its second-quarter earnings. The company’s EPS was $2.05, which surpassed analysts’ expectations by $0.04.
How T. Rowe Price’s Valuation Compares
T. Rowe Price’s (TROW) NTM (next-12-month) PE ratio is 15.19x, higher than peers’ average of 10.08x.
What Could Help T. Rowe Price in Q2 2018
Of T. Rowe Price’s (TROW) total assets under management in the first quarter, $579.3 billion comprised equity, $135.8 billion comprised fixed income and money market assets, and $299.1 billion were multi-asset funds.
How Macros and Monetary Policies Could Drive TROW’s Performance
Donald Trump’s imposition of additional tariffs on $200 billion in Chinese imports has increased trade tension, which could impact the global economy and business.
Can the US-China Trade Battle Impact Blackstone’s Q2 2018?
On July 19, The Blackstone Group (BX) is expected to report its Q2 2018 earnings. Analysts expect EPS of $0.74, a YoY rise of 25.4%.
State Street’s Investment Servicing Division: What’s Ahead?
In the first quarter, State Street’s Investment Servicing division garnered net interest income of $663.0 million for a YoY increase of 30.0%.
Factors that Could Impact State Street’s Earnings in Q2 2018
State Street (STT) plans to release its Q2 2018 earnings on July 20. It expects to report EPS of $2.01, a year-over-year increase of 20.35%.
Goldman Sachs Earnings Preview: Trading, Underwriting, Stress Test
Goldman Sachs (GS) is expected to report its Q2 earnings on July 17, with anticipated EPS of $4.66, an implied growth of 18% YoY.
Citigroup Beat Estimates—Sequential Decline in Banking, Trading
Citigroup (C) reported its second-quarter earnings today. The bank beat EPS estimates of $1.56 with EPS of $1.63, helped by a lower-than-expected decline in the global banking business and trading activity sequentially.
Key ADP Highlights: 177,000 Private Jobs in June
According to the ADP report, the private sector had softer improvement in June than in May and didn’t meet the market expectation.
How Wall Street Rates BlackRock and Asset Managers
Analysts gave BlackRock a price target of $613.15 on an NTM basis.
How Blackstone’s Valuations Compare to Peers
The Blackstone Group (BX) has a price-to-earnings ratio of 10.40x on an NTM (next-12-month) basis, while the peer average is 10.17x.
Here’s What Could Affect Blackstone’s Real Estate Segment
The real estate segment of Blackstone Group (BX) garnered total revenues of $641 million in the first quarter, a decline of 17% on a YoY (year-over-year) basis.