You may remember an article I wrote in June of this year (we got lots of comments on it) about my Dad receiving a letter in the mail telling him that if the cash portion of his stock brokerage balance fell below $125,000, he would be charged a yearly fee of $500.00 to keep his account open. (See “About That Letter My Dad Got in the Mail Friday.”) Now, it looks like regular banks (not just stock accounts) are doing the same…. Read More
We all know that interest rates are eventually heading higher. It might be in 2014, but more likely not until 2015, when the unemployment rate can decline to 6.5% as the Federal Reserve believes.
But one thing for sure is that interest rates are headed higher. (Read “Small-Cap Stocks the Place to Be—If Economic Growth Is Real.”)
The best way for an investor to take advantage of the situation is to concentrate on big bank stocks…. Read More
The major bank stocks all closed off 2012 near their respective 52-week highs. An upside break appears to be in the works, as the banking industry continues to assume less risky businesses, while shoring up their balance sheets and producing stronger units.
The subprime credit crisis that surfaced in 2008 and drove the U.S. and the global economy into a recession was not what we wanted to see. But in some sort of twisted way, the events have led to an industry that has restructured the way banks do business, specifically the amount of risk that is assumed by a bank via sophisticated strategies…. Read More
The damage done from job losses over the past few years has been quite severe. I think the biggest problem going forward is the realization that the economy, during the past decade, was artificially inflated due to easy monetary policy; therefore, many of the industries were operating far above fundamentally sound levels.
One of these sectors that were running far above optimal levels was the financial services and bank stocks sector…. Read More
The last two years have obviously been extremely difficult for bank stocks. The financial crisis that took hold of not only America but the rest of the world as well has caused extreme strain across the entire financial sector. However, since the financial crisis several years ago, American banks have substantially shifted their risk and investment strategy and are on a much more solid footing now.
While smart investors used the selloff in bank stocks as an opportunity to buy, this investment strategy has not worked for all firms…. Read More
When it comes to bank stocks, it seems that JPMorgan Chase & Co. (NYSE/JPM) is Public Enemy Number One. It’s unfortunate that so many retail investors have such a negative market sentiment towards JPMorgan since it has the potential for large returns, with a dividend yield of 2.9%.
The latest cheap shot is nothing short of a publicity stunt by a future politician, as the office of New York Attorney General Eric Schneiderman has just filed a civil lawsuit against a unit of JPMorgan, The Bear Stearns Companies, Inc., for alleged fraud…. Read More
Bank stocks have been rallying since the lows in October 2011.
The chart of the Philadelphia Bank Index shows the upward move of bank stocks from the 2011 bottom. Banks staged a nice rally, but retrenched in March to May 2012 on the European bank concerns and after Moody’s Investor Services downgraded the sector. The group has since staged a rally back to above the 50-day and 200-day moving averages.
Yet while the outlook appears to be encouraging, there is a move amongst some politicians to restrict the size and scope of the big banks as dictated by the Brown-Kaufman amendment…. Read More
Over the last decade, Internet shopping has changed the retail market sector forever. Whereas once large retail stocks such as Best Buy Co., Inc. (NYSE/BBY) dominated the landscape for electronics, new companies like Amazon.com, Inc. (NASDAQ/AMZN) are taking over with speed, ease of service, and reliability.
Another problem for large retail stocks is beyond the normal hassles for consumers, such as driving to the store with the higher cost of gasoline and increased traffic…. Read More
With his recent comments on the idea of breaking up the big bank stocks, Sanford Weill, former CEO of Citigroup, Inc. (NYSE/C), joins an increasingly large group of analysts, experts, and former employees within the sector who are raising concerns and voicing opinions that the current banking situation is in need of structural change. The comments from Weill and others who have worked in the financial sector are surprising in that their investment strategy for many years has been to increase the size and scope of the big bank stocks…. Read More
It’s not enough we have to deal with the dire economic situation in the eurozone and Europe, but now bank stocks are under attack, especially from Moody’s Investors Service, which is negative on the banking sector. The quality of bank stocks has been improving, but clearly the credit rating agency is a bit on the cautious side and likely making up for not being tough enough with its ratings leading up to the credit crisis in 2008 that drove the global economies into a recession…. Read More