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XOM | US STOCKS Dow S P 500 dip but biotech lifts Nasdaq | Consumer confidence slips oil prices hit energy shares
Healthcare sector leads late recovery
Amgen beats Wall St s estimates bolsters biotech shares
Dow off 0 1 pct S P off 0 3 pct but Nasdaq up 0 4 pct
Updates to add volume
By Rodrigo Campos
NEW YORK July 28 Reuters The Dow and the S P 500
dipped on Tuesday as investors shrugged off weak consumer
confidence data and focused on positive earnings reports
Stocks recovered most of the session s losses late in the
day led by the healthcare sector Investors snapped up
biotech shares a day after Amgen s strong quarterly earnings
report
The health insurance sector also rose after Coventry
Health Care s earnings topped Wall Street s estimates
Strong earnings have given a second wind to a stock market
rally that wilted in June after a 40 percent gain in the S P
500 from its 12 year closing low in March
We ve seen an 11 percent rally in two weeks said Tim
Smalls head of U S stock trading at Execution LLC in
Greenwich Connecticut
He said that with stocks recent sharp gains the market
was looking for a reason to take a breather so the slight
decline in Tuesday s session is a good performance
Smalls added that a lot of the afternoon recovery was
linked to a poor U S Treasury auction as money shifted from
bonds into the stock market
Shorter dated U S Treasury debt fell after weak results
in an auction of a record 42 billion of two year notes had
some analysts wondering if the global appetite for U S
government debt might be waning
The Dow Jones industrial average shed 11 79 points or
0 13 percent to 9 096 72 The Standard Poor s 500 Index
dropped 2 56 points or 0 26 percent to 979 62
But the Nasdaq Composite Index gained 7 62 points or 0 39
percent to 1 975 51
Earlier on Tuesday the U S consumer confidence index
declined more than expected in July a second consecutive
monthly fall as a sluggish labor market continued to worry
consumers the Conference Board said
AMGEN S HEALTHY INFLUENCE
Among the Nasdaq s major advancers Amgen s stock rose 2 7
percent to 62 42 following the company s release of much
better than expected second quarter earnings after Monday s
closing bell The Dow Jones biotechnology index gained 1 8
percent
Coventry Health Care shares rose 12 7 percent to 22 59 on
the New York Stock Exchange after the company s earnings
topped Wall Street s estimates and it lifted its full year
earnings forecast
Aetna jumped 12 6 percent to 28 96 after at least three
brokerages said the insurer s recently slashed 2009 earnings
forecast is achievable Aetna and Coventry helped push the
Morgan Stanley Healthcare Payors index up 6 5 percent
But the energy sector s shares weighed on the broader
market as the weak consumer confidence data took a toll on oil
prices which had risen on optimism about the economic
recovery U S front month crude futures dropped 1 15 or 1 7
percent to settle at 67 23 a barrel
Exxon Mobil Corp down 1 2 percent at 71 89 was the top
drag on the Dow industrials The S P energy index slid 1 5
percent
Office Depot the No 2 U S office supply retailer
reported a bigger than expected quarterly loss as the
recession bit into demand from corporate customers The stock
tumbled 18 1 percent to 4 38
U S Steel Corp shares fell 2 2 percent to 40 35 after
the company reported a quarterly loss and said it expected all
of its business sectors to operate in the red in the third
quarter
U S single family home prices rose in May from April the
first monthly increase in nearly three years the Standard
Poor s Case Shiller home price indexes showed
Volume was light on the New York Stock Exchange where
about 1 24 billion shares changed hands less than last year s
estimated daily average of 1 49 billion On the Nasdaq about
2 23 billion shares traded close to last year s daily average
of 2 28 billion
Decliners outnumbered advancers on the NYSE by a ratio of
about 8 to 7 But on the Nasdaq the opposite trend prevailed
Seven stocks rose for every six that fell
Editing by Jan Paschal |
XOM | GLOBAL MARKETS Stocks rebound oil surges on U S energy data | Oil rises toward 72 on signs of U S demand recovery
Market unease over China lifts yen but euro resilient
Debt prices climb as investors go for lower risk assets
China losses shake fragile economic confidence
Updates with U S markets activity changes dateline
previous LONDON
By Herbert Lash
NEW YORK Aug 19 Reuters U S stocks rebounded and oil
jumped to almost 72 a barrel on Wednesday after data suggested
a recovery in U S oil demand a surprise for investors who had
been fretting over a sharp slide in Chinese equities
A U S government inventory report showed a huge drop in
crude supplies last week which boosted oil futures more than 4
percent at one point and lifted Wall Street sentiment that had
turned dour after a 4 3 percent a drop in the Shanghai
Composite Index
The drop took losses on the key Chinese index to 20 percent
over the past two weeks a plunge hard for investors to ignore
considering China s role in any global recovery
Copper fell to its lowest level in just over two weeks and
government debt prices in Europe and the United States rose as
investors sought havens in less risky assets
But oil reversed early losses after the U S Energy
Information Administration EIA said crude stocks fell by 8 4
million barrels last week confounding analyst expectations for
a rise of 1 3 million barrels EIA S
I think these demand changes are reflective of an
improving economy but one must be cautious because these
changes are versus year ago weak numbers said API chief
economist John Felmy
The news lifted U S stocks that had been down about 1
percent The S P Energy index gained almost 2 percent
making it the top sector performer Exxon Mobil and
Chevron also rose about 2 percent each
Oil is helping us said Rick Meckler president of
LibertyView Capital Management in New York It s a big part of
the index and energy companies have helped turn this market
before
After 1 p m the Dow Jones industrial average rose
71 34 points or 0 8 percent to 9 289 28 The Standard
Poor s 500 Index added 7 78 points or 0 8 percent to
997 45 The Nasdaq Composite Index gained 13 12 points
or 0 7 percent to 1 969 50
European equities ended lower after a choppy session with
weaker financial and automobile stocks outpacing a rise in oil
and gas shares But oil producers helped Britain s leading
share index to end slightly higher
The FTSEurofirst 300 index of top European shares
closed 0 3 percent lower at 931 98 points
The dollar fell against the yen after China s stock market
slide raised concerns about the strength of a global recovery
while boosting the Japanese currency s safe haven appeal
But the recovery in U S equities helped higher risk
currencies recover losses and the euro pushed above 1 42 and
was on track for its biggest daily rise against the dollar in
more than two weeks
The spike in oil prices also helped higher risk assets and
currencies recover losses sparked by China s stock market
Negative sentiment hasn t disappeared but it has abated
with both the S P and Dow paring losses said
Matthew Strauss senior currency strategist at RBC Capital
Markets in Toronto That gave the market a chance to push the
euro higher
The dollar hit a one month low against the yen and was last
down 0 9 percent at 93 83 yen The euro was unchanged at
133 83 yen well above a one month low of 132 16
September Bund futures settled up 50 ticks at
122 67
The benchmark 10 year U S note meanwhile
recently traded 9 32 higher in price to yield 3 49 percent
The MSCI index of Asia Pacific stocks
outside Japan slipped 0 3 percent while Japan s Nikkei share
average finished 0 8 percent lower
Reporting by Stephen C Johnson Chris Reese in New York
David Sheppard Dominic Lau Atul Prakash George Matlock and
Jan Harvey in London writing by Herbert Lash Editing by
Leslie Adler |
WFC | Hanesbrands 1 after Wells Fargo cut | Hanesbrands NYSE HBI is on watch after Wells Fargo lowers the apparel stock to an Underweight rating from Market Perform Analyst Ike Burochow says the health of the Hanebrands innerwear business continues to be a concern and notes a deceleration in the consumer appeal of the Champions brand Wells lowers its price target on HBI to 12 from 9 which is based off 7X to 8X multiple to the FY20 EBITDA estimate Shares of Hanesbrands are down 1 35 premarket to 14 65 |
WFC | G III Apparel 2 after Wells Fargo nod | Wells Fargo lifts G III Apparel NASDAQ GIII to an Overweight rating after having the apparel manufacturer set at Equal Weight Analyst Ike Burochow says it appears liquidation of GIII s Wilson s and Bass retail businesses could come shortly While the rest of the retail business is also unprofitable loses approximately 15 to 20 million exiting the legacy businesses would be a big step forward in returning the retail segment to profitability he notes He thinks G III Apparel will benefit from reduced tariffs on List 4A goods a factor that he doesn t believe is reflected in Street estimates Upside potential to Q4 results is also seen after a strong performance from CK jeans and sequential improvement in the outerwear category WF pushes its price target up to 42 from 27 which is 13X to 14X the FY21 EPS estimate and reps 25 upside potential The average sell side PT on G III Apparel is 31 67 Shares of GIII are up 1 79 premarket to 34 10 |
XOM | GLOBAL MARKETS WEEKAHEAD More fuel needed to sustain 2009 highs | By Natsuko Waki
LONDON July 24 Reuters World stocks will rely next week
on another flood of major corporate earnings results and crucial
U S growth data to surprise on the upside in order to sustain a
rally which has pushed the benchmark index to nine month peaks
The MSCI world equity index has risen more than 6 percent
this week to hit its highest since mid October Since January
the index has risen more than 14 percent recouping some of the
43 5 percent decline suffered last year
The rally has largely to do with some forecast beating
earnings reports from the both sides of the Atlantic While
results are not unanimously spectacular 117 out of 154 firms on
the S P 500 or 76 percent have beaten forecasts according
to Thomson Reuters data
Next week s releases include Honeywell Verizon Time Warner
Exxon Mobil Motorola Deutsche Bank BP and Royal Dutch Shell
U S growth data on Friday is expected to show the world s
biggest economy shrank less in the second quarter with GDP
coming in at 1 6 percent compared with 5 5 percent in the
first three months
Since we are at the beginning of a cyclical recovery the
outperformance of equities over bonds has only just begun said
Phlipp Bartschi chief strategist at Swiss asset manager
Sarasin
The market would need to see good results to confirm the
latest move The market might need to consolidate a bit before
breaking higher
Merrill Lynch Global Wealth Management expects strong
overseas demand and a weaker dollar would allow U S firms to
post revenue growth of 4 6 percent from the previous quarter and
a 10 percent rise in operating earnings
Broadly speaking U S company profits as a share of GDP
should continue to remain above the long term average on the
back of higher contributions from overseas and very stiff cost
control in recent quarters Merrill s portfolio strategist Bill
O Neill said in a note to clients
There is however little scope for disappointment at this
juncture
According to Thomson Reuters data firms on the S P 500
index are expected to see their earnings per share contract by
30 8 percent in the second quarter This forecast was upgraded
from April when the expected contraction rate was at 31 1
percent
In the third quarter the rate is expected to improve further
to 21 1 percent before swinging back to growth in the final
three months of 2009 It is this expected year end leap back to
positive territory which is encouraging many fund managers to
keep accumulating equity at these levels
IMPROVING CAPITAL RAISING
Given huge liquidity injection and easier monetary policy by
central banks firms are seeing improved conditions for capital
raising in equity and bond markets
According to UBS firms raised a total of 80 billion
through equity issuance and in the form of common stocks rather
than preferreds In May alone they raised more than 60 billion
the largest single month figure over the past few years
During these two months only less than 1 billion were in
the form of initial public offerings while the vast majority
was for secondary offerings a sign UBS said that most
investors wish to stick with existing companies with strong
chances of returning to profitability
In 2008 only 7 2 billion were raised through IPOs and so
far this year the figure is only 1 7 billion
Better conditions and greater investor confidence is a
factor in the jump but if corporates believe the window of
opportunity may shut again Q2 proved to be the best time to
obtain funds Geoffrey Yu strategist at the Swiss firm said
in a note to clients
The still shut IPO market is a clear sign that investor
appetite has not normalised
Editing by Andy Bruce |
XOM | US STOCKS Wall St sags as consumer data earnings spur caution | Repeats to broaden distribution
Office Depot US Steel post losses stocks slide
Consumer confidence slips oil prices hit energy shares
Dow falls 0 6 pct S P off 0 9 pct Nasdaq off 0 4 pct
Updates to midday changes byline
By Rachel Chang
NEW YORK July 28 Reuters U S stocks fell on Tuesday
as a drop in consumer confidence and disappointing quarterly
results from companies like Office Depot Inc dampened hopes
for a strong economic recovery
U S consumer confidence declined more than expected in
July according to the Conference Board The numbers marked
the second consecutive monthly drop as a sluggish labor market
continued to worry consumers
That s the big negative said Thomas Nyheim vice
president and portfolio manager at Christiana Bank Trust Co
in Greenville Delaware The worse than expected number is
what s taking from the market today
Office Depot the No 2 U S office supply retailer
reported a bigger than expected quarterly loss as the
recession hurt demand from corporate customers The stock slid
20 4 percent to 4 26
The slide in consumer confidence also hit oil prices
which weighed on energy shares Exxon Mobil Corp dropped 2
percent to 71 27 The S P energy index tumbled 2 8 percent
the sector was the biggest drag on the benchmark S P 500
U S front month crude declined 2 2 percent or 1 52 to
66 86 a barrel
The Dow Jones industrial average slipped 54 64 points or
0 60 percent to 9 053 87 The Standard Poor s 500 Index
fell 8 95 points or 0 91 percent to 973 23 The Nasdaq
Composite Index dropped 8 66 points or 0 44 percent to
1 959 23
The S P 500 is up about 44 percent from the 12 year
closing low it hit in early March
With the second quarter earnings season at about the
halfway mark investors are pulling back a bit and paying more
attention to economic data for signs that the recovery is
gaining traction
The market s rallied pretty hard for the last two months
There s an anticipation that it ll pause Nyheim said
U S Steel Corp reported a second consecutive quarterly
loss and said it expects all its business sectors to operate
in the red in the third quarter The company said customer
orders had increased but the outlook for overall demand and
economic recovery was uncertain
Its stock dropped 3 5 percent to 39 82
U S single family home prices rose in May from April
according to Standard Poor s Case Shiller home price indexes
released on Tuesday This is the first monthly increase in
nearly three years suggesting stabilization in the housing
market
Editing by Jan Paschal |
XOM | US STOCKS Dow S P dip but Nasdaq up with biotechs | Consumer confidence slips oil prices hit energy shares
Amgen beats Wall St estimates boosts biotech shares
Dow off 0 4 pct S P off 0 5 pct but Nasdaq up 0 1 pct
Updates to late afternoon changes byline
By Rodrigo Campos
NEW YORK July 28 Reuters The Dow industrials and the
S P 500 slipped on Tuesday as signs of a strong economic
recovery were put to the test by a large drop in consumer
confidence and disappointing quarterly results from Office
Depot and U S Steel among other companies
But the Nasdaq edged higher buoyed by gains in the
biotechnology sector a day after Amgen s strong quarterly
earnings report
The U S consumer confidence index declined more than
expected in July a second consecutive monthly fall as a
sluggish labor market continued to worry consumers the
Conference Board said
Amgen shares rose 3 2 percent to 62 70 following the
company s release of much better than expected second quarter
earnings after Monday s closing bell The Dow Jones
biotechnology index rose 2 percent
But the energy sector s shares weighed on the broader
market as the weak consumer confidence data took a toll on oil
futures prices which had risen on optimism about the economic
recovery U S front month crude futures dropped 1 15 or 1 7
percent to settle at 67 23 a barrel The S P energy index
slid 1 9 percent
Exxon Mobil Corp down 1 4 percent at 71 71 was the top
drag on the Dow industrials
With the price of oil and other commodities retreating
the market is taking a bit of a breather said Craig Miller
vice president of healthcare trading at Stifel Nicolaus in
Baltimore
He said the weak consumer confidence data gave investors
a reason to sell some shares while Amgen s results were
bolstering biotech stocks
The Dow Jones industrial average slipped 32 42 points or
0 36 percent to 9 076 09 The Standard Poor s 500 Index
fell 4 66 points or 0 47 percent to 977 52 But the Nasdaq
Composite Index edged up 1 30 points or 0 07 percent to
1 969 19
Strong earnings had given a second wind to a stock market
rally that wilted in June after pushing the S P 500 up about
40 percent from its 12 year closing lose in March
But lowered expectations have shifted the focus to
earnings which have in some cases failed to impress
Office Depot the No 2 U S office supply retailer
reported a bigger than expected quarterly loss as the
recession hurt demand from corporate customers The stock slid
17 6 percent to 4 41
U S Steel Corp shares fell 1 7 percent to 40 58 after
the company reported a quarterly loss and said it expected all
of its business sectors to operate in the red in the third
quarter
Earlier on Tuesday Standard Poor s Case Schiller
released data that showed U S single family home prices rose
in May from April the first monthly growth in three years
Editing by Jan Paschal |
WFC | Wizards Thomas suspended two games by NBA | Washington Wizards guard Isaiah Thomas has been suspended two games by the NBA for entering the stands to confront two fans the league announced Sunday
NBA rules state that any player who deliberately enters the spectator stands during a game will be automatically ejected and subject to a fine and or suspension
Thomas will begin serving his suspension with Monday s game against the New York Knicks
Thomas was ejected from Saturday night s game between the Wizards and Philadelphia 76ers when he went into the stands during a timeout with 2 53 remaining in the fourth quarter
Thomas said a fan used an obscene gesture and shouted obscenities at him during the game
ESPN reported that a 76ers spokesperson said the fans admitted to the inappropriate language and gestures which violated arena policy
The two fans have been banned from Wells Fargo NYSE WFC Center in Philadelphia for one year
The fans were sitting in seats held by a season ticket holder The season seats also have been revoked the league said
Field Level Media |
WFC | Mike Mayo of Wells Fargo Says We Are Living in the Golden Decade of Banks and Technology | Wells Fargo NYSE WFC analyst Mike Mayo announced during a Dec 30 CNBC news segment that this is the golden decade of banks and technology
Mayo explained that while the 1990 s had record bank consolidation banking businesses merge with each other systems were never integrated He then explains that in the aughts decade the 2000s banks saw excessive growth which unfortunately ended in tears due to the financial crisis of 2007 2009 |
WFC | Capri 2 after Wells Fargo update | Wells Fargo lifts its rating on Capri Holdings NYSE CPRI to Overweight after having the global fashion company slotted at Equal Weight The firm points to the improving MK brand Versace opportunities and portfolio optionality in making its bullish call Wells assigns a price target of 47 vs the average sell side PT of 44 74 Shares of Capri are up 2 23 premarket to 39 00 vs the 52 week range of 25 25 to 50 00 |
WFC | Wells Fargo WFC Q3 Earnings Miss Estimates | Wells Fargo WFC came out with quarterly earnings of 0 92 per share missing the Zacks Consensus Estimate of 1 15 per share This compares to earnings of 1 13 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 20 A quarter ago it was expected that this biggest U S mortgage lender would post earnings of 1 16 per share when it actually produced earnings of 1 30 delivering a surprise of 12 07
Over the last four quarters the company has surpassed consensus EPS estimates three times
Wells Fargo which belongs to the Zacks Banks Major Regional industry posted revenues of 22 01 billion for the quarter ended September 2019 surpassing the Zacks Consensus Estimate by 4 19 This compares to year ago revenues of 21 94 billion The company has topped consensus revenue estimates three times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Wells Fargo shares have added about 6 9 since the beginning of the year versus the S P 500 s gain of 18 3
What s Next for Wells Fargo
While Wells Fargo has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Wells Fargo was unfavorable While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 5 Strong Sell for the stock So the shares are expected to underperform the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 1 08 on 19 95 billion in revenues for the coming quarter and 4 69 on 83 71 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Banks Major Regional is currently in the bottom 27 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
WFC | 3 Wells Fargo Mutual Funds For Superlative Returns | Wells Fargo NYSE WFC Advantage Funds managed more than 495 billion of assets as of Jun 30 2019 from diverse mutual funds categories The fund family manages a wide variety of mutual funds from domestic and foreign funds to money market funds asset allocation funds and fixed income funds The Wells Fargo Fund family claims that it offers funds in every key category each guided by professional investment teams that have been chosen because of their proven time tested strategies Additionally the owner of the Wells Fargo Advantage Funds brand Wells Fargo is one of the top four banks in the United States which has been maintaining its standard in the financial services sector for more than 150 years It is a highly diversified financial services company with operations not limited to the domestic market Below we share with you three top ranked Wells Fargo Advantage Funds Each has earned a Strong Buy and is expected to outperform peers in the future To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Wells Fargo Utility and Telecommunications A invests heavily in common and preferred stocks and investment grade debt securities of utilities and telecom service providers EVUAX also invests around 35 of its assets in convertible debentures of utilities and telecom companies EVUAX has year to date returns of 25 As of August 2019 EVUAX held 33 issues with 10 50 of its assets invested in Visa Inc NYSE V Class A Wells Fargo International Bond Fund Class R6 aims for total return The fund invests majority of its assets in foreign debt securities These may comprise obligations of governments corporate bodies or supranational agencies spread across a range of currencies ESIRX has returned 6 6 in the year to date period Michael W Lee has been one of the fund managers of ESIRX since 1993 Wells Fargo Special Mid Cap Value Fund Class R6 aims for capital growth The fund invests majority of its assets in equity securities of medium capitalization companies These companies usually have market capitalizations similar to those on the Russell Midcap Index at the time of purchase WFPRX has returned 25 5 on a year to date basis WFPRX has an expense ratio of 0 73 compared with the category average of 1 10 To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires October 15 2019 | If your advisor has you invested in any of these Mutual Fund Misfires of the Market with high fees and low returns you need to rethink your advisor
High fees plus poor performance It s a pretty simple formula for a bad mutual fund Some are worse than others and some are so bad that they have earned a Strong Sell on the Zacks Rank the lowest ranking of the nearly 19 000 mutual funds we rank daily
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Columbia Disciplined Small Core A LSMAX This fund has an expense ratio of 1 36 and a management fee of 0 85 Without even doing any in depth analysis just the fact that you are paying more in fees than you re earning in returns is reason enough not to invest LSMAX is a Small Cap Value mutual fund option which typically invest in companies with market caps under 2 billion The fund has lagged performance wise so perhaps a simpler index future investing strategy might be more effective
Ivy Natural Resources Y IGNYX 1 33 expense ratio 0 85 IGNYX is classified as a Sector Energy mutual fund Throughout the massive global energy sector these funds hold a wide range of quickly changing and vitally important industries This fund has yearly returns of 8 33 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Hartford International Small Company A HNSAX This fund has an expense ratio of 1 49 and management fee of 0 9 HNSAX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too With an annual average return of 0 09 over the last five years the only thing absolute about this absolute return fund is that it absolutely deserves to be on our worst offender list
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Nationwide Growth Fund A NMFAX is a winner with an expense ratio of just 0 93 and a five year annualized return track record of 10 63
Principal Capital Appreciation R3 PCAOX has an expense ratio of 1 06 and management fee of 0 47 PCAOX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset With annual returns of 10 55 over the last five years this is a well diversified fund with a long track record of success
Wells Fargo NYSE WFC Utility Telephone Admiral EVUDX has an expense ratio of 1 11 and management fee of 0 65 Sector Utilities funds like EVUDX focus their investments on firms that provide essential daily services to millions of people like electric power gas distribution and water supply With annual returns of 10 84 over the last five years this fund is a well diversified fund with a long track record of success
Bottom Line
So there you have it if your advisor has you invested in any of our Mutual Fund Misfires of the Market there is a good probability that they are either asleep at the wheel incompetent or most likely lining their pockets with high fee commissions at your financial expense
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
XOM | UPDATE 2 CNOOC Sinopec to buy Angola stake from Marathon | Oil block stake valued at 1 3 bln
Marathon to maintain 10 percent interest
State companies in drive to buy energy assets
Adds detail background
By Tom Bergin
LONDON July 17 Reuters CNOOC and Sinopec have agreed to
buy a stake in an Angolan oil block from U S oil major Marathon
Oil as the Chinese state owned oil companies continue to buy up
overseas energy assets
The companies said in statements on Friday that the Chinese
companies would form a 50 50 venture and pay 1 3 billion for a
20 percent stake in the highly prospective block which has
already yielded 12 discoveries
The deal price is a comedown for Marathon which tried to
sell the stake for 2 billion in 2008 sources involved in the
process said at the time
Bidders then included the CNOOC Sinopec consortium India s
ONGC and Brazil s Petrobras the sources said
In recent years Chinese oil companies have been pacing the
globe in a government backed campaign to secure energy assets to
fuel the fast growing Asian powerhouse s economy
Angola which in recent years has become a major
international oil producer and an OPEC member has been a
particular focus
Marathon will retain a 10 percent working interest in the
block the company said
The companies said they expected to close the transaction by
the end of 2009
Shares in Marathon closed at 30 14 Thursday on the New York
Stock Exchange
The block is operated by French oil major Total which owns
a 30 percent stake while Texas based Exxon Mobil Corp holds 15
percent Portugal s Galp owns 5 percent and Angola s state owned
oil company Sonangol owns 20 percent
Additional reporting by Arup Roychoudhury in Bangalore
Editing by Anil D Silva and Simon Jessop |
WFC | Banking regulator rebuked Wells Fargo s HR department WSJ | Reuters A top U S banking regulator has rebuked Wells Fargo Co s N WFC human resources department for what it called the bank s backlog of employee complaints and compensation structures the Wall Street Journal reported on Wednesday citing people familiar with the matter In a July letter the Office of the Comptroller of the Currency laid out a lengthy to do list for the bank s HR department the WSJ reported The regulator asked the bank among other things to address issues regarding thousands of employee complaints an inadequate policy for clawing back compensation from executives and poor controls around pay according to the report Wells Fargo spokesman Mark Folk said the bank does not comment on specific regulatory matters but is making progress on its obligations
The OCC declined to comment |
WFC | Modest U S growth outlook static despite hopes for trade reprieve Reuters poll | By Shrutee Sarkar
BENGALURU Reuters A modest U S economic growth outlook has barely changed despite a majority of economists in a Reuters poll being reasonably confident an initial trade deal will be signed with China within the next three months
While financial markets have see sawed on the ebb and flow of headlines on a possible reprieve in the U S China trade war what happens over the coming year will depend on real progress being made according to strategists in separate Reuters polls
Similarly economists said some form of a trade deal between Washington and Beijing was much needed for the U S economy as it has lost considerable momentum since the standoff began in earnest about a year and a half ago
The Dec 2 5 poll consensus of 100 economists showed annualized gross domestic product growth would range between 1 6 1 9 in the quarters from here through to mid 2021 largely unchanged from last month and lower than 2 1 reported for the previous quarter
The Federal Reserve s preferred inflation gauge core PCE prices was expected to average 1 9 a touch below the central bank s target in 2020 and 2021 unchanged from the previous poll
The economic outlook has brightened or at least stopped worsening We expect a tepid recovery to uninspiring trend growth but with diminished economic and policy risks noted Ajay Rajadhyaksha head of macro research at Barclays LON BARC
Still fewer downside risks do not imply upside growth surprises
While economists expect some form of trade agreement between the U S and China they said what happens beyond any initial trade deal would dictate the course of the economy
Thirty two of 46 economists who answered an additional question said an interim trade deal between the U S and China would be signed within the next three months seven respondents said 3 6 months and two said in 6 12 months
Only five contributors said it would take over a year
Of those 32 economists who expect a deal within the next three months 19 said they were reasonably confident and one said very confident Eleven contributors said they were not confident and one economist did not reply to the question
We expect at least a limited U S China trade deal to be signed early next year that would forestall further tariff hikes with a chance that some existing tariffs are also rolled back added Barclays Rajadhyaksha
Further resolution of U S China trade negotiations could help even though the news flow remains volatile at the time of writing
With growth and inflation tepid worldwide most major central banks have eased monetary policy this year including the Fed which has cut interest rates three times in 2019
But the minutes of the U S central bank s October meeting showed policymakers were increasingly divided over whether a further rate cut was needed
The latest poll showed the Fed would keep rates on hold at 1 50 1 75 at its Dec 10 11 monetary policy meeting and stay on the sidelines until at least 2022
That compared to a cut in the third quarter of 2020 predicted in the previous poll and by the interest rate futures market
Still nearly 70 of 45 respondents who answered a separate question said the Fed s next interest rate move should be a cut The others said it should be a hike
Assuming some sort of trade deal gets done and the economic expansion continues in line with projections then we suspect the Fed will be on hold for a considerable period of time said Sam Bullard senior economist at Wells Fargo NYSE WFC
For other stories from the Reuters global long term economic outlook polls package
Polling by Sumanto Mondal Sujith Pai and Sarmista Sen Editing by Ross Finley and Chris Reese |
WFC | NBA roundup Robinson s career night carries Heat in OT | Duncan Robinson bombed in his ninth 3 pointer of the game 17 seconds into overtime then added a 10th later in the extra session as the host Miami Heat outlasted the Atlanta Hawks 135 121 on Tuesday night
Five players had career nights in the shootout led by Robinson who recorded career highs in points 34 and 3 pointers 10 on just 14 attempts
Miami rookie Kendrick Nunn led all scorers with a career high 36 points Bam Adebayo recorded a career first triple double with a career high 30 points 11 rebounds and a career high 11 assists and Jimmy Butler also notched a triple double with 20 points a career high 18 rebounds and 10 assists
Miami s starters combined for 124 of the team s 135 points
Rookie De Andre Hunter helped keep Atlanta in the game with a career high 28 points Trae Young backed Hunter with 21 points and nine assists for the Hawks who lost to the Heat for the third straight time this season
76ers 97 Nuggets 92
Joel Embiid had 22 points 10 rebounds and six assists and Philadelphia remained unbeaten at home with a win over Denver
Tobias Harris added 20 points Matisse Thybulle had 13 and Al Horford 11 as the Sixers improved to 13 0 at Wells Fargo NYSE WFC Center their best home start since winning 22 in a row in 1966 67
Will Barton led the Nuggets with 26 points and Nikola Jokic added 15 points 11 assists and seven rebounds Gary Harris also scored 14 points while Paul Millsap had 10 for Denver which lost Jamal Murray to a hip injury in the first quarter
Hornets 114 Wizards 107
Devonte Graham had another big second half on his way to scoring 29 points and Charlotte made key conversions on offense down the stretch to pull out a victory against visiting Washington
Terry Rozier had 17 points for the Hornets and Miles Bridges finished with 16 P J Washington despite coming off an ankle injury sustained Sunday had 15 points Cody Zeller had 14 points and 10 rebounds and Bismack Biyombo provided 13 points and 15 rebounds
Rui Hachimura had 18 points and 12 rebounds for Washington which lost its fourth straight road game Bradley Beal added 16 and Ish Smith chipped in 13
Trail Blazers 115 Knicks 87
Damian Lillard scored 31 points and matched his season best with eight 3 pointers to lead Portland to an easy victory over visiting New York
Hassan Whiteside recorded 17 points 15 rebounds and five blocked shots for Portland which won for just the second time in its past five games Carmelo Anthony and Anfernee Simons added 16 points apiece and CJ McCollum had 13
Julius Randle scored 15 points and Mitchell Robinson added 14 for the Knicks who lost their 10th consecutive game New York fell to 0 2 under Mike Miller the former college and G League coach who took over on an interim basis after the firing of David Fizdale
Field Level Media |
XOM | US STOCKS Grim jobs data hammers Wall Street | June payrolls data fuels worry about recovery
Broad sell off hammers market energy tech banks wilt
Dow off 2 pct S P 500 off 2 3 pct Nasdaq off 2 3 pct
Updates to late afternoon changes byline
By Ellis Mnyandu
NEW YORK July 2 Reuters U S stocks plummeted on
Thursday as a worse than expected slide in June non farm
payrolls fanned caution about economic recovery prospects
News that U S employers shed nearly half a million jobs
last month and that the unemployment rate jumped to 9 5
percent the highest in nearly 26 years dampened recent hopes
that the recession might be abating
Investors pummeled stocks broadly but energy
industrials financials technology and consumer oriented
shares were among the hardest hit sectors
These sectors were at the forefront of the broader
market s recent recovery from the 12 year closing lows of
early March as investors bet that the worst of the economic
slump was over
At best the jobs data served as a reality check and
signaled that any recovery will not be smooth sailing
analysts said
Quite frankly rising unemployment is bad for the entire
economy said Sasha Kostadinov portfolio manager at Shaker
Investments in Cleveland Ohio It s not positive for
discretionary stocks It s not positive for financials
because there s a direct correlation between the high
unemployment rate and charge offs and delinquent payments
The Dow Jones industrial average sank 173 44 points or
2 04 percent to 8 330 62 The Standard Poor s 500 Index
shed 20 91 points or 2 26 percent to 902 42 The Nasdaq
Composite Index dropped 42 84 points or 2 32 percent to
1 802 88
At the current pace the S P 500 was poised for its third
straight weekly drop But it is still up 33 percent from the
12 year closing low of March 9
Light volume due to Wall Street s thinly staffed trading
desks accentuated Thursday s sell off U S financial markets
will be closed on Friday for the U S Independence Day
holiday with July 4th falling on Saturday this year
On the technology front International Business Machines
Corp tumbled 2 2 percent to 102 56 making the stock the
Dow s top drag Apple Inc another tech bellwether slid 1 5
percent to 140 60 and was the Nasdaq s worst drag
In the energy sector Exxon Mobil Corp shed 2 5 percent to
68 82 as U S front month crude declined 2 51 or 3 6
percent to 66 80 a barrel
The S P energy index dropped 3 1 percent
NRG Energy Inc shares slumped 4 9 percent to 24 78 after
Exelon Corp raised its hostile takeover bid for the
independent power producer by more than 12 percent to 7 45
billion ahead of NRG s annual meeting
Among consumer oriented stocks department store operator
Macy s Inc lost nearly 5 percent to 11 16 while the S P
retail indexfell 3 5 percent
Housing stocks were not spared with the Dow Jones U S
home construction index down 2 7 percent The S P 500 s
consumer discretionary sector dropped 3 2 percent
In deal news healthcare giant Johnson Johnson said it
agreed to pay 1 billion for an 18 4 percent stake in Elan
Corp plc and will buy most rights to the Irish company s
portfolio of experimental drugs to treat Alzheimer s disease
Elan s U S traded shares shot up about 13 percent to
7 90 on the New York Stock Exchange while J J s stock a Dow
component fell 1 8 percent to 56 04
Data showing U S factory orders were better than expected
in May was overshadowed by the bleak news on the labor
market
Editing by Jan Paschal |
XOM | US STOCKS Wall St sinks on bleak June payrolls report | June payrolls data fuels worry about recovery
Broad sell off sinks market energy tech banks wilt
Dow off 2 6 pct S P off 2 9 pct Nasdaq off 2 7 pct
Updates to close
By Ellis Mnyandu
NEW YORK July 2 Reuters U S stocks tumbled on
Thursday driving the S P 500 down to its third straight
weekly loss as a steeper than expected slide in June non farm
payrolls revived caution about economic recovery prospects
News that U S employers shed nearly half a million jobs
last month and the unemployment rate jumped to 9 5 percent
the highest in nearly 26 years dampened recent hopes that the
recession might be abating
Investors pummeled stocks across the board but energy
industrials financials technology and consumer oriented
shares were among the hardest hit sectors
These sectors were at the forefront of the broader
market s recent recovery from the 12 year closing lows of
early March as investors bet that the worst of the economic
slump was over
All told the jobs data served as a reality check and
signaled that any recovery will not be smooth sailing
analysts said
Quite frankly rising unemployment is bad for the entire
economy said Sasha Kostadinov portfolio manager at Shaker
Investments in Cleveland Ohio It s not positive for
discretionary stocks It s not positive for financials
because there s a direct correlation between the high
unemployment rate and charge offs and delinquent payments
The Dow Jones industrial average dropped 223 32 points or
2 63 percent to 8 280 74 The Standard Poor s 500 Index
slid 26 91 points or 2 91 percent to 896 42 The Nasdaq
Composite Index sank 49 20 points or 2 67 percent to
1 796 52
The S P 500 fell for a third straight week But it s still
up 32 5 percent from the 12 year closing low of March 9
For the week the blue chip Dow average slipped 1 9
percent while the S P 500 dropped 2 5 percent and the Nasdaq
lost 2 3 percent
Light volume due to Wall Street s thinly staffed trading
desks accentuated Thursday s sell off
Additionally the New York Stock Exchange was hit by
connectivity glitches that affected orders originating from
the trading floor The NYSE extended its regular close from
2000 GMT to 2015 GMT to execute customer orders affected by
system irregularities
U S financial markets will be closed on Friday for the
U S Independence Day holiday with July 4th falling on
Saturday this year
On the technology front shares of International Business
Machines Corp a technology services giant tumbled 3 percent
to 101 73 making the stock the Dow s top decliner
Apple Inc another tech bellwether and the maker of the
iPhone slid 2 percent to 140 02 It was the Nasdaq s worst
drag
In the energy sector Exxon Mobil Corp shed nearly 3
percent to 68 49 while the S P energy index dropped 3 6
percent U S front month crude declined 2 58 or 3 7
percent to settle at 66 73 a barrel
NRG Energy Inc shares slumped 4 8 percent to 24 80 after
Exelon Corp raised its hostile takeover bid for the
independent power producer by more than 12 percent to 7 45
billion ahead of NRG s annual meeting
Among consumer oriented stocks department store operator
Macy s Inc lost 6 3 percent to 11 while the S P retail index
fell 4 percent
Housing stocks were not spared with the Dow Jones U S
home construction index down 3 percent The S P 500 s consumer
discretionary sector dropped 3 7 percent
In deal news healthcare giant Johnson Johnson said it
agreed to pay 1 billion for an 18 4 percent stake in Elan
Corp plc and will buy most rights to the Irish company s
portfolio of experimental drugs to treat Alzheimer s disease
Elan s U S traded shares jumped 8 6 percent to close at
7 60 on the New York Stock Exchange while J J s stock a Dow
component fell 1 9 percent to 55 98
Data showing U S factory orders were better than expected
in May was overshadowed by the bleak news on the labor
market
Editing by Jan Paschal |
XOM | US STOCKS Futures point to lower open on oil recovery jitters | Oil prices slide below 64 a barrel
Worries over strength of economic recovery weigh
Futures down S P 8 40 pts Dow 74 pts Nasdaq 10 50 pts
Writes through adds details quote
By Leah Schnurr
NEW YORK July 6 Reuters U S stock index futures
pointed to a lower open on Monday with a slide in oil prices
set to weigh on energy shares and as investors remained anxious
about the potential strength of the economic recovery
Oil sank to a five week low below 64 a barrel as
investors remained cautious over the prospects of a speedy
global economic turnaround in the wake of last week s grim U S
jobs data Shares of Exxon Mobil were down 1 4 percent at
67 54 in premarket trade
Although the weaker oil prices bode well for
recession weary consumers strong commodity prices have been
viewed as a signal the global economy is stabilizing
Last week s much weaker than expected jobs data weighed
heavily on the market as investors questioned what the economic
recovery will look like Market watchers were also looking
ahead to the start of earnings season which kicks off with
Alcoa this week
A little bit of fear factor is back into the marketplace
said Peter Cardillo chief market economist at Avalon Partners
in New York
The unemployment report was not a good report and it does
cast some doubt but I don t think it reverses the trend of
stabilization
Investors will take in the latest data with a look at the
services sector as the Institute for Supply Management releases
its June non manufacturing index at 10 00 a m EDT 1400
GMT
S P 500 futures fell 8 40 points and were below fair value
a formula that evaluates pricing by taking into account
interest rates dividends and time to expiration on the
contract Dow Jones industrial average futures slid 74 points
and Nasdaq 100 futures lost 10 50 points
Over the weekend Vice President Joe Biden said the White
House does not favor another stimulus package now though he
said that when it came into office the current administration
had misread how bad the economy was
A U S judge on Sunday approved General Motors Corp s
bankruptcy sale in a move that will allow the company s most
profitable assets to exit bankruptcy protection under
government ownership
Stocks tumbled on Thursday driving the S P 500 down to its
third straight weekly loss as a slide in June non farm
payrolls revived caution about economic recovery prospects
U S markets were closed on Friday for the Independence Day
holiday
Editing by Theodore d Afflisio |
WFC | Vendors squeezed in Wells Fargo cost cutting push | By Imani Moise
Reuters At least seven vendors have given Wells Fargo Co N WFC a partial refund for their services after bank executives pressured the contractors to return 2 5 of revenue earned last year according to sources familiar with the matter
In a bid to cut costs to offset higher regulatory spending Wells Fargo gathered about 14 of its IT vendors in Charlotte in July and asked for a rebate for 2018 In doing so the bank claimed the vendors had benefited from increased business from its various scandals
Many vendors felt compelled to pay up out of fear they may lose out on future business from the Wall Street giant
Wells Fargo spokesman Peter Gilchrist said participation in the voluntary rebate would not be considered when awarding future contacts Wells Fargo s investment in technology remains a strong priority and we value the strategic relationships we have with our vendors
Still many vendors feared not fulfilling the refund request would make their firms less competitive as Wells Fargo scales back its use of outside contractors The bank is expected to issue a new request for business proposals from its IT vendors in the first quarter of next year
The San Francisco based bank has leaned on cost cuts in recent years as the fallout from a wide ranging sales practices scandal has stunted revenue growth However increased spending on headcount and technology to satisfy regulators has caused the bank to back away from its expense targets
Chief Financial Officer John Shrewsberry recently pointed to professional services or work by consultants as a expense line that analysts and investors can expect to be reduced in the next quarter Costs attributed to outside professional services and data processing declined 17 last year
In 2018 the bank spent 660 million on outside data processing according to financial filings If the bank recouped 2 5 of that cost or 16 5 million it would only make a small dent in its 56 billion annual budget But for smaller IT firms like Richmond Virginia based Apex Systems giving a 2 5 refund to a large client like Wells Fargo could mean paying employees less or taking a hit to earnings
A Wells Fargo representative urged vendors not to pass on the expense to employees in the form of pay cuts according to an email exchange viewed by Reuters
Some of Well Fargo s IT vendors have already paid the 2018 rebate in full while others have asked to pay by installments according to the sources familiar with the situation
But the sources who requested anonymity since the matter is private said at least two vendors have refused to pay the rebate as a matter of principle
They re just expecting to unfortunately have the relationship end one of the sources said |
WFC | U S inflation firms on rising healthcare energy costs | By Lucia Mutikani
WASHINGTON Reuters U S consumer prices jumped by the most in seven months in October which together with abating fears of a recession support the Federal Reserve s signal for no further interest rate cuts in the near term
The report from the Labor Department on Wednesday showed healthcare costs surging by the most in more than three years and recreation posting its biggest gain since early 1996 But a moderation in rents suggested inflation would remain contained
The U S central bank last month cut rates for the third time this year and signaled a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008 That stance was reiterated by Fed Chair Jerome Powell in prepared testimony to lawmakers on Wednesday
There is little reason for the Fed to cut rates again anytime soon said Joel Naroff chief economist at Naroff Economic Advisors in Holland Pennsylvania Inflation is not trending downward the economy is just where so many of us thought it always was that is modest to moderate growth
The consumer price index increased 0 4 last month as households also paid more for energy products food and other goods That was the largest gain in the CPI since March and followed an unchanged reading in September
In the 12 months through October the CPI increased 1 8 after climbing 1 7 in September
Economists polled by Reuters had forecast the CPI advancing 0 3 in October and gaining 1 7 on a year on year basis
Excluding the volatile food and energy components the CPI rose 0 2 after edging up 0 1 in September The increase in the so called core CPI was limited by the retreat in rents which blunted somewhat the surge in healthcare costs and prices of used cars and trucks and recreation
In the 12 months through October the core CPI increased 2 3 after rising 2 4 in September
The Fed tracks the core personal consumption expenditures PCE price index for its 2 0 inflation target The core PCE price index rose 1 7 on a year on year basis in September and has fallen short of its target this year Though upbeat on the economy Powell continued to describe inflation as muted
The dollar briefly rose against a basket of currencies before ceding gains to trade flat U S Treasury prices rose while stocks on Wall Street were mixed
RENTS RETREAT
Firming inflation comes on the heels of fairly upbeat data including better than expected job growth in October and an acceleration in services sector activity
There has also been a de escalation of trade tensions between the United States and China President Donald Trump on Tuesday said Washington was close to signing a phase one trade deal with Beijing but provided no new details on negotiations
Last month s jump in healthcare costs suggest an uptick in the core PCE price index last month October producer price data due to be published on Thursday will shed more light on the core PCE price index which will be released later this month
In October energy prices vaulted 2 7 after falling 1 4 in the prior month Energy prices which were also driven by more expensive electricity accounted for more than half of the increase in the CPI last month
Gasoline prices rebounded 3 7 after declining 2 4 in September Food prices climbed 0 2 rising for a second straight month Food consumed at home gained 0 3
Owners equivalent rent of primary residence which is what a homeowner would pay to rent or receive from renting a home climbed 0 2 in October after rising 0 3 in September Other shelter categories also softened last month
The cost of hotel and motel accommodation dropped 3 8 As a result the rent index edged up 0 1 last month the smallest gain since April 2011 But with rental vacancy rates remaining low rents are likely to trend higher
Healthcare costs surged 1 0 last month the most since August 2016 after climbing 0 2 in September Healthcare costs were boosted by strong increases in the costs of hospital services and prescription medication Healthcare costs increased 4 3 on a year on year basis in October
Fed officials should go to the doctor if they think there is no inflation in the economy said Chris Rupkey chief economist at MUFG in New York Used motor vehicles and trucks prices increased 1 3 after decreasing 1 6 in September The cost of recreation surged 0 7 the largest increase since February 1996 Consumers also paid more for personal care products
There was no sign that a recent increase in tariffs on a range of imported Chinese consumer goods were impacting consumer prices Apparel prices fell 1 8 after dropping 0 4 in the prior month Prices for household furnishings declined 0 2
Prices for new motor vehicles declined for a fourth straight month There were also decreases in the costs of household furnishings and airline fares
Last month s rise in overall inflation ate into households purchasing power which could contribute to slowing consumer spending
While we expect the trend in inflation to firm dimmer prospects for U S growth amid the ongoing trade war will likely prevent inflation from breaking meaningfully above the Fed s target in the near term said Sarah House a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina |
WFC | Wells Fargo former interim CEO Parker steps down as general counsel | By Bharath ManjeshR and Imani Moise Reuters Wells Fargo Co N WFC said on Thursday general counsel Allen Parker who briefly served as interim chief executive of the scandal hit U S bank will step down next year The departure effective March 2020 comes at a time when Charles Scharf is beginning to put his own mark on the bank s leadership team Last week the fourth largest U S bank hired former JP Morgan Chase N JPM executive and previous White House official William Daley to head public affairs The appointment of Daley a former Bank of New York Mellon NYSE BK executive was an early sign that Scharf might bring in more of his long time lieutenants Parker who has focused on cleaning up existing issues and preventing them from spreading during his time at Wells had earlier signaled that he had no plans to leave and reiterated his desire to stay on when Scharf became CEO in late October As interim CEO Allen often spoke of the need for everyone at Wells Fargo to conduct our business with the highest levels of integrity Scharf told bank employees in a memo Parker joined Wells as general counsel in March 2017 served as interim CEO and president from March 2019 to October 2019 and then returned to the general counsel role In September the Wall Street bank named Scharf as its next leader after a wide ranging sales practices scandal claimed two CEOs Parker was thrust into the top position when former CEO Tim Sloan retired saying pressure from politicians and regulators had become a distraction in running the scandal plagued bank At one point some analysts and people within the bank believed Parker should take on the role permanently However regulators were keen on Wells Fargo appointing an outsider to clean up its operations with a fresh perspective Parker joined the bank as general counsel from law firm Cravath Swaine Moore where he was partner in charge of managing the firms operations Through his work at the firm defending high profile clients like former U S Secretary of State Henry Kissinger he also developed relationships in Washington that were helpful while navigating Wells Fargo s regulatory problems After becoming interim CEO Parker made one of his priorities settling regulatory probes from agencies including the U S Department of Justice
Wells Fargo said it would start a search for Parker s replacement immediately |
WFC | Brazil Intervenes Twice to Prop Up Real After Fall to Record | Bloomberg Brazil s central bank shocked traders by intervening in the foreign exchange market for the first time in three months selling dollars in two surprise auctions to prop up the real after it slumped to a record low
The currency pared losses after the second intervention and was down 0 3 on the day as of 4 p m in New York It had weakened as much as 1 2 to a record 4 2765 per dollar after the first auction failed to establish a floor for the currency which has dropped 9 this year The central bank didn t say how much it sold
Policy makers concern that a weak real could fuel price increases in a nation with a long history of out of control inflation may have been the driver for the moves which came just hours after officials had signaled they were comfortable allowing markets to set the exchange rate Pressure on consumer prices makes it more difficult for the central bank to cut borrowing costs to boost economic growth
Pretty ironic of the central bank to jump back in the market said Alvise Marino a currency strategist at Credit Suisse SIX CSGN in New York who has been bearish on the real since September He said authorities may have been driven to act by the severity of the recent drop rather than the specific level The real is down 5 5 this month
Economy Minister Paulo Guedes said Monday that a weaker real isn t a problem in line with comments last week by central bank chief Roberto Campos Neto Tuesday morning President Jair Bolsonaro said he d like a stronger real but signaled he would defer to his finance chief
Marino said while the intervention might provide some short term support the real has further room to weaken given the state of the economy and investors concern about regional stability The ongoing political turmoil in Latin America the lower carry trade appeal and the fact that the real is being used by investors as a hedge for long positions in equities and other local assets will keep pressuring the currency he said
There s some spillover from what s been going on in Chile and now Colombia said Brendan McKenna a currency strategist at Wells Fargo NYSE WFC in New York referring to widespread protests across the region
The real s recent slide has put a cap on predictions for more cuts to the benchmark Selic rate In December the central bank is expected to deliver its fourth straight reduction of 50 basis points which would lower borrowing costs to a fresh record of 4 5 Brazil s swap rate traders have trimmed bets on a February rate cut that would take the rate to 4
The new reality of low Brazil rates just three years ago the Selic stood at 14 has eroded the appeal of using the real for a carry trade in which investors borrow in dollars and invest the money in higher yielding currencies
Campos Neto has said that the weaker exchange rate has coincided with an improvement in Brazil s perceived risk which investors interpreted as a signal that there wasn t any plan to intervene to stop its slide
But intervention often works best when it s unexpected so policy makers may have seen value in keeping their plans secret And there s precedent from earlier this year for doing that
The last time Brazil intervened on Aug 27 it came minutes after Campos Neto said policy makers would only act when there is a liquidity gap There wasn t an obvious issue with liquidity today with the real s decline in line with the performance of other emerging market currencies
Updates chart and prices in second and fourth paragraphs |
XOM | US STOCKS Wall St falls on consumer confidence data oil | Consumer confidence drops vs expectations of gain
Falling crude prices sinks energy shares
Dow S P off 1 1 pct Nasdaq off 0 5 pct
Updates to late morning
By Edward Krudy
NEW YORK June 30 Reuters U S stocks fell on Tuesday
after U S consumer confidence data showed a surprise drop
raising doubts about the speed of an economic recovery and
falling oil prices sank energy shares
The Conference Board s U S consumer confidence index fell
in June versus expectations of an increase sparking investor
concern about how quickly consumers will resume spending
The confidence data underscored an economy still in trouble
and cast a shadow over earlier reports that suggested the
downward spiral may be moderating The stocks selloff was
broad hitting all of the S P s ten sectors
The consumer confidence data kind of took the wind out
of things a little bit said Kevin Kruszenski head of listed
trading at KeyBanc Capital Markets in Cleveland
Everybody is trying to connect the dots in terms of
positive economic data or at least data that is just in
decelerating decline This one kind of came out of left field
Crude oil futures fell 3 2 percent to below 7O per barrel
as a stronger U S dollar rose against a basket of currencies
Lower crude prices hit shares of energy companies such as
Chevron Corp down 1 7 percent to 65 76 and Exxon Mobil Corp
off 1 6 percent to 69 47
The Dow Jones industrial average fell 94 02 points or 1 10
percent at 8 435 36 The Standard Poor s 500 Index lost
10 18 points or 1 10 percent at 917 05 The Nasdaq Composite
Index dropped 8 59 points or 0 47 percent at 1 835 47
Still the S P 500 is up 14 9 percent so far this quarter
putting it on track for its best period since the fourth
quarter of 1998 when the index jumped nearly 21 percent
Separate reports showed U S single family home prices fell
in April but the pace of decline moderated and business
activity in the Midwest contracted again in June but at a less
severe rate
On this last day of the quarter fund managers are expected
to enhance portfolios as part of window dressing by selling
losing stocks and scooping up winners The process may add to
volatility
Analysts noted that a shortened trading week could also
lead to increased volatility as well as thinner volumes U S
markets will be shut for the U S Independence Day holiday on
Friday
The S P 500 has gained 35 6 percent since hitting a 12 year
closing low on March 9 as early signs of an economic rebound
surfaced |
WFC | Record Short VIX Positioning Reflects a Ton of Fear Elsewhere | Bloomberg Bearish bets on stock volatility are close to a record high raising investor concern that the market is ripe for turmoil There s a more benign explanation
Futures linked to the measure of S P 500 s implied volatility known as the fear gauge tend to move inversely to equities The net non commercial position long contracts outstanding less short positions sank to minus 187 948 last week its lowest level ever
If speculators are net short somebody else must be net long And some of the exchange traded products used by retail investors are reflecting exactly that Shares outstanding in three such offerings VXX UVXY and TVIX are all at record highs The iPath Series B S P 500 VIX short term futures ETN VXX is the second itinerant of this note and was launched in 2018
Retail builds up a big position and that s reflected in the term structure Speculators have the other side said Benn Eifert chief investment officer at QVR Advisors It s the wrong interpretation to say a big speculative VIX net short position necessarily means it s a good time to be long
Pravit Chintawongvanich equity derivatives strategist at Wells Fargo NYSE WFC added that the shape of the curve is often used as a guide for speculative positioning The steep contango which reflects higher uncertainty about the medium term outlook for volatility relative to the near term encourages increased exposure to a short vol trade
While the sheer size of shorts is elevated it s still below the 2019 peak and well off levels that prevailed before the Feb 5 volatility explosion This entails there s less that would need to be covered in the event of a meaningful market tumult
If there s a reason for caution regarding S P 500 options it s that they may be reflecting greed rather than complacency according to analysts One example is that a gauge of investors demand for options that offer protection against 10 downside versus 90 110 one month put call skew has crated since early October to near its lows of the year |
WFC | Canada s yield advantage seen underpinning loonie over coming year Reuters poll | By Fergal Smith
TORONTO Reuters The Canadian dollar this year s G10 pacesetter will edge higher over the coming 12 months supported by the solid performance of Canada s economy and its high yield relative to other major currencies a Reuters poll showed
The Oct 31 Nov 6 poll of more than 40 currency analysts showed they expect the loonie to dip slightly to 1 32 per U S dollar or 75 76 U S cents in three months but to then head higher
Strategists see the Canadian dollar climbing to 1 30 per U S dollar in 12 months stronger than the 1 3058 projection in October s survey
The Bank of Canada turned more cautious last week cutting its economic forecasts as it worried Canada s economy would be increasingly tested by trade uncertainty
But the central bank left its benchmark interest rate on hold at 1 75 last week persevering with an unchanged rate this year even as many of its peers have eased
The bank will wait until the first quarter of 2020 before easing a separate Reuters poll of economists showed last month
Last week s rate cut by the U S Federal Reserve the third since July has lowered the range for its policy rate to below the Bank of Canada s equivalent for the first time since December 2016
Meanwhile the European Central Bank the Swiss National Bank and the Bank of Japan have set policy rates that are zero or negative
Canada yields are close to or at a premium against most of the other G10 currencies now and we think that warrants a break lower in dollar Canada said Daniel Katzive head of FX strategy North America at BNP Paribas PA BNPP in New York We ll probably trade through 1 30 in the relatively near term so we re constructive on the loonie
Investors appear to agree They have raised bullish bets on the loonie to the highest level since December 2017 according to data from the U S Commodity Futures Trading Commission and Reuters calculations
Since the start of the year the Canadian dollar has climbed nearly 4 against the greenback the biggest advance among G10 currencies
Our forecast for CAD strength mainly reflects ongoing sturdiness in the Canadian economy and our outlook for broad U S dollar weakness over the next year or so said Erik Nelson a currency strategist at Wells Fargo NYSE WFC
Canada s economy has added jobs this year at a robust pace and the rate of inflation has stayed near the Bank of Canada s target of 2
If the global trade and manufacturing picture continues to improve that would likely disproportionately benefit the higher beta currencies such as CAD Nelson said
Optimism the United States and China would reach a trade deal has helped push global shares to a record high this month
The loonie is seen as sensitive to prospects for global growth because Canada is a major exporter of commodities including oil CLc1
The prospect of increased fiscal spending next year could also support the loonie if it were to boost the outlook for Canada s economy
Prime Minister Justin Trudeau has prioritized a tax cut for the middle class after his Liberal Party won a minority government in last month s federal election
Polling by Sujith Pai Nagamani Lingappa and Tushar Goenka Editing by Ross Finley and David Gregorio |
WFC | Why The Earnings Surprise Streak Could Continue For Wells Fargo WFC | If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report you should consider Wells Fargo WFC This company which is in the Zacks Banks Major Regional industry shows potential for another earnings beat
This biggest U S mortgage lender has seen a nice streak of beating earnings estimates especially when looking at the previous two reports The average surprise for the last two quarters was 11 59
For the most recent quarter Wells Fargo was expected to post earnings of 1 16 per share but it reported 1 30 per share instead representing a surprise of 12 07 For the previous quarter the consensus estimate was 1 08 per share while it actually produced 1 20 per share a surprise of 11 11
Price and EPS Surprise
With this earnings history in mind recent estimates have been moving higher for Wells Fargo In fact the Zacks Earnings ESP Expected Surprise Prediction for the company is positive which is a great sign of an earnings beat especially when you combine this metric with its nice Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Wells Fargo currently has an Earnings ESP of 5 79 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner We expect the company s next earnings report to be released on October 15 2019
When the Earnings ESP comes up negative investors should note that this will reduce the predictive power of the metric But a negative value is not indicative of a stock s earnings miss
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
WFC | Avoid These 3 Mutual Fund Misfires October 10 2019 | Does your current advisor have your money invested in these Mutual Fund Misfires of the Market that charge high fees for low returns If so it may be time for a new advisor
The easiest way to judge a mutual fund s quality over time is by analyzing its performance and fees Our Zacks Rank of over 19 000 mutual funds has identified some of the worst of the worst mutual funds you should avoid the funds with the highest fees and poorest long term performance
First let s break down some of the funds currently part of our Mutual Fund Misfires of the Market If you happen to have put your money into any of these misfires we ll help assess some of our best Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Hartford International Small Company R3 HNSRX Expense ratio 1 65 Management fee 0 9 After expenses the 5 year return is 0 3 meaning your fees are far higher than the fund s returns
Copeland Risk Managed Dividend Growth A CDGRX 1 45 expense ratio 1 CDGRX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset This fund has yearly returns of 1 28 over the most recent five years Another fund liable of having investors pay more in charges than what they receive in return
Wells Fargo NYSE WFC Absolute Return C WARCX 2 23 expense ratio 0 72 management fee This fund has yielded yearly returns of 0 42 in the course of the last five years Too bad
3 Top Ranked Mutual Funds
Since you ve seen the most noticeably lowest Zacks Ranked mutual funds how about we take a look at some of the top ranked mutual funds with the least fees
Janus Henderson Global Technology S JATSX is a fund that has an expense ratio of 1 23 and a management fee of 0 64 JATSX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach With yearly returns of 17 79 over the last five years this fund clearly wins
Fidelity Select Health Care Services FSHCX has an expense ratio of 0 76 and management fee of 0 54 FSHCX is part of the Sector Health category offering investors a focus on the healthcare industry one of the largest sectors in the American economy With annual returns of 11 83 over the last five years this is a well diversified fund with a long track record of success
City Natural Rochdale US Core Equity Income Service Class CNRVX has an expense ratio of 0 78 and management fee of 0 4 CNRVX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks With yearly returns of 11 22 over the last five years this fund is well diversified with a long reputation of salutary performance
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
WFC | 3 Mutual Fund Misfires To Avoid October 10 2019 | You may need to start looking for a new financial advisor if your current one has put any of these high fee low return Mutual Fund Misfires of the Market into your portfolio
High fees coupled with poor results It s a straightforward equation for an awful mutual fund Some are more regrettable than others and some are bad to the point that they have got a Strong Sell from our Zacks Rank the lowest positioning of the almost 19 000 mutual funds we rank every day
Below you ll read about some of the funds included in our current list of Mutual Fund Misfires of the Market And if by chance you re invested in any of these misfires we ll help and review some of our highest Zacks Ranked mutual funds
3 Mutual Fund Misfires
Now let s take a look at three market misfires
Copeland Risk Managed Dividend Growth C CDCRX 2 2 expense ratio and 1 management fee CDCRX is a Large Cap Blend fund targeting companies with market caps of over 10 billion These funds offer investors a stability and are perfect for people with a buy and hold mindset With a five year after costs return of 1 62 you re for the most part paying more in charges than returns
Wells Fargo NYSE WFC Absolute Return Admiral WARDX Expense ratio 1 4 Management fee 1 Over the last 5 years this fund has generated annual returns of 1 04
Hartford International Small Company R4 HNSSX 1 35 expense ratio 0 9 management fee HNSSX is a Non US Equity option focusing their investments acoss emerging and developed markets and can often extend across cap levels too HNSSX has generated annual returns of 0 01 over the last five years Ouch
3 Top Ranked Mutual Funds
Now that you ve seen the worst Zacks Ranked mutual funds let s have a look at some of the highest ranked funds with the lowest fees
Fidelity Select Software Company Services FSCSX is a fund that has an expense ratio of 0 74 and a management fee of 0 54 FSCSX is a Sector Tech mutual fund allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach With yearly returns of 18 59 over the last five years this fund clearly wins
City Natural Rochdale US Core Equity Income N CNRWX has an expense ratio of 1 03 and management fee of 0 4 CNRWX is a Large Cap Growth option these mutual funds purchase stakes in numerous large U S companies that are expected to develop and grow at a faster rate than other large cap stocks Thanks to yearly returns of 10 95 over the last five years CNRWX is an effectively diversified fund with a long reputation of solidly positive performance
Principal Capital Appreciation R4 PCAPX is an attractive fund with a five year annualized return of 10 1 and an expense ratio of just 0 87 PCAPX is part of the Large Cap Blend section and these mutual funds most often invest in firms with a market capitalization of 10 billion or more By investing in bigger companies these funds offer more stability and are often well suited for investors with a buy and hold mindset
Bottom Line
We hope that your investment advisor if you use one has you invested in one or all of the top ranked mutual funds we ve reviewed But if that is not the case and your advisor has you invested in any of the funds on our worst offender list it might be time to have a conversation or reconsider this vitally important relationship
If you have concerns or any doubts about your investment advisor read our just released report
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial FutureThis report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor Click here for free report |
XOM | US STOCKS Wall St slips on oil saving rate Nasdaq inches up | Higher savings rate raises consumer spending worries
Palm shares jump 16 percent says Pre demand strong
Dow off 0 6 pct S P off 0 4 pct Nasdaq up 0 1 pct
Updates to midday changes byline
By Rodrigo Campos
NEW YORK June 26 Reuters The Dow and the S P 500
fell on Friday as a jump in the savings rate raised worries
the economic recovery will not make much headway if consumers
stay frugal and a slide in crude futures prompted investors
to sell some energy shares
Data showed that while consumer spending and income both
rose in May as the government stimulus spread through the
economy much of the money was being socked away Savings
jumped to a record annual rate of 768 8 billion the highest
level since record keeping began in 1959
For the short run the growth in savings is not
encouraging said Peter Jankovskis co chief investment
officer at OakBrook Investments LLC in Lisle Illinois
Obviously for the long run it has been desired for
decades that Americans save more But in the midst of this
recovery and the stimulus packages that have been put forward
the hope would be to have them spending the money now he
added
Energy shares weighed as oil futures fell below 70 a
barrel after oil producer Nigeria said it would halt a battle
with rebels during a two month amnesty
The Dow Jones industrial average fell 47 92 points or
0 57 percent to 8 424 48 The Standard Poor s 500 Index
dropped 3 77 points or 0 41 percent to 916 49 The Nasdaq
Composite Index rose 2 22 points or 0 12 percent to
1 831 74
Nasdaq was up slightly helped partly by gains in Palm
Inc after it posted a narrower than expected loss Thursday
and said demand was strong for its new Pre smartphone Palm
shares jumped 16 percent to 16 28
Other smartphone makers shares also rose including Apple
Inc up 1 6 percent at 142 03 and Research In Motion Ltd up
2 3 percent at 70 88
Weighing down the Dow industrials were energy bellwethers
Chevron Corp down 1 3 percent at 66 01 and Exxon Mobil
Corp off 1 2 percent at 69 02
Analysts noted stocks were buffeted by profit taking after
Thursday s 2 percent gain as well as by end of quarter
window dressing This can add volatility as portfolio
managers sell stocks with big losses and buy some of the
quarter s best performing issues to help improve their
returns
The broad S P had rallied as much as 40 percent from
March s 12 1 2 year closing low but the run up has stalled as
initial optimism about a stabilizing economy was tempered by
worries the recovery could be tepid The index is up 35 5
percent from the March trough
Editing by Jan Paschal |
XOM | GLOBAL MARKETS Stocks gain on recovery hopes dollar up on China | Global stocks gain on better economic recovery sentiment
Oil rises nearly 2 after fresh Nigerian attacks
Dollar edges up on China s foreign reserve comments
U S euro zone bonds rise in continued auction relief
Updates with U S markets activity changes dateline
previous LONDON
By Herbert Lash
NEW YORK June 29 Reuters Global stocks rallied on
Monday lifted by better than expected sentiment in Europe in
June and renewed hopes of recovery while the U S dollar rose
after China ruled out any sudden change in its foreign reserve
policy
Oil prices topped 71 a barrel supported by rising equity
markets around the world and after fresh rebel attacks on oil
installations in Nigeria
Government debt on both sides of the Atlantic rose on
continued relief over the strong demand for the heavy doses of
recent new debt Benchmark yields on U S Treasuries slipped to
their lowest level in a month
Copper hit a two week high as confidence grew that the
global economy was healing while gold slid toward 935 as the
dollar gained on comments by Chinese officials at a meeting of
central bankers in Basel Switzerland over the weekend
China s policy governing its 1 95 trillion in foreign
reserves the bulk of which are U S Treasuries was stable
and consistent with no sudden changes the country s central
bank governor Zhou Xiaochuan said giving the dollar some
respite For details see ID nDEG003567
Today s tacit reaffirmation of the dollar standard is a
sign of Chinese acknowledgment that for the time being the
greenback remains the primary manner for settling global trade
accounts said Boris Schlossberg director of currency
research at GFT Forex in New York
The dollar had come under pressure recently as debate
intensified about the use of an alternative global currency to
the greenback with China s central bank renewing its call for
a super sovereign reserve currency last week
The rise in crude oil also bolstered energy shares on both
sides of the Atlantic with Exxon Mobil Corp gaining
1 9 percent Royal Dutch Shell up 1 8 percent and
Total adding 2 5 percent
Economic news also provided a boost to global equity
markets as euro zone economic sentiment improved more than
expected in June data showed ID nLT643111 while Japanese
industry output rose for the third month in a row
A surge in Shanghai stocks to a one year closing
high for the fourth straight session on signs of Chinese
economic recovery also bolstered investor sentiment
On a very short term basis the American investor is
taking comfort from international markets which have had
decent activity said Joseph Battipaglia market strategist at
Stifel Nicolaus in Yardley Pennsylvania
At 1 p m the Dow Jones industrial average was up
76 86 points or 0 91 percent at 8 515 25 The Standard
Poor s 500 Index was up 6 90 points or 0 75 percent at
925 80 The Nasdaq Composite Index was up 10 21 points
or 0 56 percent at 1 848 43
In Europe the pan European FTSEurofirst 300 index
of top shares closed up 1 8 percent at 859 63 points The index
fell nearly 2 percent last week
Bonds rallied through much of last week Yields fell after
three U S debt auctions totaling a record 104 billion of
notes saw above average demand Traders were relieved that the
global appetite for U S government debt did not wane in the
face of a deluge of supply
The benchmark 10 year U S Treasury note was up
10 32 in price to yield 3 49 percent The 2 year U S Treasury
note was break even in price to yield 1 10 percent
The dollar rose against a basket of major currencies with
the U S Dollar Index up 0 04 percent at 79 906
The euro rose 0 17 percent to 1 4075 while against
the yen the dollar was up 0 72 percent at 95 91
U S light sweet crude oil rose 1 81 to 70 97 a
barrel
Spot gold prices rose 1 00 to 939 55 an ounce
Worries over a slowdown in Chinese imports of copper put a
lid on gains Copper for three months delivery on the
London Metal Exchange traded at 5 160 from 5 035 on Friday
Asian stock markets retreated as weaker oil prices hit
energy shares The MSCI index of Asia Pacific shares outside
Japan slipped 0 7 percent in light trade while
Japan s Nikkei average shed 1 percent
Reporting by Edward McAllister Vivianne Rodrigues Chris
Reese in New York Emelia Sithole Matarise Jon Hopkins
Rebekah Curtis and Maytaal Angel in London writing by Herbert
Lash Editing by Chizu Nomiyama |
WFC | U S China trade reprieve makes no dent on recession chances Reuters poll | By Shrutee Sarkar
BENGALURU Reuters The recent truce in the U S China trade war is not an economic turning point and has done nothing to reduce a significant risk that the United States could slip into recession in the next two years a Reuters poll of economists found
Collateral damage from the trade conflict between the world s two largest economies has hit financial markets and forced most major central banks to cut interest rates this year
The Oct 18 23 Reuters poll of more than 100 economists found growth and inflation views for the coming year and beyond barely changed despite a White House announcement about a phase 1 deal with China and suspension of tariffs scheduled to kick in this month
U S China trade negotiations over the past 18 months have been a classic case of one step forward several steps back Despite recent encouraging noise on trade talks there are more tariffs in place than three months ago noted Ajay Rajadhyaksha head of macro research at Barclays LON BARC in New York
Our forecasts suggest that below trend U S growth will persist for much of 2020 We still feel that the U S and the world economy will avoid recession in the coming months but the U S will not be a global locomotive as it was in 2018
The median probability of a U S recession in the next 12 months rose to 35 from 30 predicted a month ago the highest percentage in this economic expansion For the next two years it held at a high 45
In response to an additional question 75 of economists said the recent trade development between Washington and Beijing was not a turning point in easing uncertainty
That conclusion was evident in the consensus for U S economic growth which is expected to slow to 1 6 1 7 on an annualized basis each quarter between now and end 2020 down from 2 0 last reported
The range of growth forecasts for the second half of this year showed lower highs and lower lows underscoring fears the U S economy is still losing momentum after a short sugar rush from aggressive tax cuts passed in late 2017
A majority of economists 27 of 45 also said U S China trade relations would stay about the same between now and the end of next year The others were evenly split between it getting better or worse
Encouraging but we are mindful a successful resolution is still a long way away and the negotiations will continue to ebb and flow over the coming year said Sam Bullard senior economist at Wells Fargo NYSE WFC referring to the latest U S China trade developments
Even with record low unemployment the Federal Reserve was expected to cut rates at its Oct 29 30 meeting its third cut this year
The Fed s preferred gauge of inflation the core personal consumption expenditure PCE price index was expected to touch its target of 2 early next year and stay around that rate through end 2020 at least
After lowering interest rates in July and September the central bank was expected to cut again by 25 basis points next week taking the fed funds rate to 1 50 1 75
Another cut is forecast for early next year taking the rate to 1 25 1 50 with no more changes expected for the rest of 2020
Those forecasts are in line with interest rate futures market pricing
In addition to rate cuts a few economists expect some form of fiscal stimulus next year
A likely third Fed rate cut in October and some modest fiscal support next year won t prevent the U S economy from slowing further though the stimulus should offset growing friction from trade protectionism to extend the record long expansion said Sal Guatieri senior economist at BMO Capital Markets
Analysis and additional reporting by Indradip Ghosh Polling by Vivek Mishra and Hari Kishan Editing by Ross Finley and David Gregorio |
WFC | Exclusive Wells Fargo lays off more than 200 business bankers in U S sources | By Imani Moise and P J Huffstutter Reuters Wells Fargo Co N WFC has laid off more than 200 bankers in its U S lending divisions in recent months as the bank reacted to business trends and restructured some units sources familiar with the matter said this week Most of the cuts were in Wells Fargo s commercial bank and many impacted its team that gives loans to farmers The bank has also made cuts to its energy lending group Energy and agriculture are two portfolios in which the company is traditionally strong The fourth largest U S lender by assets cut the unit that specializes in agricultural lending by at least 25 according to four sources with direct knowledge of the matter Representatives for Wells Fargo confirmed the cuts but did not elaborate on how many agricultural bankers were laid off Over the summer 22 bankers were axed from its energy team according to two other sources The cuts represented about 7 of the energy group a spokeswoman said The energy lending team sits within the investment bank and the agriculture group is part of commercial banking The company has about 6 000 commercial bankers in the United States Many of the agriculture cuts were concentrated in rural areas one source told Reuters including North Dakota and South Dakota where staff was cut in half Wells Fargo plans to create a smaller group of agricultural bankers in one of its new centralized hubs who will work with customers the person said While the move marks Wells Fargo s latest bid to centralize operations and shed risk the move comes as a blow to energy companies and increasingly cash strapped farmers With fewer bankers on hand in local markets some small companies and family farmers will likely need to find a new lender said three sources familiar with the businesses The staffing cuts are particularly ill timed for the bank s soybean corn and grain farm customers who are looking to renew loans to finance their spring planting operations Wells Fargo is the biggest bank lender to the U S agriculture sector according to the American Bankers Association An Wells Fargo executive told Reuters the bank intends to retain that position and there has been no strategic move to reduce exposure The moves were made because the commercial bank wants to align resources to better serve clients who do more business with the bank The bank is currently hiring agricultural bankers in markets like California Wyoming and Idaho a bank spokeswoman said After the hires the total reduction to the team will be 5 SCALING BACK Federal data analyzed by Reuters shows Wells Fargo is following other large U S banks in scaling back exposure to farmers The bank s Federal Deposit Insurance Corporation FDIC insured units have pared 1 24 billion or 15 3 of their farm loan holdings between the end of December 2016 and June 30 of this year according to the most recent data from the regulator Wells Fargo has also been traditionally regarded as one of the most active lenders to the U S oil and gas sector But its energy team was still recovering from hefty losses it booked in 2016 when crude prices plunged to 26 a barrel and forced a number of bankruptcies in the sector The unit created a separate credit resolution group to try to work with customers to stem the losses Since then the bank has disbanded its Energy Capital Group and put less emphasis on lending two of the sources said Another Wells Fargo spokeswoman Hannah Sloane said the bank remains committed to the sector and has expanded the business over the past three years We regularly review and evaluate the needs of our clients and the dynamics in the markets we serve in order to ensure we align our resources accordingly she said Wells Fargo has been working to centralize operations to improve risk controls since 2016 when a wide ranging sales practices scandal erupted and placed the bank under a regulatory microscope The Federal Reserve has prevented the bank from increasing its balance sheet until it believes it has made significant changes to its risk management and compliance structures
Revenue in Wells Fargo s wholesale bank which houses the merged banking unit has fallen every year since the scandal and fell another 2 during the first six months of 2019 The unit has had some trouble attracting new business in the wake of the scandal Reuters has reported |
WFC | Trump Xi Trade Deal Hits Hurdle After APEC Canceled | Bloomberg Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars Sign up here
President Donald Trump s plan to ink the first installment of a trade accord with Xi Jinping next month was thrown into question Wednesday after Chile canceled an upcoming summit where the two leaders had planned to meet
The cancellation announced earlier Wednesday by Chile as social unrest continued to rock Santiago appeared to catch the White House off guard But the administration insisted that it would continue to press to finalize the phase one agreement in coming weeks
It wasn t clear whether American officials would be able to find an alternate venue for a meeting with Xi Organizers of the Asia Pacific Economic Cooperation summit indicated they had no plans to hold the event elsewhere Negotiators from both sides will have a phone call on Friday Xinhua reported Thursday
Other Locations
Three people familiar with the state of U S China discussions said the teams have been looking at other locations in recent weeks as demonstrations that caused the cancellation of the APEC summit escalated in Chile
We look forward to finalizing Phase One of the historic trade deal with China within the same time frame and when we have an announcement we ll let you know White House spokesman Hogan Gidley said in an email
The Chinese Embassy in Washington did not immediately respond to a request for comment Robert Lighthizer the U S trade representative leading the talks with China said no comment when asked by reporters Wednesday how the cancellation would change plans
The prospect of a Trump Xi meeting in Santiago next month had buoyed markets as investors looked for signs that an end to the multi year trade war between the two nations is in sight The S P 500 Index of U S stocks briefly fell to a session low after news of the meeting s cancellation
Phase One
I always looked at Chile as just the location where Trump and Xi would just happen to be at the same time said Brendan McKenna a currency strategist at Wells Fargo NYSE WFC Securities in New York If there is deal in place that both sides are willing to sign I think they find a new way to finalize it anyway
U S and Chinese officials have been working for weeks on filling in the details of a narrow phase one deal announced by Trump after an Oct 11 Oval Office meeting with China s top negotiator Liu He
Both sides have recently said they re making significant progress on a deal that would see China resume purchases of U S farm products and make commitments on intellectual property and currency in exchange for a commitment from Trump not to impose further tariffs on Chinese goods But wrapping up even that limited work by the Nov 16 17 summit in Chile had always been seen as a challenge
While it is a new hurdle for both the Trump administration and China the forced delay of the meeting between the leaders gives negotiators more time But a shifting deadline could also reduce pressure on both sides to cut an initial deal and move on to more comprehensive talks
If the two sides intend to conclude a phase one deal the cancellation of the summit is a mere logistical headache not one that can spike the deal on its own said Jude Blanchette a China expert at the Center for Strategic and International Studies If however one or both sides don t feel they can get to a deal by mid November the cancellation of the summit is a great excuse to buy more time
Uncertainty Looms
The risk for businesses and financial markets is that the cancellation of the APEC meeting will only extend uncertainty that has put a damper on investment and growth around the world That may be driving Trump s eagerness to sign the deal himself and prove to a skeptical world and voters in the U S that his disruptive tariffs have yielded results entering his re election campaign
This makes it likely that lower level talks will continue to drag on with no concrete results said Edward Alden a senior fellow at the Council on Foreign Relations
The U S government would normally help Chile resolve its political crisis so the summit could proceed Alden said But instead the White House is absent with the impeachment fight and crises of its own making he said
Trump has said repeatedly that he was optimistic the trade deal would be finalized at the summit
The risk here is that if the summit now is postponed then that at least suggests that the trade war uncertainty might be hanging over us for longer Torsten Slok chief economist at Deutsche Bank AG DE DBKGn said in an interview on Bloomberg Television Wednesday It raises the risk that we could never see a phase two or phase three and therefore the uncertainty would basically not be going away
Corrects day of Xinhua statement in third paragraph |
WFC | Wells Fargo WFC Stock Moves 1 18 What You Should Know | In the latest trading session Wells Fargo WFC closed at 48 48 marking a 1 18 move from the previous day This change was narrower than the S P 500 s 1 79 loss on the day At the same time the Dow lost 1 86 and the tech heavy Nasdaq lost 1 56
Coming into today shares of the biggest U S mortgage lender had gained 6 44 in the past month In that same time the Finance sector gained 2 11 while the S P 500 gained 0 72
Investors will be hoping for strength from WFC as it approaches its next earnings release which is expected to be October 15 2019 The company is expected to report EPS of 1 18 up 4 42 from the prior year quarter Meanwhile the Zacks Consensus Estimate for revenue is projecting net sales of 20 73 billion down 5 53 from the year ago period
Looking at the full year our Zacks Consensus Estimates suggest analysts are expecting earnings of 4 77 per share and revenue of 83 49 billion These totals would mark changes of 11 45 and 3 38 respectively from last year
It is also important to note the recent changes to analyst estimates for WFC Recent revisions tend to reflect the latest near term business trends With this in mind we can consider positive estimate revisions a sign of optimism about the company s business outlook
Research indicates that these estimate revisions are directly correlated with near term share price momentum Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
The Zacks Rank system which ranges from 1 Strong Buy to 5 Strong Sell has an impressive outside audited track record of outperformance with 1 stocks generating an average annual return of 25 since 1988 Within the past 30 days our consensus EPS projection has moved 0 44 lower WFC is currently a Zacks Rank 3 Hold
Investors should also note WFC s current valuation metrics including its Forward P E ratio of 10 28 This valuation marks a discount compared to its industry s average Forward P E of 11 09
Investors should also note that WFC has a PEG ratio of 0 96 right now This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate WFC s industry had an average PEG ratio of 1 38 as of yesterday s close
The Banks Major Regional industry is part of the Finance sector This industry currently has a Zacks Industry Rank of 185 which puts it in the bottom 28 of all 250 industries
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
To follow WFC in the coming trading sessions be sure to utilize Zacks com |
WFC | Wells Fargo WFC Reports Next Week Wall Street Expects Earnings Growth | Wells Fargo WFC is expected to deliver a year over year increase in earnings on lower revenues when it reports results for the quarter ended September 2019 This widely known consensus outlook gives a good sense of the company s earnings picture but how the actual results compare to these estimates is a powerful factor that could impact its near term stock price
The earnings report which is expected to be released on October 15 2019 might help the stock move higher if these key numbers are better than expectations On the other hand if they miss the stock may move lower
While management s discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations it s worth having a handicapping insight into the odds of a positive EPS surprise
Zacks Consensus Estimate
This biggest U S mortgage lender is expected to post quarterly earnings of 1 19 per share in its upcoming report which represents a year over year change of 5 3
Revenues are expected to be 20 84 billion down 5 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 2 69 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Wells Fargo
For Wells Fargo the Most Accurate Estimate is lower than the Zacks Consensus Estimate suggesting that analysts have recently become bearish on the company s earnings prospects This has resulted in an Earnings ESP of 0 02
On the other hand the stock currently carries a Zacks Rank of 3
So this combination makes it difficult to conclusively predict that Wells Fargo will beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Wells Fargo would post earnings of 1 16 per share when it actually produced earnings of 1 30 delivering a surprise of 12 07
Over the last four quarters the company has beaten consensus EPS estimates three times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Wells Fargo doesn t appear a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
WFC | Credit Suisse CS Plans A Comeback In U S Private Banking | Credit Suisse SIX CSGN Group NYSE CS is mulling a comeback in U S wealth management business after an exile of almost four years The news was reported by Bloomberg While the talks are still in early stage the move is expected to bolster its private banking segment
Per the article the company is targeting Miami as the new base and seeks to add 15 billion of assets under management The unit will address needs of wealthy Latin Americans
In 2015 Credit Suisse had divested its U S brokerage to Wells Fargo NYSE WFC after it was hit by a penalty on client tax evasion
Negative interest rates competitive markets elevated pressure on margins and transforming customer needs together with other factors have led Credit Suisse to expand into other regions
The United States is considered to be one of the biggest wealth centers globally Relatively higher interest rates and favorable regulatory environment support growth in wealth management business Credit Suisse s international wealth management business is focused on Latin America Europe the Middle East and Africa
Credit Suisse is also restructuring in order to improve its prospects Spending hundreds of millions of Swiss francs the bank plans to transition the retail and commercial clients to a newly formed direct banking unit
Per the plan the new direct banking unit will be catering 1 million retail clients 60 000 commercial clients and 500 employees The leader of IT and operations unit of Swiss Universal Bank will lead this unit
Improved telephone customer service along with a greater number of working hours and employees will follow the digital transformation differentiating Credit Suisse from other big banks Notably the bank will divulge further details in the first half of 2020
Shares of Credit Suisse have gained around 5 year to date on the NYSE against the s decline of 0 7
Currently Credit Suisse carries a Zacks Rank 3 Hold You can see
Stocks to Consider
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XOM | ANALYSIS Verenex spat shows risk of doing business in Libya | Dispute highlights fears of contract revisions
Big oil players watch outcome of saga
Canadian government concerned
By Tom Pfeiffer
RABAT June 23 Reuters A deepening confrontation between
Libya and Canadian oil explorer Verenex is shedding light on the
risk of doing business in the north African country as it
emerges from years of sanctions
Investors will be watching the outcome of the dispute which
began after Libya said it would buy Verenex blocking a rival
bid from China National Petroleum Corp CNPC
Libya is now investigating allegations that Verenex was
improperly qualified to bid for stakes in Libya s oilfields in
2005 according to a letter received by Verenex The company
says the allegation was without merit
A senior official at Libya s National Oil Corporation NOC
was not available for comment on Tuesday
Verenex is only a small player in Libya alongside
super majors like BP Plc and Exxon Mobil and a bevy of foreign
state oil firms all keen for a slice of Africa s biggest proven
oil reserves
But it is the only one to have made big finds in acreage
opened up by licence tenders since the end of sanctions
Companies always worry that in the event of a significant
discovery governments will seek to revise their contract terms
to capture more revenues said Ben Cahill North Africa analyst
at industry consultants PFC Energy Oil companies will be
concerned that this pattern could be repeated
Libya is aiming to boost oil production to 3 million barrels
a day by 2012 from 2 million this year and sees a doubling of
gas production by 2012 or 2013 from the current rate of 3 5
billion cubic feet 99 1 million cubic metres per day
Foreign oil firms accepted some of the industry s smallest
production shares when they bid for acreage in Libya
Analysts said establishment conservatives there may be
lobbying to ensure Libya gets more from Verenex s success by
buying the company for less than the value of its assets
Verenex sank 177 million into Libya and the price put on
those assets today implies the company will have doubled its
money said Richmond Energy Partners analyst Keith Myers
Maybe the Libyans think that is too much said Myers
It s the normal course of business to extract as much benefit
from a transaction as possible What s different this time is
that it s being made public
He questioned whether other oil companies might pull out of
Libya given that they would pay big contract cancellation
penalties and would have to write off their Libyan investments
Libya remains one of the few places you can explore for big
reserves said Myers The geology hasn t changed and neither
have the politics which were always challenging and remain so
He said the Verenex spat could put off some smaller
companies thinking about entering Libya
Many firms that won exploration rights in the Libyan bid
rounds have yet to finalize their contracts or have development
plans approved
The Verenex story raises an additional above ground risk
for them that NOC will continue to intervene in commercial
transactions said Cahill
APPROVAL BONUS
The delay to the sale of Verenex is a blow for a company
whose expertise lies in finding crude and selling the field not
producing and selling the oil Verenex shares tumbled on the
Toronto Stock Exchange on Monday
The company said NOC had asked for a C 46 7 million bonus in
exchange for its approval of the Verenex sale but the approval
had still not come
Verenex said it thought Libya s General People s Committee
was looking to have the bonus raised or the potential sale price
cut
The company said it was reassessing its operations and
expenditure in Libya because of the delays and had enough cash
to fund its business for the next few months
Canada s government has expressed concerns to the government
of Libya and said it planned to press Tripoli for a response
Verenex is considering arbitration or other legal remedies
The NOC s claim that Verenex wasn t properly qualified to
bid in a licensing round held nearly four years ago seems
suspect to say the least said Cahill The Libyan
government s actions send an important signal to investors on
the core issue of contract sanctity |
XOM | Oil rises above 70 on Nigeria attacks econ hopes | Supply disruption from Nigerian unrest boosts prices
Optimism over easing global recession buoys equity
markets
Tensions in Iran still a factor to watch
By Jennifer Tan
SINGAPORE June 26 Reuters Oil surged above 70 a
barrel on Friday extending a 2 percent gain the day before
after rebel attacks on Nigerian oil facilities disrupted supply
and equity markets rallied on optimism the global recession was
ebbing
The release of the June consumer sentiment index by the
Reuters University of Michigan Surveys of Consumers later is
expected to reflect a mildly improving outlook for the U S
economy auguring well for ailing world energy demand
U S crude futures for August gained 36 cents to 70 59 a
barrel by 0333 GMT off a morning high of 70 77 and after
settling at 70 23 in the previous session London Brent crude
rose 28 cents to 70 06
Oil is on course for a 1 5 percent gain this week buoyed
by optimism over a potential economic recovery that has lifted
prices from below 40 over the past three months
Worry over the geopolitical situation is a big factor
right now and that s what s giving the market traction said
Peter McGuire managing director of Commodity Warrants
Australia referring to the situation in Iran
We had a correction earlier in the week and the
technicals still look a little bearish but you can t rule out
the fundamentals and you can t rule out the geopolitical
About 20 people have been killed in protests after Iran s
June 12 presidential election the worst unrest since the 1979
Islamic revolution
Investors are also keeping their eyes peeled on Nigeria
where President Umaru Yar Adua on Thursday offered amnesty to
gunmen in the Niger Delta who lay down their weapons by Oct 4
a bid to end unrest which has cost Africa s top oil exporter
billions of dollars in lost revenue
The main militant group the Movement for the Emancipation
of the Niger Delta MEND sabotaged a Royal Dutch Shell oil
pipeline on Thursday the latest act in a month old campaign
which has shut in at least 133 000 barrels per day The attack
helped push oil to near 71 a barrel
Fuelling oil s rise Exxon Mobil said its huge Baytown
refinery suffered an operational glitch that triggered flaring
sparking worries the largest U S oil refinery could tighten
gasoline stockpiles during this summer s peak demand driving
season
Firmer Asian stocks on the back of Wall Street s rally also
lent support to oil with shares outside Japan climbing 1
percent and Japan s Nikkei up 0 2 percent
A further boost came from a fall in the dollar against most
major currencies on Friday extending losses the previous day
as investors shifted funds back into risky assets after the
Federal Reserve this week appeared to confirm it would keep
interest rates low for a while
The Reuters University of Michigan final June consumer
sentiment index due at 1355 GMT is expected to show a reading
of 69 0 compared with 68 7 in the May report a Reuters poll of
economists showed
Editing by Ben Tan |
WFC | Wells Fargo Must Offer 66 Jobs to People It Rejected in 2014 | Bloomberg Wells Fargo NYSE WFC Co must offer 66 jobs to female and African American applicants it rejected five years ago after the U S Department of Labor found the bank discriminated against them
The company in 2014 discriminated against more than 2 300 candidates to be online customer service representatives and phone bankers in three U S cities the Labor Department said in a statement Thursday Wells Fargo must pay about 600 000 in back wages benefits and interest to individuals and offer jobs to original applicants as they open up
The agency s statement didn t detail the hiring issues and the bank didn t admit liability Wells Fargo agreed to revise its selection process and train hiring managers to eliminate the discriminatory practices
While Wells Fargo strongly disputes the allegations we believe that putting this matter behind us is in the best interest of all of our stakeholders Wells Fargo spokesman Peter Gilchrist said in a statement He said the settlement relates to practices in place five years ago that the firm has since changed Wells Fargo values and promotes diversity and inclusion in every aspect of our business
Wells Fargo last month selected a new chief executive officer as part of its efforts to move past years of scandals that have eroded its brand and heaped on legal costs Charlie Scharf starts in the top job on Monday
Updates with company statement in fourth paragraph |
WFC | Wells Fargo Co Earnings Miss Revenue Beats In Q3 | Investing com Wells Fargo Co NYSE WFC reported third quarter earnings that missed analysts expectations on Tuesday and revenue that topped forecasts
The firm reported earnings per share of 1 07 on revenue of 22 01B Analysts polled by Investing com forecast EPS of 1 22 on revenue of 21 03B That compared to EPS of 1 13 on revenue of 21 94B in the same period a year earlier The company had reported EPS of 1 3 on revenue of 21 58B in the previous quarter
Wells Fargo Co shares lost 1 06 to trade at 48 75 in pre market trade following the report
Wells Fargo Co follows other major Financial sector earnings this monthOn Tuesday JPMorgan reported third quarter EPS of 2 68 on revenue of 30 06B compared to forecasts of EPS of 2 45 on revenue of 28 46B
UnitedHealth earnings beat analysts expectations on Tuesday with third quarter EPS of 3 88 on revenue of 60 35B Investing com analysts expected EPS of 3 75 on revenue of 59 75B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
WFC | Wells Fargo quarterly profit slumps 26 on legal costs | Reuters Wells Fargo Co N WFC reported a 26 fall in quarterly profit on Tuesday as the lender braced for additional legal expenses tied to a sales practices scandal that erupted more than three years ago
Net income applicable to common stock fell to 4 04 billion or 92 cents per share in the third quarter ended Sept 30 from 5 45 billion or 1 13 per share a year earlier
Analysts had expected a profit of 1 15 per share according to IBES data from Refinitiv but it was not immediately clear if the numbers were comparable
The San Francisco based lender last month appointed Charles Scharf a one time Jamie Dimon prot g known on Wall Street as a detail oriented number cruncher who excels in streamlining operations as its new top boss |
WFC | StockBeat Wells Fargo Higher as Management Touts Improved Net Interest Income | Investing com Wells Fargo NYSE WFC posted third quarter earnings that fell short of expectations but sentiment on the bank received a boost after management in a post earnings call delivered a more somber outlook on net interest income
In its post earnings call Wells Fargo guided net interest income growth to mid to single digits in 2020 compared with a 6 drop this year That offset some of the gloom that had followed the bank s mixed results Wells Fargo NYSE WFC rose nearly 4 early in the day and was up 2 8 at 2 08 p m ET 18 08 GMT
The bank reported earnings of 92 cents a share on revenue of 22 01 billion with lower than expected net interest income a key driver of the bank s profits coming under pressure as the banking company s net interest margin dropped to 2 66 from 2 94 in the quarter from a year earlier In the 2018 third quarter Wells Fargo NYSE WFC earned 1 13 a share on revenue of 21 84 billion
The mixed earnings comes as the bank continued to fork out legal payments after it let employees create millions of fake bank accounts to meet sales quotas
The company booked a 1 6 billion charge for legal costs related to its long running sales practices problems It also had a 1 1 billion gain related to the sale of a business
Wells Fargo NYSE WFC has an average price target of 49 31 a bit lower than the current price according to consensus estimates from Investing com The shares are up about 10 this year |
WFC | Wells Fargo WFC Stock Moves 0 63 What You Should Know | Wells Fargo WFC closed the most recent trading day at 48 65 moving 0 63 from the previous trading session This move was narrower than the S P 500 s daily loss of 0 84 Meanwhile the Dow lost 0 53 and the Nasdaq a tech heavy index lost 1 47
Coming into today shares of the biggest U S mortgage lender had gained 8 85 in the past month In that same time the Finance sector gained 6 7 while the S P 500 gained 5 2
Investors will be hoping for strength from WFC as it approaches its next earnings release In that report analysts expect WFC to post earnings of 1 18 per share This would mark year over year growth of 4 42 Our most recent consensus estimate is calling for quarterly revenue of 20 73 billion down 5 53 from the year ago period
For the full year our Zacks Consensus Estimates are projecting earnings of 4 78 per share and revenue of 83 39 billion which would represent changes of 11 68 and 3 5 respectively from the prior year
Any recent changes to analyst estimates for WFC should also be noted by investors These revisions help to show the ever changing nature of near term business trends As such positive estimate revisions reflect analyst optimism about the company s business and profitability
Research indicates that these estimate revisions are directly correlated with near term share price momentum To benefit from this we have developed the Zacks Rank a proprietary model which takes these estimate changes into account and provides an actionable rating system
Ranging from 1 Strong Buy to 5 Strong Sell the Zacks Rank system has a proven outside audited track record of outperformance with 1 stocks returning an average of 25 annually since 1988 Within the past 30 days our consensus EPS projection has moved 0 39 lower WFC is holding a Zacks Rank of 3 Hold right now
In terms of valuation WFC is currently trading at a Forward P E ratio of 10 25 This valuation marks a discount compared to its industry s average Forward P E of 11 47
We can also see that WFC currently has a PEG ratio of 0 96 The PEG ratio is similar to the widely used P E ratio but this metric also takes the company s expected earnings growth rate into account Banks Major Regional stocks are on average holding a PEG ratio of 1 43 based on yesterday s closing prices
The Banks Major Regional industry is part of the Finance sector This industry currently has a Zacks Industry Rank of 190 which puts it in the bottom 26 of all 250 industries
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
To follow WFC in the coming trading sessions be sure to utilize Zacks com |
XOM | ANALYSIS Higher prices put brake on commodity supply curbs | Higher prices falling costs deter more output cuts
High inventories could undermine some price rallies
OPEC not expected to change output targets
By Karen Norton and Barbara Lewis
LONDON May 20 Reuters Production cuts and project
delays have started to slow across a range of commodities as
prices began to rally but over supply could still be a major
issue for some metals
Many producers were quick to reduce output in response to
the deepest recession since the 1930s
Producers of oil which differs from other commodities in
that it is dominated by OPEC and some industrial metals were
among the first to react
But aluminium and nickel markets are still pressured by huge
supply surpluses and analysts have said their rally from lows in
recent months could be fragile
We need a demand led reversal of cuts rather than a
price led one said Stephen Briggs a metals analyst at RBS
Global Banking Markets
Prices are looking too far ahead
Commodities have been rising since early this year
supported by an unusually close correlation with equities
markets which are factoring in a return to economic growth that
should fuel demand for raw materials
The optimism is not necessarily based on evidence
From a record of nearly 150 a barrel hit last year oil
prices collapsed to 32 40 in December They have since rallied
and on Wednesday hit a six month high above 62
The benchmark London Metal Exchange LME contract copper
rose by 60 percent from end 2008 to 4 925 a tonne by mid April
driven by substantial Chinese buying But it remains far below
the July 2008 peak of 8 940
LME copper stocks are down almost 40 percent from February
levels mainly due to Chinese stockpiling but also because of
recurrent unplanned supply disruptions
Zinc producers were unusually among the first to react to
plummeting demand and cuts of over 1 0 million tonnes are deemed
sufficient to prevent a huge build up in inventories
But aluminium stocks are at record high levels of over 4 0
million tonnes with no signs of that trend slowing and nickel
stocks are around 14 year highs
Aluminium producers need to cut more but cutbacks are
already slowing and will slow down even more said Andrey
Kryuchenkov commodities analyst at VTB Capital
Restarts of idled aluminium capacity in China spurred by
government and provincial stockpiling have increased the
surplus
World nickel output may need to be cut by almost one third
some analysts say compared with reductions so far of around
one fifth
For evidence of the slower rate of cuts please see factbox
Mines and plants hit by low prices high costs
NO MORE OIL CUTS
The oil rally has drawn support from record supply cuts from
the Organization of the Petroleum Exporting Countries which
said it would reduce output by around 4 2 million barrels per
day compared with production last September
At its most disciplined OPEC delivered more than 80 percent
of the promised reduction analysts said but some estimates
have shown compliance has begun to fall
The group next meets on May 28 in Vienna and is widely
expected to leave current supply curbs in place
Inventory levels are still close to their highest for 19
years in the biggest energy consumer the United States but
demand there has begun to increase in the run up to the driving
season that begins later this month
In addition to the OPEC supply cuts international oil
companies have delayed some of their most expensive projects
The International Energy Agency which represents the
interest of consumer countries has repeatedly said lower oil
prices have had a major impact on investment in new production
which could lead to very strong price rallies in the future
But major oil companies led by the biggest Exxon Mobil
have said they will carry on investing through the downturn and
falling production costs have meant that reduced capital
expenditure will not necessarily mean less exploration
Some also predict the industry could be moving towards fresh
investment now oil prices are rising
While capex was expected to fall sharply at the beginning
of the year with 40 oil with prices above 55 tax reform in
place and costs falling it would seem more likely that spending
will start to increase said Lawrence Eagles of JPMorgan
He also said he had yet to see the evidence any reduction in
expenditure had been as drastic as predicted by some
For the mining sector the reduction in spending is deep
Analysts said that could support some metals prices such as
copper and zinc in the next two to three years
Stockholm based industry consultants Raw Materials Group
RMG predicted exploration spending in 2009 would more than
halve to about 6 billion from almost 14 billion last year
With the downturn in exploration this year it means
there ll be a lack of new projects further ahead said RMG s
Magnus Ericsson
For a factbox on commodities cuts click on
Karen Norton edited by Peter Blackburn |
WFC | Lira Slumps as Trump Warns Turkey Over Military Operation | Bloomberg The Turkish lira slumped by the most since August after U S President Donald Trump warned the nation against acting in excess in a military operation targeting Kurdish forces in Syria
The lira weakened 2 to a session low of 5 82 against the dollar after Trump warned Ankara in a tweet that he would totally destroy and obliterate the nation s economy if takes unspecified off limits actions
Whether the Turkish lira will really be impacted by U S threats will depend on a possible response by President Recep Tayyip Erdogan and whether he moves forward with an invasion into Syria said Brendan McKenna a currency strategist at Wells Fargo NYSE WFC Securities in New York
You would think new military operations in Syria could draw sanctions from the U S and the type of sanctions would also have an impact he said If rhetoric escalates probably see a move through 6 00 USD pretty quickly
The lira may face further downside from the risk of of sanctions tied to Russian military equipment tied to sanctions linked to Syria McKenna said
A White House statement late Sunday said the U S wouldn t stand in the way of an attack American backed Kurdish forces in northern Syria and had fueled speculation that a face off between the allies could be averted
Investors have been bracing for a Turkish occupation of a strip of northern Syria for months but the risk of another flare up between the estranged NATO allies risks derailing the recovery in the lira A diplomatic fallout between Washington and Ankara last year triggered a currency crisis that dragged the nation into its first recession in a decade
Updates with lira move in second paragraph strategist comments in third fifth paragraphs |
WFC | Exclusive Wells Fargo beefs up mortgage division to cope with higher volumes | By Imani Moise
Reuters Wells Fargo Co N WFC is boosting its teams that process mortgage loans to prepare for higher mortgage volumes changing course after it laid off about 1 000 employees in the division in 2018 according to a memo viewed by Reuters
Many of the hires will be in Des Moines Iowa and Minneapolis according to the memo Yet Wells Fargo the largest U S mortgage originator according to Inside Mortgage Finance laid off hundreds of mortgage employees in these cities just last year
Representatives from Wells Fargo did not immediately respond to requests for comment It was not immediately clear how many employees the bank will add
The about face comes as banks brace for a surge in mortgage activity fueled by lower interest rates Refinancing activity which accounts for a majority of mortgage applications has more than doubled from a year ago according to data released by the Mortgage Bankers Association on Wednesday Purchase activity has climbed 10 from a year ago
Indeed business could boom further if mortgage rates drop even more with U S monetary policymakers expected to cut the benchmark interest rate a third time this year at the end of October
Other large banks that also let go of staff in 2018 will likely follow Wells Fargo in staffing back up according to banking sources They said some lenders have been struggling to keeping up with the wave of originations following sweeping headcount reductions across the industry
Large banks have laid off thousands of mortgage employees over the past two years as refinancing applications plunged and amid increased competition from non bank entrants like Quicken Loans Inc
The financial services industry tends to fire and rehire thousands of employees as revenue fluctuates but analysts thought the most recent decline in the mortgage business would be permanent as the process has become more automated
The Wells Fargo staffing plans will be fluid allowing the bank to adjust to the market the memo said
The latest hiring initiative could throw a wrench into Wells Fargo s plans to cut costs In July the bank warned investors that 2020 costs would not be lower as previously expected since the bank hired thousands of employees to improve its risk management and work through the regulatory fallout from its various scandals
The fourth largest U S bank by assets has leaned on cost cuts to stabilize its bottomline amid sluggish revenue trends Now the San Francisco based bank must also contend with fresh macroeconomic uncertainty from a changing interest rate environment that s pressuring lending margins across the industry |
WFC | Buy Wells Fargo Advantage Funds Today Top 4 Picks | Wells Fargo NYSE WFC Advantage Funds managed more than 476 billion of assets as of Mar 31 2019 from diverse mutual fund categories The fund family includes domestic and foreign funds to money market funds asset allocation funds and fixed income funds The Wells Fargo Fund family claims that it offers funds in every key category each guided by professional investment teams that have been chosen because of their proven time tested strategies The team also helps investors to clarify investment ideas and identifies their risk tolerance Additionally the owner of the Wells Fargo Advantage Funds brand Wells Fargo is one of the top four banks in the United States and has been maintaining its standard in the financial services sector for more than 150 years It is a highly diversified financial services company with operations limited not only to the domestic market Below we share with you four top ranked Wells Fargo Advantage Funds Each has earned a Strong Buy and is expected to outperform its peers in the future To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Wells Fargo Precious Metals Fund seeks capital growth over a long period of time The fund invests the majority of its assets in companies that are involved in the business of precious metals These companies could be engaged in the exploration mining development processing and or dealing of precious metals EKWDX has returned 43 4 on a year to date basis EKWDX has an expense ratio of 0 95 compared with the category average of 1 39 Wells Fargo Utility and Telecommunications Fund seeks total return The fund invests the majority of its assets in common preferred and convertible preferred stocks of utility and telecommunications companies etc EVUDX is a non diversified fund The fund has returned 22 1 on a year to date basis As of July 2019 EVUDX held 33 issues with 10 63 of its assets invested in Visa Inc NYSE V Class A Wells Fargo Special Mid Cap Value Fund Class R6 aims for capital growth The fund invests the majority of its assets in equity securities of medium capitalization companies These companies usually have market capitalizations similar to those on the Russell Midcap Index at the time of purchase WFPRX has returned 22 4 on a year to date basis WFPRX has an expense ratio of 0 73 compared with the category average of 1 11 Wells Fargo Discovery Fund Class R6 seeks capital appreciation The fund invests the majority of its assets in equity securities of small and medium capitalization companies It invests about a quarter of its assets in equity securities of foreign issuers through ADRs and other such investments WFDRX has returned 36 1 on a year to date basis Michael T Smith is one of the fund managers of WFDRX since 2011 To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | Wells Fargo Jumps the Stablecoin Bandwaggon | launched the preliminary stage of its Digital Cash project becoming the underwriter for a dollar pegged stablecoin The banking giant which in the past cut off the Bitfinex exchange from its service holds a struct stance to crypto assets believing they should also exist under conditions of banking supervision
As a result of the increasing digitization of banking services globally we see a growing demand to further reduce friction regarding traditional borders Wells Fargo stated
The new coin is scheduled for a launch in 2020 starting with a round of internal testing Wells Fargo plans to |
WFC | Pound Rally Fizzles as Ireland Puts Dampener on Brexit Hopes | Bloomberg The British pound pulled back from a two month high as Ireland warned a Brexit deal is not close calming a rally sparked by optimism from European Commission President Jean Claude Juncker
The currency halted two weeks of gains after Irish Foreign Minister Simon Coveney said the mood music has improved yet there is still quite a wide gap between the U K and European Union Sterling had been closing in on its longest run of weekly increases since January after Sky News reported Thursday that Juncker thinks a deal can be reached by the Oct 31 deadline
Pound traders are hanging on every word from both sides as they try to ascertain if an economically damaging crash out scenario can be averted Negotiations around Brexit have been stuck for months with little sign of movement as the October deadline looms for the U K to leave the EU
The pound could have more to gain on the upside over the short term said Derek Halpenny the head of markets research at MUFG adding the bank remained skeptical until it hears supportive comments from Brussels on any U K proposals We certainly have to acknowledge there might be something in this but equally this could so easily be much ado about nothing
The pound was down 0 2 at 1 2501 by 13 12 p m in London after touching the highest since July 15 It s the best performer among peers this month with a 2 9 rally
The positive noise around efforts to forge a deal for now is just rhetoric that can be interpreted either way Juncker himself said Wednesday that a risk of a no deal Brexit was palpable
It s really unclear as to where things actually stand said Brendan McKenna a foreign exchange strategist at Wells Fargo NYSE WFC Securities in New York
Sterling could rise 5 if a deal is clinched or tumble to parity with both the dollar and the euro if the U K crashes out of the bloc according to Shamik Dhar chief economist at BNY Mellon Investment Management |
WFC | U S consumer confidence falls in September trade fears dominate | By Lucia Mutikani
WASHINGTON Reuters U S consumer confidence ebbed in September as an escalation in trade tensions fanned concerns about business and labor market conditions a potentially worrying signal for consumer spending which has been driving the economy
The relatively downbeat survey from the Conference Board on Tuesday mirrors other confidence surveys and could renew financial market fears of a recession that had been assuaged somewhat by strong August retail sales industrial production and housing data
The Federal Reserve last week cut interest rates for the second time to offset the impact on the economy from the year long trade war between the United States and China and slowing global growth The U S central bank lowered rates in July for the first time since 2008
The longest economic expansion on record now in its 11th year is mostly being sustained by consumer spending via the lowest unemployment rate in nearly 50 years But there have been fears the U S China trade war which has weighed on business investment and manufacturing could slam the brakes on consumer spending
We aren t in a recession yet but the consumer is plainly worried said Chris Rupkey chief economist at MUFG in New York Consumer confidence is fragile and any further escalation of the trade war will probably be all it takes to push them and the economy over the edge
The Conference Board said its consumer confidence index dropped to a reading of 125 1 this month from a downwardly revised 134 2 in August The index was previously reported at 135 1 in August Economists polled by Reuters had forecast it declining to 133 5 in September
The survey s present situation measure based on consumers assessment of current business and labor market conditions decreased to 169 0 this month from 176 0 in August The Conference Board said the escalation in trade and tariff tensions in late August appears to have rattled consumers and that it appears confidence is plateauing
The White House announced a new round of tariffs on Chinese imports last month Some of the new duties which include a range of consumer goods came into effect this month
A trade deal between the two economic giants appeared elusive on Friday after Chinese officials unexpectedly canceled a visit to farms in Montana and Nebraska President Donald Trump said on Tuesday he would not accept a bad deal for the American people
The Conference Board survey is now converging with the University of Michigan survey which showed a sharp drop in consumer sentiment in August While the University of Michigan s sentiment index edged up in September worries about the impact of tariffs on the economy continued to weigh heavily on consumer s minds
GROWTH ENGINE
The trade war is beginning to more meaningfully weigh on confidence said Tim Quinlan a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina Decreased confidence could weigh on consumer spending but consumption should remain a key engine of growth in third quarter
The dollar was little changed against a basket of currencies while U S Treasury prices rose Stocks on Wall Street were trading slightly lower
The Conference Board survey s so called labor market differential derived from data on respondents views on whether jobs are plentiful or hard to get fell to 33 2 in September from 38 3 in July That measure closely correlates to the unemployment rate in the Labor Department s employment report
The share of consumers expecting more jobs in the months ahead decreased to 17 5 this month from 19 9 in August while those anticipating fewer jobs increased to 15 7 from 13 7
These findings are in line with a slowdown in job growth Employers added 130 000 jobs to their payrolls in August Job gains have averaged 158 000 per month this year above the roughly 100 000 per month needed to keep up with growth in the working age population The unemployment rate is at 3 7
Other data on Tuesday showed mixed readings on house price inflation in July The Federal Housing Finance Agency FHFA said house prices accelerated in July amid gains across the key regions a trend that could offset some of the boost to the housing market from declining mortgage rates
The FHFA said its house price index increased a seasonally adjusted 5 0 in July from a year ago That followed a 4 8 rise in June Prices rose 0 4 on a monthly basis after advancing 0 2 in June The FHFA s index is calculated by using purchase prices of houses financed with mortgages sold to or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac
Separately the S P CoreLogic Case Shiller house price index for 20 metro areas increased 2 0 from a year ago in July the smallest gain since August 2012 after rising 2 2 in June
Lower mortgage interest rates and tight inventory levels are supporting home values and we expect annual growth to stay close to 3 over the remainder of the year said Matthew Pointon property economist at Capital Economics in New York |
WFC | Invest In These 3 Top Wells Fargo Advantage Mutual Funds | Wells Fargo NYSE WFC the owner of Wells Fargo Advantage Funds brand is one of the four largest banks in the United States with a legacy spanning 150 years in the financial services sector Wells Fargo had over 476 billion of assets as of Mar 31 2019 which includes 92 billion from Galliard Capital Management Wells Fargo Advantage Funds diversifies its assets across a wide range of mutual fund categories These include both domestic and foreign funds asset allocation funds and fixed income funds In 2010 the boards of trustees of Wells Fargo Advantage Funds and Evergreen Funds had approved the merger of the fund families to create a new fund line up under the brand name Wells Fargo Advantage Funds The Wells Fargo fund family claims that each fund is guided by a premier investment team chosen for its focused attention to a particular investment style There s a fund to meet the investment goals and risk tolerance of almost any investment portfolio Below we share with you three top ranked Wells Fargo Advantage Funds Each has earned a Strong Buy and is expected to outperform its peers in the future Investors can Wells Fargo Discovery Fund Class R6 seeks long term capital appreciation The fund invests the majority of its assets in equity securities of small and medium capitalization companies The fund may also invest a quarter of its total assets in equity securities of foreign issuers through American Depository Receipts and other such investments WFDRX has returned 40 8 on a year to date basis WFDRX has an expense ratio of 0 78 compared with the category average of 1 17 Wells Fargo International Bond Fund Class R6 aims for total return The fund invests the majority of its assets in foreign debt securities These may comprise obligations of governments corporate bodies or supranational agencies spread across a range of currencies ESIRX has returned 6 4 on a year to date basis As of Jun 2019 ESIRX held 104 issues with 10 79 of its assets invested in Eurico Ferreira S A 0 Wells Fargo Precious Metals Fund Class A aims for capital growth over a long period The fund invests most of its assets in precious metal related investments These tend to be companies that are engaged in the exploration development mining processing or dealing of gold and other precious metals and minerals EKWAX has returned 27 7 on a year to date basis Michael P Bradshaw is one of the fund managers of EKWAX since 2007 To view the Zacks Rank and past performance of all Wells Fargo Advantage Funds investors can Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | Wall Street Tumbles On Geopolitical Concerns | U S equity futures retreated as Hong Kong s political and Argentina s financial scenario dented investor sentiments The Hong Kong international airport known to be one of the busiest cargo airports was shut down due to heavy protests In fact almost 5 000 protestors flooded the airport leading to the cancellation of many flights Protestors are opposing a proposal that would allow extradition to mainland China something that would threaten their judicial protection Protestors also want Hong Kong leader Carrie Lam to officially withdraw the extradition bill Argentina by the way added to the tensions The Argentine stock market recently slumped more than 30 after market friendly President Mauricio Macri lost the Presidential primaries by a much wider margin than expected While Macri and his running mate Miguel Angel Pichetto garnered 32 1 of the votes their opposition center left Alberto Fernandez whose running mate is populist ex leader Cristina Fernandez de Kirchner received 47 7 Markets by the way have already been plagued by U S China trade tensions Trump has said that a near term deal with China on tariffs is unlikely anytime soon He also said that he may cancel the upcoming September meeting of Sino American trade negotiators The United States might impose 10 tariffs on 300 billion of Chinese products starting Sep 1 However it is widely expected that the latest round of tariffs won t have much of an impact on inflation per Wells Fargo Company NYSE WFC The bank said that the inflation backdrop remains tame as we look ahead to the second half of the year We estimate the latest round of tariffs would add a little over 0 1 percentage points to the year over year rate of CPI inflation The Labor Department will report July s Consumer Price Index CPI on Aug 13 On the corporate earnings front Tilray Inc NASDAQ TLRY which engages in the research cultivation processing and distribution of medical cannabis is set to report earnings on Aug 13 after market close From global marijuana legalization to the rapidly increasing use of CBD as a wellness product all of this should help Tilray report promising numbers Lest we forget the United States had legalized hemp and hemp related products last year opening up opportunities for Canadian producers The Zacks Consensus Estimate calls for second quarter sales growth of more than 40 million from the year ago 9 7 million Shares of Advance Auto Parts Inc NYSE AAP by the by fell in premarket action after reporting second quarter earnings and sales miss |
WFC | Why Is Wells Fargo WFC Down 2 7 Since Last Earnings Report | It has been about a month since the last earnings report for Wells Fargo WFC Shares have lost about 2 7 in that time frame outperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is Wells Fargo due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at its most recent earnings report in order to get a better handle on the important drivers Wells Fargo Q2 Earnings Beat Estimates NII DisappointsDriven by prudent expense management Wells Fargo delivered a positive earnings surprise of 12 1 in second quarter 2019 Earnings of 1 30 per share surpassed the Zacks Consensus Estimate of 1 16 Results also came in higher than the prior year quarter adjusted earnings of 1 08 per share Higher fee income and fall in expenses aided the company s performance Further escalation in loans and deposits acted as tailwinds However reduced net interest income was an undermining factor Moreover provisions soared Net income came in at 6 2 billion compared with 5 2 billion recorded in the prior year quarter The quarter s total revenues came in at 21 6 billion outpacing the Zacks Consensus Estimate of 20 8 billion The top line however came in line with the prior year quarter figure Furthermore on a year over year basis quarterly revenue generation at the business segments was mixed The Community Banking segment s total quarterly revenues declined and Wholesale Banking revenues were down around 1 8 Yet revenues in the Wealth and Investment Management unit were up 2 5 Net Interest Income Falls Costs Down Fee Income ImprovesWells Fargo s net interest income in the quarter came in at 12 1 billion down 4 year over year Higher interest expenses and lower interest income from loans held for sale led to this downside partly offset by increased interest income from debt and equity securities loans along with higher other interest income Furthermore net interest margin shrunk 11 basis points bps year over year to 2 82 Non interest income at Wells Fargo came in at around 9 5 billion up 5 year over year primarily owing to rise in service charges on deposit accounts card fees net gains from trading activities and equity securities along with elevated other income These increases were mainly muted by lower mortgage banking revenues and reduced net gains on debt securities As of Jun 30 2019 total loans were 949 9 billion slightly up sequentially Higher consumer and commercial loan portfolio was recorded Total deposits came in at 1 29 trillion up 2 4 from the prior quarter Non interest expenses at Wells Fargo were around 13 4 billion down 4 from the year earlier quarter This decline in expenses primarily resulted from lower core deposit and other intangibles FDIC and other deposit assessments commission and incentive compensation along with other expenses These were partly offset by rise in salaries and employee benefits along with equipment costs The company s efficiency ratio of 62 3 was below 64 9 recorded in the year ago quarter A fall in efficiency ratio indicates a rise in profitability Credit Quality A Mixed BagWells Fargo s credit quality metrics was a mixed bag in the June end quarter Allowance for credit losses including the allowance for unfunded commitments totaled 10 6 billion as of Jun 30 2019 down 4 5 year over year Net charge offs were 653 million or 0 28 of average loans in the reported quarter up 8 5 from the year ago quarter s net charge offs of 602 million 0 26 Non performing assets slipped 17 1 to 6 3 billion in the second quarter from 7 6 billion reported a year ago Notably provision for credit losses was 503 million 11 higher Strong Capital PositionWells Fargo has maintained a sturdy capital position During the April June quarter the company returned 6 1 billion to shareholders through common stock dividends and net share repurchases Wells Fargo s Tier 1 common equity under Basel III fully phased in decreased to 149 2 billion from 153 billion recorded in the prior year quarter The Tier 1 common equity to total risk weighted assets ratio was estimated to be 12 under Basel III fully phased in as of Jun 30 2019 in line with the year earlier quarter Book value per share advanced to 40 10 from 37 41 recorded a year ago Return on assets was 1 31 up from 1 10 in the prior year quarter Return on equity was 13 26 up from 10 60 OutlookThird Quarter 2019Mortgage originations for the quarter are expected to be up due to seasonality for home buying along with some additional refinance activity which resulted from the recent decrease in mortgage interest rates Production margin is expected to increase modestly in third quarter 2019 Full Year 2019The company expects effective income tax rate to be about 18 excluding the impact of any unanticipated discrete items Management expects NII to be down 2 5 compared with 2018 due to a flatter curve tightening loan spreads resulting from a competitive market with ample liquidity and continued upward pressure on deposit pricing Near termPer management the bank s strategic and financial targets beyond 2019 will be established once a permanent CEO comes in place Therefore currently the bank focuses on cost saving initiatives Also expenses are projected to be in the 52 53 billion range for 2019 excluding annual operating losses in excess of 600 million such as litigation and remediation accruals and penalties For 2020 expenses are expected in 50 51 billion range Moreover ROE is anticipated to be 12 15 over the next two years ended 2020 while ROTCE is expected to be 14 17
How Have Estimates Been Moving Since Then
It turns out fresh estimates have trended downward during the past month
VGM Scores
Currently Wells Fargo has a poor Growth Score of F however its Momentum Score is doing a lot better with a B Charting a somewhat similar path the stock was allocated a grade of A on the value side putting it in the top 20 for this investment strategy
Overall the stock has an aggregate VGM Score of B If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift Notably Wells Fargo has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
WFC | U S 30 year bond yields hit record low curve inversion grows | By Richard Leong NEW YORK Reuters U S Treasury debt yields fell on Wednesday with 30 year yields setting all time lows as fears about a recession and trade tensions between China and the United States stoked unrelenting demand for low risk government debt Inversion is spreading across the U S yield curve where short dated yields are running above long dated ones which has also unsettled investors as yield curve inversion often precedes a recession A deeper inversion is sending a stronger statement that a meaningful slowdown is coming said Brian Rehling co head of global fixed income strategy at Wells Fargo NYSE WFC Investment Institute in St Louis Missouri A recession is a possibility in the next 12 to 18 months but it s not a done deal Investors added to their safe haven holdings of Treasuries as UK Prime Minister Boris Johnson sought to limit parliament s opportunity to derail his Brexit plan by suspending the House of Commons for around a month starting in mid September GRAPHIC U S yield curve inversion Treasury prices pared their gains as Wall Street rose reversing earlier losses While some fund managers view Treasuries as expensive they are hard pressed to make a case to sell them given the uncertain outcome of the trade developments between Beijing and Washington It s hard to see where the endgame is with the trade tensions said James Barnes director of fixed income at The Bryn Mawr Trust Co in Devon Pennsylvania The Federal Reserve is also monitoring the trade tensions in its economic outlook Interest rates futures implied traders fully expect the U S central bank to lower key borrowing costs by at least a quarter point at its Sept 17 18 policy meeting following up on its first rate cut since 2008 GRAPHIC U S Fed s next rate cut Meanwhile the Treasury Department sold 18 billion in two year floating rate notes and five year fixed rate debt to solid demand It will complete this week s 113 billion of fixed rate government note supply with a 32 billion sale of seven year debt on Thursday In late Wednesday trading the yields on 30 year government bonds were 1 939 down 2 2 basis points from late Tuesday They hit an all time low of 1 905 earlier Wednesday The 30 year yield is below 3 month T bill rates which has not happened since 2007 As for the rest of the yield curve the spread on three month T bill rates over 10 year yields widened to as much as 55 basis points a level not seen since March 2007 while the premium on 2 year yields above 10 year yields increased to as high as 6 5 basis points according to Refinitiv and Tradeweb data GRAPHIC Biggest monthly fall in 30 year USTs since 2011 Additional reporting from Dhara Ranasinghe in London editing by Jonathan Oatis and Chris Reese |
WFC | Pound Hits Highest in Over a Month as Johnson Strategy Crumbles | Bloomberg Want the lowdown on European markets In your inbox before the open every day Sign up here
The pound rallied for a third day after Parliament tore up U K Prime Minister Boris Johnson s Brexit strategy and denied his request for a snap election tempering fears of further political turmoil
Sterling headed for its biggest weekly gain since May after lawmakers voted to force Johnson to delay Brexit for three months An election is still on the horizon with the prime minister losing his majority earlier this week but it may not come until after an extension to the deadline has been set reducing the risk of a chaotic exit from the European Union
The U K currency has recovered the ground it lost since Johnson announced last week that he would suspend Parliament for over a month ahead of the Brexit deadline setting off a rebellion which ultimately led to lawmakers seeking to block him from pursuing a no deal It is headed for a weekly gain of 1 5
Johnson plans to appeal directly to voters in a speech to decide what they want through an election according to a statement from his office Still he needs two thirds of Parliament to back him in order to call one and the opposition Labour party wants the Brexit delay to pass into law first
My expectation is Brexit is delayed until Jan 31 with an election after the initial deadline and before the end of January said Neil Jones head of currency sales for financial institutions at Mizuho Bank Ltd A delay for both Brexit and a general election will continue to send the pound higher
The pound gained 0 7 to 1 2336 after rallying 1 4 Wednesday The currency also strengthened 0 5 to 89 63 pence per euro
Even with the results in Parliament Wednesday evening investors are primed for an election to come at some stage Pressure is mounting on the Prime Minister with 21 rebel MPs expelled from the Conservative party this week His own brother Jo Johnson resigned on Thursday citing tension between family loyalty and the national interest
The pound s fate in the longer term depends on when an election is called and who looks likely to win Traders may sell the currency on the announcement of a snap poll according to Wells Fargo NYSE WFC currency strategist Erik Nelson as it would bring the risk of a coalition with Nigel Farage s Brexit Party
If an election were held today the Conservative Party would likely win the most seats in Parliament but fall well short of an outright majority said Nelson A Conservative Brexit coalition gaining an outright majority would be the most significant downside scenario for the pound as this group would likely be freer to push for a no deal Brexit
Adds context from 7th paragraph updates pricing |
WFC | Wells Fargo to Pilot DLT Based Cross Border Settlement Platform | American financial services company Wells Fargo Company NYSE WFC is planning to launch a pilot of a distributed ledger technology DLT based internal settlement service in 2020
In a Sept 17 press release Wells Fargo described a DLT based platform designed to perform internal book transfers of international payments within its global network using digitized cash The company claimed that it has already successfully tested the concept of money transfers between the United States and Canada |
WFC | 4 Precious Metal Funds To Buy On Easier Monetary Policy | Gold and other precious metals could strengthen further given the anticipation of a cut in interest rates by the Federal Reserve this week This brings into picture precious metal mutual funds which could gain from a rise in prices of gold and other precious metals and make ideal investments A Fed Rate Cut is ImminentThe central bank was rather upfront in hinting at a rate cut in its testimonial to the Congress earlier this month In fact Fed Chair Jerome Powell cited factors such as weak global growth and trade uncertainties to back the recent dovish stance Therefore investors are no longer debating whether there will be a rate cut in the FOMC s meeting scheduled Jul 30 31 Instead they are discussing the extent of the cut According to the CME Group s FedWatch a majority of investors are anticipating a quarter point cut in interest rates currently in a range of 2 25 2 5 this week Why Invest in Precious Metals Now Since a rate cut is fairly expected investors could expect gold and other precious metal prices to move further up In fact gold already crossed the 1 400 level in June On Jul 29 spot gold edged up 0 31 to reach 1 422 65 per ounce A low rate environment would dampen the greenback Other currencies would become stronger as dollar weakens thus making it easier to purchase gold This would raise demand for the yellow metal Our ChoicesWe have selected four precious metal mutual funds for you All these funds carry a Zacks Mutual Fund Rank 1 Strong Buy or 2 Buy Moreover these funds have encouraging year to date returns Additionally the minimum initial investment is less than 5000 We expect these funds to outperform their peers in the future Now we come to the most vital question why should investors consider mutual funds Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds read more Wells Fargo NYSE WFC Precious Metals A fund invests the majority of its assets precious metal investments The non diversified fund aims for capital growth and may invest any amount of its assets in equity securities of non U S companies comprising of American Depositary Receipts and other like investments EKWAX invests up to 40 of its assets in equity securities of emerging markets and up to 25 at the time of purchase in debt securities related to precious metals This Zacks sector Precious Metal has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds EKWAX carries a Zacks Rank 1 The fund has an annual expense ratio of 1 09 which is below the category average of 1 39 It has year to date returns of 23 5 The fund has a minimum initial investment of 1000 American Century Global Gold A fund aims for total return which comprises capital appreciation and dividends ACGGX invests most of its assets in companies that are engaged in activities such as mining processing or distributing gold or other precious metals The fund is non diversified This Zacks sector Precious Metal has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds ACGGX carries a Zacks Rank 1 The fund has an annual expense ratio of 0 92 which is below the category average of 1 39 It has year to date returns of 20 5 The fund has a minimum initial investment of 2500 Oppenheimer Gold Special Minerals A fund aims for capital appreciation The fund invests the majority of its assets in common stocks of companies that are engaged in mining and processing gold and other precious metals gold bullion and precious metal ETFs etc The fund may also invest in instruments whose economic characteristics are similar to the mentioned securities This Zacks sector Precious Metal has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds OPGSX carries a Zacks Rank 1 The fund has an annual expense ratio of 1 17 which is below the category average of 1 39 It has year to date returns of 24 7 The fund has a minimum initial investment of 1000 Franklin Gold and Precious Metals A fund seeks capital growth The non diversified fund invests the lion s share of its assets in securities of companies that pursue gold and precious metals operations The fund may invest in companies of any market capitalization and the companies may be located anywhere in the world FKRCX primarily invests in non U S companies and may also invest in American Global and European Depositary Receipts This Zacks sector Precious Metal has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds FKRCX carries a Zacks Rank 2 The fund has an annual expense ratio of 0 98 which is below the category average of 1 39 It has year to date returns of 21 8 The fund has a minimum initial investment of 1000 Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | Wells Fargo pays 6 5 million to Navajo Nation over predatory practices | By Bryan Pietsch
WASHINGTON Reuters Wells Fargo Co N WFC will pay the Navajo Nation 6 5 million to settle a lawsuit over predatory and unlawful practices by the bank the Native American tribe said on Thursday
The Navajo Nation sued Wells Fargo in federal and tribal courts in 2017 alleging the San Francisco based bank had opened unauthorized accounts for vulnerable tribe members as part of the potentially millions of fake accounts opened by bank employees nationwide
The settlement puts other companies on notice that harmful business practices against the Navajo people will not be tolerated Navajo Nation President Jonathan Nez said in the statement which referred to Wells Fargo s long campaign of predatory and unlawful practices
Wells Fargo said in a statement that the agreement demonstrates the bank s commitment to make things right regarding past sales practices issues
The settlement with the Navajo Nation followed a 575 million deal in 2018 with U S states over claims that Wells Fargo opened phony customer accounts and improperly referred and charged customers for financial products
The settlement comes as Wells Fargo continues its attempt to overcome the fallout from its earlier practices The bank said last year it had re established itself but has continued to face harsh criticism from politicians and consumer advocates
The bank has seen two chief executives exit the firm in the wake of the series of scandals and is still searching for a replacement for former CEO Timothy Sloan who abruptly stepped down in March |
WFC | S P 500 gains near ceiling as risks gnaw at investors Reuters poll | By Sin ad Carew
NEW YORK Reuters The S P 500 stock index will see limited gains in the remaining months of 2019 as anxiety over slowing global growth and the U S China trade war weigh against expectations of monetary policy easing according to a Reuters poll of strategists
The U S benchmark index SPX will likely finish 2019 at 2 925 nearly 2 higher than Tuesday s close based on the median forecast of 47 strategists polled by Reuters in the last two weeks This would represent an almost 17 jump from the end of 2018
The targets were little changed from a Reuters poll in May
Most respondents still viewed global monetary policy easing as a net positive for equities but a majority said the risk to their market expectations was skewed to the downside
You have slow global growth You ve got a yield curve inversion You ve got a lot of uncertainty around trade tariff policy and a Federal Reserve that by all accounts is probably behind the curve right now cutting too slow based on financial conditions said Darrell Cronk chief investment officer for Wells Fargo NYSE WFC Wealth and Investment Management in New York
Cronk expects the current bull market to continue into 2021 as U S consumer spending remains strong and corporate earnings grow albeit at a much slower pace than in 2018
But the U S China trade war looms large as a key risk to bullish targets for the market Strategists are concerned that higher prices resulting from tariffs could result in slower global trade and a weakening international economy
The risk to our rosy view has clearly risen said Hank Smith chairperson of the investment selection committee at Haverford Trust co in Randor Pennsylvania adding Trump may think China bashing is a winning issue for the 2020 U S presidential election or that China may not be willing to negotiate due to the possibility that Trump may not get re elected
While the S P s close on Tuesday showed a year to date gain of 14 45 and was roughly 5 below its record close on July 26 daily volatility since then has often been attributed to dramatic changes in the tone of U S President Donald Trump s comments about the trade war
Very much depends on how long disruptive trade policies continue If they go on much longer the effects will be longer term and it might be too late to reverse them due to lost trust with trade partners said Bryant Evans investment advisor at Cozad Asset Management in Champaign Illinois
The poll showed the Dow finishing 2019 at 26 007 according to the median forecast of 26 strategists That s up just 1 from Tuesday s close and an advance of 11 5 from the end of 2018 |
WFC | U S Jobs Report to Offer Litmus Test for Fed After Rate Cut | Bloomberg The next U S jobs report is more likely to embolden the Federal Reserve to keep this round of interest rate cuts short and sweet rather than validate investor views that the economy needs significantly more monetary easing
The Labor Department figures Friday are expected to show payroll gains moderated to a still solid 165 000 in July according to the median estimate in a Bloomberg survey Unemployment probably ticked down to a half century low of 3 6 and wages remained solid albeit without accelerating
Such numbers arriving two days after Fed policy makers lowered interest rates for the first time in a decade while disappointing investors by failing to signal a sustained series of cuts would suggest consumer spending will keep growth on a healthy trajectory Less prospect for rate cuts could prove bearish for stocks and short dated Treasuries
Fed Chairman Jerome Powell stressed on Wednesday that the economy remains in good shape and said the reduction in borrowing costs will help insure against weak global growth and uncertainty over trade policy while helping to boost inflation closer to the central bank s goal
What Bloomberg s Economists Say
The July jobs report will set the tone for the pace of economic activity in the second half of the year The breadth of job gains will signal whether dormant components of the economy are beginning to re engage Even more importantly aggregate income gains will signal the propensity for consumers to prop up growth in the interim
Carl Riccadonna and Yelena Shulyatyeva
Read the full report here
At this stage the economy is still quite strong said Gregory Daco chief U S economist at Oxford Economics The employment report will help determine whether further rate cuts are needed down the road and a strong report would be an indication that perhaps we need to do less rate cuts than anticipated
If the payrolls number syncs with the Fed s view that the U S economy needs only a little help to keep expanding that could push up yields on shorter dated Treasuries in particular said John Lovito co chief investment officer for global bonds at American Century Investments
A strong number will reinforce the notion that the Fed easing cycle may not be as aggressive as previously thought Lovito said
On Thursday traders of fed funds futures boosted the amount of easing they expect from the central bank this year after President Donald Trump abruptly escalated his trade war with China by announcing new tariffs More than half a percentage point of reductions is now priced in
For U S stocks which on Wednesday posted the biggest decline in two months and headed Thursday for the lowest close since June on the tariff news a more robust jobs number could hurt equities by reducing chances of deeper Fed easing Stocks may rise on a poor figure as long as it s not so terrible that it suggests the Fed would be powerless to stop a recession
There s an environment of good news is going to be bad for the markets said Chris Gaffney president of world markets at TIAA Bank If we see a big miss you could see investors look to increase the odds of additional Fed cuts and that would be positive for the markets at this point
Despite a few stumbles this year the labor market has remained broadly solid a point the Fed reiterated in Wednesday s statement A separate Labor Department report Thursday showed filings for unemployment benefits remained low last week The July forecast for job gains is in line with expectations for a gradual moderation rather than a sharp slowdown
Wages may get some more attention this time They ve decelerated slightly since February when earnings growth hit the best pace of the expansion and the tight labor market has failed to meaningfully push inflation toward the Fed s 2 goal
But if wage gains accelerate once again it may limit the case for the Fed to aggressively lower borrowing costs
Also in focus Manufacturing has shown increasing signs of weakness amid softer global demand lingering trade disputes and bloated inventories A gauge of factory employment released Thursday fell to the lowest level since 2016 Powell noted that manufacturing output has declined for two straight quarters which fits the technical definition of a recession
Economists project a significant pullback in manufacturing hiring in July with 5 000 new jobs following 17 000 in the prior month The July data can be tricky though as automakers have traditionally shut down plants this time of year
The jobs report will be far from the last word before the Fed s next decision on Sept 18 Policy makers will have a slew of other data including another employment report along with potential new trade developments like another meeting between U S and Chinese trade negotiators
We know that they re very worried about the risks stemming from the global environment said Sarah House senior economist at Wells Fargo NYSE WFC Co So this is really going to be a report card in how the domestic economy is holding up
Updates to add new tariffs in ninth paragraph |
WFC | U S Jobs Report to Offer Litmus Test for Fed After Rate Cut | Bloomberg The next U S jobs report is more likely to embolden the Federal Reserve to keep this round of interest rate cuts short and sweet rather than validate investor views that the economy needs significantly more monetary easing
The Labor Department figures Friday are expected to show payroll gains moderated to a still solid 165 000 in July according to the median estimate in a Bloomberg survey Unemployment probably ticked down to a half century low of 3 6 and wages remained solid albeit without accelerating
Such numbers arriving two days after Fed policy makers lowered interest rates for the first time in a decade while disappointing investors by failing to signal a sustained series of cuts would suggest consumer spending will keep growth on a healthy trajectory Less prospect for rate cuts could prove bearish for stocks and short dated Treasuries
Fed Chairman Jerome Powell stressed on Wednesday that the economy remains in good shape and said the reduction in borrowing costs will help insure against weak global growth and uncertainty over trade policy while helping to boost inflation closer to the central bank s goal
What Bloomberg s Economists Say
The July jobs report will set the tone for the pace of economic activity in the second half of the year The breadth of job gains will signal whether dormant components of the economy are beginning to re engage Even more importantly aggregate income gains will signal the propensity for consumers to prop up growth in the interim
Carl Riccadonna and Yelena Shulyatyeva
Read the full report here
At this stage the economy is still quite strong said Gregory Daco chief U S economist at Oxford Economics The employment report will help determine whether further rate cuts are needed down the road and a strong report would be an indication that perhaps we need to do less rate cuts than anticipated
If the payrolls number syncs with the Fed s view that the U S economy needs only a little help to keep expanding that could push up yields on shorter dated Treasuries in particular said John Lovito co chief investment officer for global bonds at American Century Investments
A strong number will reinforce the notion that the Fed easing cycle may not be as aggressive as previously thought Lovito said
On Thursday traders of fed funds futures boosted the amount of easing they expect from the central bank this year after President Donald Trump abruptly escalated his trade war with China by announcing new tariffs More than half a percentage point of reductions is now priced in
For U S stocks which on Wednesday posted the biggest decline in two months and headed Thursday for the lowest close since June on the tariff news a more robust jobs number could hurt equities by reducing chances of deeper Fed easing Stocks may rise on a poor figure as long as it s not so terrible that it suggests the Fed would be powerless to stop a recession
There s an environment of good news is going to be bad for the markets said Chris Gaffney president of world markets at TIAA Bank If we see a big miss you could see investors look to increase the odds of additional Fed cuts and that would be positive for the markets at this point
Despite a few stumbles this year the labor market has remained broadly solid a point the Fed reiterated in Wednesday s statement A separate Labor Department report Thursday showed filings for unemployment benefits remained low last week The July forecast for job gains is in line with expectations for a gradual moderation rather than a sharp slowdown
Wages may get some more attention this time They ve decelerated slightly since February when earnings growth hit the best pace of the expansion and the tight labor market has failed to meaningfully push inflation toward the Fed s 2 goal
But if wage gains accelerate once again it may limit the case for the Fed to aggressively lower borrowing costs
Also in focus Manufacturing has shown increasing signs of weakness amid softer global demand lingering trade disputes and bloated inventories A gauge of factory employment released Thursday fell to the lowest level since 2016 Powell noted that manufacturing output has declined for two straight quarters which fits the technical definition of a recession
Economists project a significant pullback in manufacturing hiring in July with 5 000 new jobs following 17 000 in the prior month The July data can be tricky though as automakers have traditionally shut down plants this time of year
The jobs report will be far from the last word before the Fed s next decision on Sept 18 Policy makers will have a slew of other data including another employment report along with potential new trade developments like another meeting between U S and Chinese trade negotiators
We know that they re very worried about the risks stemming from the global environment said Sarah House senior economist at Wells Fargo NYSE WFC Co So this is really going to be a report card in how the domestic economy is holding up
Updates to add new tariffs in ninth paragraph |
WFC | Wells Fargo Says VIX S P Volatility Spikes May Be Overdone | Bloomberg The tariff news induced volatility has outdone that for equities and may be due to reverse according to Wells Fargo NYSE WFC Co
The CBOE Volatility Index or VIX rose as high as 19 46 intraday after U S President Donald Trump announced a new round of tariff hikes on Chinese imports abruptly escalating the trade war between the two countries It was at 18 01 up from Thursday s close as of 8 33 a m in New York The S P 500 posted a modest 0 9 drop on Thursday to put it only about 2 4 below the July 26 record high
Though the escalation in trade war tensions is not insignificant everything would suggest that the bid to S P vol is overdone and that vol has outpaced equities Pravit Chintawongvanich an equity derivatives strategist at Wells Fargo wrote in a note Consider structures which are short near dated S P volatility and skew
The VIX had stayed below 15 throughout July until the aftermath of the Federal Reserve meeting Wednesday briefly pushed it to 16 55 Things calmed down the next day with the gauge dipping below 14 before the trade tweets from Trump propelled it as high as 19 46 The three most traded VIX options on Thursday were calls with August expiry and strike prices of 20 21 and 47 5
Chintawongvanich said the overreaction in S P 500 volatility could be a result of the large volume of call buying on the VIX in recent days which would have left any dealers on the other side of the trade short gamma in August and September futures The dealers might have covered VIX futures during the rally he said exacerbating the volatility reaction
So called short gamma strategies effectively bet that the market will stay quiet |
WFC | Wells Fargo boosts estimate for possible legal reserve shortfall to 3 9 billion | NEW YORK Reuters Wells Fargo Co N WFC said on Friday that it boosted its estimate for a possible legal reserve shortfall to 3 9 billion for the quarter ending June 30 from 3 1 billion earlier this year according to a regulatory filing
The bank said that the increase was due to a variety of matters including retail sales practices matters |
WFC | Market weighs risk of negative U S Treasury yields | By Richard Leong
Reuters Traders and analysts are considering whether U S bond yields would fall below zero as a record amount around the world sank into negative territory this week
The question has become a talking point and less hypothetical this week as the U S 30 year Treasury bond yield reached the brink of breaking to record lows
Negative yields have become a mainstay in Europe and Japan abetted by their central banks negative rate policy
The United States is expected to avoid this fate analysts say but it can no longer be ruled out
It is no longer absurd to think that the nominal yield on U S Treasury securities could go negative Joachim Fels PIMCO s global economic adviser wrote on Wednesday in a blog post
On Friday the 10 year yield on U S Treasury notes was 1 73 compared with 0 568 on German Bunds and 0 218 on Japanese government securities
Interest rates on U S Treasury bills went negative in 2015 That happened because of expectations the Federal Reserve was sticking to its near zero rate policy into the following year due to global economic worries
RECESSION FED
For U S yields to turn negative for an extended period a key factor would be whether there is U S recession analysts said
Steps taken by China and the United States since last week are seen bringing them closer to an all out trade war that threatens the global economy and financial markets
Moreover the Fed Reserve would have to cut rates to near or below zero and restart its quantitative easing program to combat an economic downturn analysts said
We doubt the Fed leadership would seriously entertain the idea now Wells Fargo NYSE WFC Securities strategists wrote in a research note
The European Central Bank and Bank of Japan have had little to show for adopting negative rates in 2014 and 2016 respectively to help their economies While negative rates help borrowers they have hurt banks and investors
Fears about a U S recession intensified after President Donald Trump last Thursday threatened to impose a 10 tariff on 300 billion of Chinese imports beginning Sept 1
The U S bond market s most reliable indicator of a pending recession hit its most alarming level in 12 1 2 years this week
The premium on three month bill rates above 10 year note yields reached 40 basis points on Wednesday the highest since March 2007 before subsiding to 29 basis points on Friday
The inversion between these two maturities has preceded U S recessions in the past 50 years
Graphic U S yield curve inversion
SAFE HAVEN BIDS FOR BONDS
Nervousness about the longest ever U S expansion coming to an end set off a safe haven stampede into Treasuries German Bunds and UK gilts as well as yen and gold up and a simultaneous dumping of stocks and other risky assets
This dramatic shift resulted in record 13 2 trillion worth of negative yielding bonds around the world on Wednesday according to J P Morgan
With the U S economy still expanding and the Fed having a some room to cut rates before hitting zero traders believe U S yields will not turn negative anytime soon
At this point we are not going to see it said Mary Ann Hurley vice president of fixed income at D A Davidson in Seattle
Still prospects of negative U S yields will unlikely disappear soon
Never say never Wells Fargo strategists said
Graphic European Japanese bond yields |
WFC | Sterling Weakness Punctures Subdued Session | Overview
Summer in the northern hemisphere contributing to the subdued activity in the global capital markets The MSCI Asia Pacific index stalled after a four day advance with Japanese Chinese and Australian equities offsetting gains in Taiwan South Korea and India Europe s Dow Jones Stoxx 600 is flattish struggling to extend its three day rally US shares are also little changed after the S P 500 rose for the fifth consecutive session yesterday to new record highs It has risen in 10 of the last 12 sessions Australian and New Zealand 10 year benchmark yields fell five basis points while European yields are off two five basis points and US Treasuries are little changed The dollar is little changed though firmer against the major currencies Sterling weighed down by Brexit concerns is the weakest After being turned back from approaching 1 26 yesterday the pound has turned toward the two year low set last week as the euro pushes above GBP0 9000 for the first time since January
Asia Pacific
Reports suggest little progress has been made in Chinese American trade talks since the new tariff truce was announced last month A conference call is expected between top negotiators this week and if there is any progress the US delegation led by Mnuchin and Lighthizer will go to Beijing soon Separately the NY Times reports that the aid to US farmers to blunt the effect of the retaliatory tariffs has more than offset the funds collected through the tariffs in the first place
The Bank of Japan meets a day before the FOMC meeting concludes on July 31 Although it is not expected to change policy there is speculation that it may increase its bond buying at the start of the second half of the fiscal year October 1 when the government may offer a supplemental budget to ensure that the sales tax increase from 8 to 10 does not spur an economic contraction which has resulted from past tax hikes
New Zealand s Q2 CPI was in line with expectations rising 0 6 on the quarter and 1 7 year over year from 1 5 and this is seen as posing no obstacle to a rate cut when the central bank meets on August 6 The market expects the RBNZ to pause after next month s move but is nearly 50 50 for another cut before the end of the year The Reserve Bank of Australia has cut at the past two meetings and is widely seen on hold at its August 6 meeting The minutes from the July 2 meeting continued to point investors toward the labor market and wage growth for insight into the next move which is also likely later in Q4
The dollar has forged a shelf in recent days near JPY107 80 and this may be reinforced by around 1 3 bln in options struck between JPY107 70 JPY107 90 that expire today However offers in the European morning near JPY108 10 proved a sufficient cap in the quiet turnover The Australian dollar initially extended yesterday s gains but ran into resistance near the highs saw earlier this month in front of 0 7050 Buying on dips suggests the Aussie s advance may not be over and our reading of the chart suggest potential toward 0 7100 The New Zealand dollar saw its best level in three months today but the expiring options at 0 6720 and 0 6740 for NZD 225 and NZD 300 mln respectively are in play
Europe
EC President nominee Von der Leyen gave an impassioned and visionary speech to the EU Parliament today in which she reportedly switched between English French and German She endorsed a European style green deal and although there were not enough details to win over the Greens endorsement she is expected to win the support of a majority 374 MPs to replace Juncker There will likely be a larger market reaction euro negative if she fails to secure a majority Under such a scenario an emergency summit would probably be necessary The vote is expected toward after the close of European markets today
The strongest rise in wages in over a decade failed to offset the negativity coming what appears to be the more aggressive stance by Johnson and Hunt which is seen boosting the chance of a no deal exit which despite the attempts of some politicians and journalists to play down the adverse impact continues to spook investors Just as the media reports that the EU may be looking some areas it can compromise and soften its stance Johnson and Hunt have come out swinging to court the last of the Tory voters by saying they would drop the backstop To us this still seems like jettisoning the Good Friday Agreement so it can withdraw from another treaty
Average weekly earnings in the UK rose 3 6 May excluding bonuses and 3 4 with bonuses for the past three months on year over year compared with 3 4 and 3 2 respectively However the other details of the report suggest the labor market is cooling The claimant count rose for the second consecutive month and at 38k in June was at its highest level in a decade It has averaged a little more than 28k this year compared with less than 11k in H1 18 The growth in jobs was less than expected though unemployment was unchanged at 3 8 ILO
Germany s ZEW survey was another disappointment The assessment of the current situation plunged into negative territory 1 1 from 7 8 for the first time in nine years The expectations component returned to the trough seen in H2 18 24 5 from 21 1 It plays on fears that the largest economy in Europe and the fourth largest in the world may have contracted in Q2 Real sector data is holding up better than the survey data but even the IMF has come out in favor of fiscal support
The euro stalled last week and yesterday near 1 1280 In this range trading affair the lower end of the range should be tested next There may be mild support near 1 1220 but a move back toward 1 1180 1 1190 appears likely in the near term There are nearly 1 5 bln euros in options struck between around 1 1180 and 1 1195 expire today Sterling has pushed below 1 2470 and a break of 1 2440 would signal the next leg down that could extend toward 1 2380
America
There are three features to the US session today First is the data retail sales and industrial production A survey by Action Economics found a median forecast of a 0 2 increase in retail sales which would translate into a 0 3 average in Q2 after a 0 9 average in Q1 Although retail sales are a little more than 40 of personal consumption one gets a sense of at least one dimension of the slow down that may have halved US growth in Q2 The Action Economics survey found a median forecast for industrial output of 0 2 compared with 0 1 in the Bloomberg survey We argue that Q2 data is no longer relevant for investors and policymakers A Fed cut at the end of the month is a foregone conclusion What happens after that is not going to be driven by Q2 data
That is a good segue into the second feature of the US session No fewer than five Fed officials will speak today including Powell After Powell s testimony last week and the FOMC minutes little new can reasonably be expected Collectively the market is pricing in two cuts before the end of the year and is divided about a third The third feature today is corporate earnings where JP Morgan Goldman and Wells Fargo NYSE WFC are the marquee names Citi s miss yesterday may have lowered the bar
The US Dollar recorded its lows for the year against the Canadian dollar before the weekend near CAD1 3020 We noted that the technical indicators did not confirm the new low and that the divergence could signal US dollar consolidation correction The low held yesterday and the greenback is edging slightly higher today It has tested the 38 2 retracement of last week s decline CAD1 3065 and the next technical objectives are found between CAD1 3080 and CAD1 3100 The Mexican peso has traded firmly in thin Asian and European turnover The dollar has not traded above MXN19 00 and if this is sustained through the North American session it would be the first time since May 1 We are concerned that the peso s strength now may see the leveraged accounts pullback or even take some profits |
WFC | Wells Fargo WFC Q2 Earnings And Revenues Beat Estimates | Wells Fargo WFC came out with quarterly earnings of 1 30 per share beating the Zacks Consensus Estimate of 1 16 per share This compares to earnings of 1 08 per share a year ago These figures are adjusted for non recurring items
This quarterly report represents an earnings surprise of 12 07 A quarter ago it was expected that this biggest U S mortgage lender would post earnings of 1 08 per share when it actually produced earnings of 1 20 delivering a surprise of 11 11
Over the last four quarters the company has surpassed consensus EPS estimates three times
Wells Fargo which belongs to the Zacks Banks Major Regional industry posted revenues of 21 58 billion for the quarter ended June 2019 surpassing the Zacks Consensus Estimate by 3 83 This compares to year ago revenues of 21 55 billion The company has topped consensus revenue estimates three times over the last four quarters
The sustainability of the stock s immediate price movement based on the recently released numbers and future earnings expectations will mostly depend on management s commentary on the earnings call
Wells Fargo shares have added about 1 4 since the beginning of the year versus the S P 500 s gain of 20 2
What s Next for Wells Fargo
While Wells Fargo has underperformed the market so far this year the question that comes to investors minds is what s next for the stock
There are no easy answers to this key question but one reliable measure that can help investors address this is the company s earnings outlook Not only does this include current consensus earnings expectations for the coming quarter s but also how these expectations have changed lately
Empirical research shows a strong correlation between near term stock movements and trends in earnings estimate revisions Investors can track such revisions by themselves or rely on a tried and tested rating tool like the Zacks Rank which has an impressive track record of harnessing the power of earnings estimate revisions
Ahead of this earnings release the estimate revisions trend for Wells Fargo was mixed While the magnitude and direction of estimate revisions could change following the company s just released earnings report the current status translates into a Zacks Rank 3 Hold for the stock So the shares are expected to perform in line with the market in the near future You can see the complete list of today s Zacks 1 Rank Strong Buy stocks here
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead The current consensus EPS estimate is 1 20 on 20 57 billion in revenues for the coming quarter and 4 69 on 82 99 billion in revenues for the current fiscal year
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well In terms of the Zacks Industry Rank Banks Major Regional is currently in the bottom 13 of the 250 plus Zacks industries Our research shows that the top 50 of the Zacks ranked industries outperform the bottom 50 by a factor of more than 2 to 1 |
WFC | Wells Fargo profit beats estimates on cost controls rise in loans | Reuters Wells Fargo Co N WFC beat analysts estimates for quarterly profit on Tuesday as the fourth largest U S bank benefited from an uptick in lending and aggressive cost cutting
The San Francisco based lender has had to work to gain back the trust of customers and investors after more than two years of fines and investigations into inappropriate sales practices
The bank has been leaning on cost controls to cope with sluggish revenue trends in the wake of the sales scandals that spread to each of its primary business segments and claimed two chief executives
Interim Chief Executive Officer Allen Parker said the bank had made progress in his second quarter in charge on its top priorities of focusing on customers and meeting the expectations of regulators
Wells Fargo reported non interest expense of 13 4 billion down 533 million from a year earlier while total loans rose 0 6 to 949 88 billion
Net income applicable to common stock rose to 5 85 billion or 1 30 per share in the second quarter ended June 30 from 4 79 billion or 98 cents per share a year earlier
Analysts had expected a profit of 1 15 per share according to IBES data from Refinitiv |
WFC | U S home builder sentiment inches up in July NAHB | Reuters A private gauge of U S home builder sentiment increased in July as falling mortgage rates offset rising building costs and worries about global trade tensions The National Association of Home Builders and Wells Fargo Co N WFC said on Tuesday their index of builder confidence in newly built single family homes increased to 65 from 64 in June Analysts polled by Reuters had forecast the reading to remain steady at 64 Builders report solid demand for single family homes However they continue to grapple with labor shortages a dearth of buildable lots and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes NAHB Chairman Greg Ugalde said in a statement The NAHB index is seen as a proxy on domestic housing starts which will be released on Wednesday at 8 30 a m EDT 1230 GMT Analysts polled by Reuters forecast home builders likely broke ground at an annualized pace of 1 261 million units in June down from a 1 269 million pace in May The NAHB survey s components rose broadly in July The gauge on current single family home sales rose to 72 from 71 while the barometer on prospective buyers increased one point to 48 The measure on expectations on home sales over the next six months edged up to 71 from 70 in June Last week interest rates on U S 30 year fixed mortgages fell to 4 04 from 4 07 the previous week
Attractive rates should help spur new home purchases in large metro suburban markets where approximately one third of new construction takes place NAHB Chief Economist Robert Dietz said in a statement |
WFC | Wells Fargo Co Earnings Revenue Beat in Q2 | Investing com Wells Fargo Co NYSE WFC reported second quarter earnings that beat analysts expectations on Tuesday and revenue that topped forecasts
The firm reported earnings per share of 1 3 on revenue of 21 58B Analysts polled by Investing com forecast EPS of 1 17 on revenue of 20 94B That compared to EPS of 0 98 on revenue of 21 55B in the same period a year earlier The company had reported EPS of 1 2 on revenue of 21 61B in the previous quarter
Wells Fargo Co shares gained 0 51 to trade at 46 94 in pre market trade following the report
Wells Fargo Co follows other major Financial sector earnings this month
On Tuesday JPMorgan reported second quarter EPS of 2 82 on revenue of 29 57B compared to forecasts of EPS of 2 51 on revenue of 28 84B
Citigroup earnings beat analysts expectations on Monday with second quarter EPS of 1 95 on revenue of 18 76B Investing com analysts expected EPS of 1 81 on revenue of 18 51B
Stay up to date on all of the upcoming earnings reports by visiting Investing com s earnings calendar |
WFC | Why Wells Fargo WFC Could Beat Earnings Estimates Again | If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report you should consider Wells Fargo WFC This company which is in the Zacks Banks Major Regional industry shows potential for another earnings beat
This biggest U S mortgage lender has seen a nice streak of beating earnings estimates especially when looking at the previous two reports The average surprise for the last two quarters was 7 26
For the most recent quarter Wells Fargo was expected to post earnings of 1 08 per share but it reported 1 20 per share instead representing a surprise of 11 11 For the previous quarter the consensus estimate was 1 17 per share while it actually produced 1 21 per share a surprise of 3 42
Price and EPS Surprise
For Wells Fargo estimates have been trending higher thanks in part to this earnings surprise history And when you look at the stock s positive Zacks Earnings ESP Expected Surprise Prediction it s a great indicator of a future earnings beat especially when combined with its solid Zacks Rank
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank 3 Hold or better produce a positive surprise nearly 70 of the time In other words if you have 10 stocks with this combination the number of stocks that beat the consensus estimate could be as high as seven
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Wells Fargo currently has an Earnings ESP of 0 48 which suggests that analysts have recently become bullish on the company s earnings prospects This positive Earnings ESP when combined with the stock s Zacks Rank 3 Hold indicates that another beat is possibly around the corner We expect the company s next earnings report to be released on July 16 2019
Investors should note however that a negative Earnings ESP reading is not indicative of an earnings miss but a negative value does reduce the predictive power of this metric
Many companies end up beating the consensus EPS estimate though this is not the only reason why their shares gain Additionally some stocks may remain stable even if they end up missing the consensus estimate
Because of this it s really important to check a company s Earnings ESP ahead of its quarterly release to increase the odds of success Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported |
WFC | Wells Fargo WFC Earnings Expected To Grow Should You Buy | Wells Fargo WFC is expected to deliver a year over year increase in earnings on lower revenues when it reports results for the quarter ended June 2019 This widely known consensus outlook gives a good sense of the company s earnings picture but how the actual results compare to these estimates is a powerful factor that could impact its near term stock price
The stock might move higher if these key numbers top expectations in the upcoming earnings report which is expected to be released on July 16 On the other hand if they miss the stock may move lower
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management s discussion of business conditions on the earnings call it s worth handicapping the probability of a positive EPS surprise
Zacks Consensus Estimate
This biggest U S mortgage lender is expected to post quarterly earnings of 1 15 per share in its upcoming report which represents a year over year change of 6 5
Revenues are expected to be 20 87 billion down 3 2 from the year ago quarter
Estimate Revisions Trend
The consensus EPS estimate for the quarter has been revised 1 29 lower over the last 30 days to the current level This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change
Price Consensus and EPS Surprise
Earnings Whisper
Estimate revisions ahead of a company s earnings release offer clues to the business conditions for the period whose results are coming out This insight is at the core of our proprietary surprise prediction model the Zacks Earnings ESP Expected Surprise Prediction
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate The idea here is that analysts revising their estimates right before an earnings release have the latest information which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier
Thus a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate However the model s predictive power is significant for positive ESP readings only
A positive Earnings ESP is a strong predictor of an earnings beat particularly when combined with a Zacks Rank 1 Strong Buy 2 Buy or 3 Hold Our research shows that stocks with this combination produce a positive surprise nearly 70 of the time and a solid Zacks Rank actually increases the predictive power of Earnings ESP
Please note that a negative Earnings ESP reading is not indicative of an earnings miss Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and or Zacks Rank of 4 Sell or 5 Strong Sell
How Have the Numbers Shaped Up for Wells Fargo
For Wells Fargo the Most Accurate Estimate is higher than the Zacks Consensus Estimate suggesting that analysts have recently become bullish on the company s earnings prospects This has resulted in an Earnings ESP of 0 87
On the other hand the stock currently carries a Zacks Rank of 3
So this combination indicates that Wells Fargo will most likely beat the consensus EPS estimate
Does Earnings Surprise History Hold Any Clue
While calculating estimates for a company s future earnings analysts often consider to what extent it has been able to match past consensus estimates So it s worth taking a look at the surprise history for gauging its influence on the upcoming number
For the last reported quarter it was expected that Wells Fargo would post earnings of 1 08 per share when it actually produced earnings of 1 20 delivering a surprise of 11 11
Over the last four quarters the company has beaten consensus EPS estimates two times
Bottom Line
An earnings beat or miss may not be the sole basis for a stock moving higher or lower Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors Similarly unforeseen catalysts help a number of stocks gain despite an earnings miss
That said betting on stocks that are expected to beat earnings expectations does increase the odds of success This is why it s worth checking a company s Earnings ESP and Zacks Rank ahead of its quarterly release Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they ve reported
Wells Fargo appears a compelling earnings beat candidate However investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release |
WFC | Crude Oil Settles Higher on U S China Trade Truce Reports of Oil Cut Extension | Investing com Crude oil futures settled higher on Monday as OPEC and its allies reportedly agreed to extend production cuts while a U S China trade truce also lifted sentiment
On the New York Mercantile Exchange crude futures rose 1 1 to settle at 59 09 a barrel while on London s Intercontinental Exchange Brent settled up 0 49 at 65 06 a barrel
Russia agreed with Saudi Arabia to extend the current output cut agreement by six to nine months Russian President Vladimir Putin said according to published reports
The fact that President Putin of Russia said he had agreed to roll over output cuts with Saudi Arabia over the weekend is very significant said Michael Kelly global head of multi asset at PineBridge Investments
A nine month extension to output cuts by OPEC and its Russia led partners could make a big difference to oil prices said Carsten Fritsch of Commerzbank DE CBKG
Positive news on the U S China trade front eased the prospect of a further dent to global growth underpinning oil prices
In the run up to the trade truce some had predicted the world economy would take a further knock if U S President Donald Trump imposed tariffs on the 300 billion worth of Chinese goods that are currently not subject to levies
Despite the trade truce some have warned formidable obstacles lie on the road to a deal
We believe a partial trade deal in 2020 seems to be the most likely scenario but investors should expect more periods like the past six weeks and the attendant market volatility Wells Fargo NYSE WFC said in a note |
WFC | 4 Gold Funds To Counter Weak Economic Data And Global Risks | Gold prices recently took a leap benefiting from a decline in the dollar rising tensions in the Middle East uncertainties around a potential U S China trade truce the possibilities of a Fed rate cut and United States weak economic data
As investors flock to buy gold related assets in this time of economic uncertainty one could consider investing in gold mutual funds to hedge against rising global and financial risks
US Iran Conflict Turns Worse
Jun 25 Trump warned Iran of obliteration saying that an attack on anything American will be met with great and overwhelming force The already tense air between Washington and Tehran has only become tenser with the tweet
Earlier this week President Donald Trump imposed hard hitting sanctions on Iran whichprevent Iran s supreme leader Ayatollah Ali Khamenei and top officials from accessing crucial financial resources The action came on the heels of the shooting of an unmanned American drone by Iran last week
United States and Iran s deteriorating relations are only pushing gold prices higher
US China G20 Meet Might Not Yield Desired Result
The must awaited meeting between Trump and his Chinese counterpart on Jun 29 may not satisfy investor expectations after all
Although equity markets might rally temporarily if there is a truce to the ongoing trade war but the damaging effect of the tariffs on global economy could continue till the levies have been discarded
However should the trade war escalate with new tariffs there could be a recession like slowdown in global growth according to economists
Weak US Economic Data Might Trigger a Fed Rate Cut
Although comments from Federal Reserve Chairman Jerome Powell and St Louis Fed President James Bullard on Jun 25 lowered investor hopes of a near term rate cut recent economic data points toward a possible rate cut
To add to May s disappointing 75 000 new job additions new single family home sales unexpectedly declined for the second month in May indicating that lower mortgage rates are yet to boost the housing market New home sales shed 7 8 to a seasonally adjusted annual rate of 626 000 units in May the lowest since December
In addition consumer confidence tumbled to a 21 month low in June as escalations in trade tensions impacted household optimism In fact the 10 year Treasury note stooped to its lowest level in more than two and a half years at 1 994 on Jun 25 following weak U S economic data
The aforementioned economic data can therefore potentially make way for Fed to cut rates in the near future
Weaker Greenback Pushes Gold Higher
Finally dollar s decline has certainly boosted gold prices with the precious metal reaching six year highs earlier this week Dollar has been declining over Fed s neutral to now dovish stance which has changed sentiment on the greenback
Gold s demand has increased amid rising geopolitical and trade tensions already and the weaker dollar is bound to push it further
Our Choices
Considering the aforementioned factors we have selected four gold mutual funds that you could add to your portfolio All these funds carry a Zacks Mutual Fund Rank 1 Strong Buy or 2 Buy Moreover these funds have encouraging year to date returns Additionally the minimum initial investment is less than 5000
We expect these funds to outperform their peers in the future Remember the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers Unlike most of the fund rating systems the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund
Now we come to the second most vital question why should investors consider mutual funds Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds read more
Vanguard Global Capital Cycles Fund Investor Shares aims for long term capital growth The fund particularly invests in a wide range of sectors and a mix of developed and emerging markets stocks It typically holds companies across all market capitalizations The non diversified fund invests in U S and non U S securities alike Agnico Eagle Mines Ltd and Barrick Gold Corp are among the fund s top holdings
This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds
VGPMX carries a Zacks Mutual Fund Rank 1 The fundhas an annual expense ratio of 0 33 which is below the category average of 1 37 It has year to date returns of 3 8 The fund has a minimum initial investment of 3000
Franklin Gold and Precious Metals Fund Advisor Class aims for capital growth The fund invests the majority of its assets in securities of gold and precious metals operation companies The non diversified fund also invests in American Global and European Depositary Receipts The fund may purchase securities of gold and precious metals operation companies located globally Anglogold Ashanti Ltd and B2Gold Corp are among the fund s top holdings
This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds
FGADX carries a Zacks Mutual Fund Rank 1 The fundhas an annual expense ratio of 0 73 which is below the category average of 1 37 It has year to date returns of 2 3 The fund has no minimum initial investment
Invesco Oppenheimer Gold Special Minerals Fund Class Y aims for capital appreciation The fund invests most of its assets in common stocks of companies that are engaged in mining processing or dealing in gold or other metals or minerals and gold bullion etc The non diversified fund has Kirkland Lake Gold Ltd and Barrick Gold Corp among its top holdings
This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds
OGMYX carries a Zacks Mutual Fund Rank 1 The fundhas an annual expense ratio of 0 92 which is below the category average of 1 37 It has year to date returns of 7 1 The fund has no minimum initial investment
Wells Fargo NYSE WFC Precious Metals Fund Class A seeks long term capital appreciation The fund invests the majority of its assets in investments related to precious metals The non diversified fund has Agnico Eagle Mines Ltd Barrick Gold Corp Kirkland Lake Gold Ltd and Royal Gold Inc among its top 10 holdings
This Zacks sector Precious product has a history of positive total returns for more than 10 years To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds
EKWAX carries a Zacks Mutual Fund Rank 2 The fundhas an annual expense ratio of 1 09 which is below the category average of 1 37 It has year to date returns of 5 The fund has a minimum initial investment of 1000
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WFC | U S home builder confidence retreats despite lower mortgage rates | Reuters A private gauge of U S home builder sentiment fell in June retreating from a six month high as rising building costs and trade worries offset falling mortgage rates The National Association of Home Builders and Wells Fargo NYSE WFC said on Monday their index of builder confidence in newly built single family homes fell to 64 from 66 in May Analysts polled by Reuters had forecast the reading to rise to 67 While demand for single family homes remains sound builders continue to report rising development and construction costs with some additional concerns over trade issues NAHB Chairman Greg Ugalde said in a statement The NAHB index is seen as a proxy on domestic housing starts which will be released on Tuesday at 8 30 a m EDT 1230 GMT Analysts polled by Reuters forecast home builders likely broke ground at an annualized pace of 1 239 million units in May compared with a 1 235 million pace in April The NAHB survey s components broadly weakened in June The gauge on current single family home sales dipped to 71 from 72 while the barometer on prospective buyers decreased to 48 from 49 The measure on expectations on home sales over the next six months fell to 70 from 72 in May Despite lower mortgage rates home prices remain somewhat high relative to incomes which is particularly challenging for entry level buyers NAHB Chief Economist Robert Dietz said in a statement
Last week interest rates on U S 30 year fixed rate mortgages remained at 3 82 their lowest levels since September 2017 Freddie Mac said |
WFC | U S housing starts drop in May masks some signs of improvement | By Lucia Mutikani WASHINGTON Reuters U S homebuilding fell in May but groundbreaking activity in the prior two months was stronger than previously thought pointing to some tentative signs of improvement in the struggling housing market Land and labor shortages are however making it difficult for builders especially in the single family housing segment to fully take advantage of a sharp decline in mortgage rates That has left the housing market continuing to grapple with tight inventory and sluggish sales growth The report from the Commerce Department on Tuesday came as Federal Reserve officials started a two day policy meeting Low inflation a slowing economy and an escalation in the trade war between Washington and Beijing have led financial markets to fully price in an interest rate cut this year pulling down mortgage rates The U S central bank is however not expected to cut rates on Wednesday Housing continues to wander along not doing much better but not weakening a whole lot said Joel Naroff chief economist at Naroff Economic Advisors in Holland Pennsylvania Housing starts dropped 0 9 to a seasonally adjusted annual rate of 1 269 million units last month amid a drop in the construction of single family housing units the government said Data for April was revised up to show homebuilding rising to a pace of 1 281 million units instead of increasing to a rate of 1 235 million units as previously reported Housing starts in March were also stronger than initially estimated Economists polled by Reuters had forecast housing starts edging up to a pace of 1 239 million units in May Single family homebuilding which accounts for the largest share of the housing market dropped 6 4 to a rate of 820 000 units in May Single family housing starts fell in the Northeast the Midwest and West but rose in the South where the bulk of homebuilding occurs Some on the weakness in groundbreaking activity likely reflects heavy rain and flooding in some parts of the country The housing market hit a soft patch last year and has been a drag on economic growth for five straight quarters The PHLX housing index was trading higher in line with a broadly firmer U S stock market The dollar rose slightly against a basket of currencies while U S Treasury yields fell GRADUAL IMPROVEMENT Despite the recent signs of improvement in housing starts there are concerns that renewed trade tensions between the United States and China could hurt future home building A survey on Monday showed confidence among homebuilders ebbed in June with builders continuing to report rising development and construction costs with some additional concerns over trade issues Builders said that despite lower mortgage rates home prices remain somewhat high relative to incomes which is particularly challenging for entry level buyers The 30 year fixed mortgage rate has decreased to 3 82 from a peak of about 4 94 in November according to data from mortgage finance agency Freddie Mac According to the latest data house prices rose 3 7 in March from a year ago outpacing wages which increased 3 1 in May Building permits rose 0 3 to a rate of 1 294 million units in May It was the second straight monthly increase in permits Building permits have been weak this year with much of the decline concentrated in the single family housing segment Permits to build single family homes increased 3 7 to a rate of 815 000 units in May after five straight monthly declines Permits were boosted by a 7 7 jump in the South the largest gain since December 2016 But single family housing permits fell in the Northeast West and Midwest The gain in permits along with more favorable buying conditions points to gradually improving activity over the summer said Mark Vitner a senior economist at Wells Fargo NYSE WFC Securities in Charlotte North Carolina That said lower mortgages rates will not likely be rocket fuel for residential construction and a surge in activity is unlikely Starts for the volatile multi family housing segment surged 10 9 to a rate of 449 000 units last month Permits for the construction of multi family homes dropped 5 0 to a pace of 479 000 units Housing completions fell 9 5 to 1 213 million last month Realtors estimate that housing starts and completion rates need to be in a range of 1 5 million to 1 6 million units per month to plug the inventory gap The stock of housing under construction was little changed at 1 131 million units
If you were waiting for more construction to deal with the nation s growing housing shortage you are going to have a longer wait said Chris Rupkey chief economist at MUFG in New York |
WFC | Wall Street Week Ahead Investors eye G20 with hopes for U S China trade detente | By Sin ad Carew NEW YORK Reuters All eyes will be on U S President Donald Trump and China s President Xi Jinping next week as investors are desperate for any signs of a thaw in U S China relations even if it shifts expectations for much awaited Federal Reserve interest rate cuts The S P 500 closed at a record high on Thursday after the U S central bank said it was ready to cut rates if needed in the face of growing risks including the U S China trade war The benchmark index was volatile on Friday as hopes of trade progress offset concerns about U S Iran tensions To extend the rally one requirement will be friendly talks between the leaders of the world s two biggest economies They are expected to meet in Japan on the sidelines of a Group of 20 G20 summit next week U S China negotiations spectacularly broke down in early May after Trump accused China of retreating from previous commitments causing a market sell off Trump then slapped 25 tariffs on 200 billion of Chinese imports to the United States and threatened 25 tariffs on another 325 billion of Chinese goods creating massive corporate and investor uncertainty that has pressured global economic growth In a press conference after the Fed s policy meeting this week Chairman Jerome Powell said while the baseline economic outlook remains favorable risks continue to grow including the drag rising trade tensions may have on U S business investment and signs of slowing economic growth overseas As the S P has erased May s 6 6 drop on hopes for a rate cut and U S China trade deal progress strategists were hopeful ahead of the G20 summit Adding to optimism was a Wall Street Journal report on Friday citing an unnamed senior administration official that U S Vice President Mike Pence would postpone a planned speech on China policy to avoid stoking tensions before the Trump Xi meeting Investors do not need a complete deal at the G20 to add more confidence to the market but the market needs some assurance there s a de escalation of trade tensions said Frances Donald chief economist and head of macroeconomic strategy at Manulife Investment Management in Toronto The best the market can expect out of the G20 is a handshake and a commitment to resume talking said Paul Christopher head of global market strategy at Wells Fargo NYSE WFC Investment Institute in St Louis Missouri This could be enough to pep up the trade weary market while anything less could cause the market to nosedive The market is already primed for a bad outcome said Jared Woodard global investment strategist at BofA Merrill Lynch Global Research If you saw a tariff reduction or even friendly progress that takes escalation off the table it would give you a huge bullish market response He estimated that the S P could rise above 3 000 if the G20 meeting goes well It closed at 2 954 18 on Thursday But if there is no progress the benchmark index could fall back down back down to 2 750 Woodard said At that point investors would expect a more aggressive response from the Fed or a more conciliatory tone from the president Traders are betting on at least three rate cuts by the end of the year placing the probability of a July cut at 100 according to the CME FedWatch tool One uncertainty investors face is whether positive Trump Xi talks could delay a Fed rate cut U S economic growth while slowing is strong enough that the Fed can afford to wait a while to monitor trade talk progress Wells Fargo s Christopher said But if investors have to weigh a trade de escalation with the possibility of fewer than hoped for rate cuts they will likely recognize that a trade deal is a more powerful boost to U S growth than Fed cuts said Manulife s Donald
U S companies are not suffering from lack of affordable funding They re suffering from a lack of clarity about the future of the economy because of trade tensions she said |
WFC | Wells Fargo will pay customers 386 million over unwanted auto insurance | By Jonathan Stempel Reuters Wells Fargo NYSE WFC Co will pay customers at least 386 million to settle class action claims that the bank signed them up for auto insurance they did not want or need when they took out car loans The proposed settlement was disclosed in filings on Thursday with the U S District Court in Santa Ana California and requires a judge s approval National General Insurance Co an underwriter will pay an additional 7 5 million making the total customer payout at least 393 5 million according to the filings Wells Fargo denied wrongdoing but said it settled to avoid the risks cost and distraction of litigation and has set aside enough money for the payout The defendants will also pay up to 36 5 million for the customers legal costs court papers showed In an email Wells Fargo called the settlement an important step in making things right for customers We will continue sending individualized letters to customers that clearly set out the remediation amount due to them as well as a check for that amount it added Lawyers for the customers did not immediately respond to requsets for comment Wells Fargo is trying to rebuild trust after being beset since September 2016 by a series of scandals over how it treats customers including by wrongly charging an estimated 600 000 auto loan borrowers for insurance nL2N1X51T4 In April 2018 Wells Fargo agreed to pay 1 billion to the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency to settle U S probes of the San Francisco based bank s auto insurance and mortgage practices Wells Fargo remains unable to expand under restrictions imposed in February 2018 by the Federal Reserve until the bank the nation s fourth largest by assets cleans up its culture and oversight Thursday s settlement covers Wells Fargo customers charged for collateral protection insurance between Oct 15 2005 and Sept 30 2016 The complaint said Wells Fargo s wrongful practices caused nearly 275 000 customers to become delinquent and nearly 25 000 vehicles to be illegally repossessed Through Thursday Wells Fargo s share price had been little changed since the scandals broke while the KBW Nasdaq Bank Index had risen 33 percent
The case is In re Wells Fargo Collateral Protection Insurance Litigation U S District Court Central District of California No 17 ml 02797 |
WFC | McIlroy sets sights on Pebble Beach after winning Canadian Open | Reuters Rory McIlroy threatened to shoot 59 but fell just short as he made his Canadian Open debut a great one by clinching a seven stroke victory in Ontario on Sunday and then said it was only mission half accomplished McIlroy carded a stellar nine under par 61 in the final round at Hamilton Golf Country Club matching his career best score on the PGA Tour The four times major champion finished at 22 under 258 while Ireland s Shane Lowry 67 and American Webb Simpson 68 tied for second place on 15 under McIlroy joined Tommy Armour Walter Hagen Arnold Palmer Lee Trevino and Tiger Woods on an elite list of players to have won a Canadian British and U S Open It was a near perfect confidence booster ahead of next week s U S Open at Pebble Beach I ll probably enjoy tonight and have a couple of drinks on the plane on the way to Pebble but once I get up in the morning in California I m not going to going to think about this week he said I m just going to know my game s in good shape and try to win another major Sunday s triumph was McIlroy s 16th on the PGA Tour and he has now won a national championship in six different countries after previous successes at the U S Open British Open Irish Open Australian Open and Hong Kong Open McIlroy rated the win his best since the 2015 Wells Fargo NYSE WFC Championship at Quail Hollow in North Carolina and noted he had also won the week before the 2014 PGA Championship his most recent major victory so hoped to repeat that experience next week When I had that run in 14 I didn t really celebrate it too much he said It was almost as if I was playing an eight round tournament and that s how I feel here I ve played really well these four days and it sets me up for next week TAP IN BIRDIE McIlroy made his intentions clear from the first hole on Sunday where he launched a 350 yard drive and then struck the pin with his pitch shot from 40 yards The tap in birdie gave him the solo lead and he never looked back adding eight more birdies to get to nine under par for the round after 14 holes To start the day tied for the lead and to play like that it gives me a lot of confidence he said I wanted to be aggressive from the start I was four under through five holes and that really established I was in control of this tournament When I birdied 13 my goal went from winning the golf tournament to shooting something in the 50s After a bogey at the par four 16th McIlroy bounced back with a tap in eagle at the par five 17th thanks to a seven iron 200 yard approach and the chance of a 59 was back on with a birdie on the par four 18th McIlroy however pushed his approach into a greenside bunker He tried to hole the 35 foot sand shot but his ball trickled past the hole and he made a bogey after missing a sharply breaking seven foot putt I didn t quite do it McIlroy said
A couple of loose shots down the stretch but I was chasing it trying to make birdies and sometimes you re going to make mistakes when you do that |
WFC | Should Value Investors Choose Wells Fargo WFC Stock Now | Value investing is easily one of the most popular ways to find great stocks in any market environment After all who wouldn t want to find stocks that are either flying under the radar and are compelling buys or offer up tantalizing discounts when compared to fair value One way to find these companies is by looking at several key metrics and financial ratios many of which are crucial in the value stock selection process Let s put Wells Fargo Company NYSE WFC stock into this equation and find out if it is a good choice for value oriented investors right now or if investors subscribing to this methodology should look elsewhere for top picks PE RatioA key metric that value investors always look at is the Price to Earnings Ratio or PE for short This shows us how much investors are willing to pay for each dollar of earnings in a given stock and is easily one of the most popular financial ratios in the world The best use of the PE ratio is to compare the stock s current PE ratio with a where this ratio has been in the past b how it compares to the average for the industry sector and c how it compares to the market as a whole On this front Wells Fargo has a trailing twelve months PE ratio of 9 84 as you can see in the chart below This level actually compares favorably with the market at large as the PE for the S P 500 stands at about 17 8 If we focus on the long term PE trend Wells Fargo s current PE level puts it above its midpoint over the past five years Further the stock s PE also compares pretty favorably with the Zacks Finance sector s trailing twelve months PE ratio which stands at 13 66 At the very least this indicates that the stock is relatively undervalued right now compared to its peers We should also point out that Wells Fargo has a forward PE ratio price relative to this year s earnings of just 9 62 so it is fair to say that a slightly more value oriented path may be ahead for ABCB stock in the near term too P S RatioAnother key metric to note is the Price Sales ratio This approach compares a given stock s price to its total sales where a lower reading is generally considered better Some people like this metric more than other value focused ones because it looks at sales something that is far harder to manipulate with accounting tricks than earnings Right now Wells Fargo has a P S ratio of about 2 04 This is lower than the S P 500 average which comes in at 3 2x right now Also as we can see in the chart below this is well below the highs for this stock in particular over the past few years If anything this suggests some level of undervalued trading at least compared to historical norms Broad Value OutlookIn aggregate Wells Fargo currently has a Value Score of A putting it into the top 20 of all stocks we cover from this look This makes the stock a solid choice for value investors and some of its other key metrics make this pretty clear too For example its P CF ratio comes in at 9 62 which is far better than the industry average of 10 90 Clearly the stock is a solid choice on the value front from multiple angles What About the Stock Overall Though WFC might be a good choice for value investors there are plenty of other factors to consider before investing in this name In particular it is worth noting that the company has a Growth Score of D and a Momentum Score of C This gives WFC a Zacks VGM score or its overarching fundamental grade of B You can read more about the Zacks Style Scores Meanwhile the company s recent earnings estimates have been disappointing The current quarter has seen six downward revisions with two upward movement in the past sixty days For the full year the estimate has seen nine downward revisions in the same time period with one movement in the opposite direction This has had an impact on the consensus estimate as the current quarter consensus estimate has decreased 3 3 in the past two months while the full year estimate has plunged 4 4 You can see the consensus estimate trend and recent price action for the stock in the chart below Wells Fargo Company Price and Consensus Despite the bearish analyst sentiments the stock holds a Zacks Rank 3 Hold Thus we are looking for in line performance from the company in the near term Bottom LineWells Fargo is an inspired choice for value investors as it is hard to beat its incredible lineup of statistics on this front However with a sluggish industry rank among Bottom 41 of more than 250 industries and a Zacks Rank 3 it is hard to get too excited about this company overall In fact over the past two years the Zacks Major Regional Banks industry has clearly underperformed the market at large as you can see below So value investors might want to wait for estimates analyst sentiment and favorable industry factors to turn around in this name first but once that happens this stock could be a compelling pick Will you retire a millionaire One out of every six people retires a multimillionaire Get smart tips you can do today to become one of them in a new Special Report 7 Things You Can Do Now to Retire a Multimillionaire |
WFC | Wells Fargo WFC Stock Moves 0 24 What You Should Know | Wells Fargo WFC closed the most recent trading day at 45 48 moving 0 24 from the previous trading session This change was narrower than the S P 500 s 0 69 loss on the day Elsewhere the Dow lost 0 87 while the tech heavy Nasdaq lost 0 79
Coming into today shares of the biggest U S mortgage lender had lost 5 83 in the past month In that same time the Finance sector lost 3 89 while the S P 500 lost 4 53
Wall Street will be looking for positivity from WFC as it approaches its next earnings report date This is expected to be July 14 2019 On that day WFC is projected to report earnings of 1 17 per share which would represent year over year growth of 8 33 Meanwhile our latest consensus estimate is calling for revenue of 20 92 billion down 2 95 from the prior year quarter
For the full year our Zacks Consensus Estimates are projecting earnings of 4 73 per share and revenue of 83 57 billion which would represent changes of 10 51 and 3 29 respectively from the prior year
Investors should also note any recent changes to analyst estimates for WFC These recent revisions tend to reflect the evolving nature of short term business trends As a result we can interpret positive estimate revisions as a good sign for the company s business outlook
Based on our research we believe these estimate revisions are directly related to near team stock moves Investors can capitalize on this by using the Zacks Rank This model considers these estimate changes and provides a simple actionable rating system
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 Over the past month the Zacks Consensus EPS estimate has moved 0 02 higher WFC is currently a Zacks Rank 3 Hold
Looking at its valuation WFC is holding a Forward P E ratio of 9 64 This valuation marks a discount compared to its industry s average Forward P E of 10 69
It is also worth noting that WFC currently has a PEG ratio of 0 87 This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate The Banks Major Regional was holding an average PEG ratio of 1 33 at yesterday s closing price
The Banks Major Regional industry is part of the Finance sector This group has a Zacks Industry Rank of 99 putting it in the top 39 of all 250 industries
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Make sure to utilize Zacks Com to follow all of these stock moving metrics and more in the coming trading sessions |
WFC | 3 Utilities Funds To Buy On Widening Yield Curve Inversion | A rally in global bonds weighed on yields on May 29 Long term government debt yields came in below short term notes and bills While the 3 month bill yield increased to 2 362 the yield on 10 year Treasury note fell to 2 26 its lowest level since September 2017 The yield on the 10 year note by the way rose just 3 basis points on May 30 to settle at 2 27 which is still low Such a phenomenon also called the yield curve inversion is an indicator of an impending recession As a matter of fact the yield curve inversion between 3 month Treasury bill and the 10 year Treasury note increased to its highest levels since the financial crisis Meanwhile trade tensions between the United States and China escalated further on May 29 after China s state media hinted that the country was considering using its supremacy in rare earth minerals as a weapon in the trade war against America China owns about 40 of the global rare earth mineral resources This veiled threat by the Chinese media targets America s technology and defense industries Such events often find investors scurrying toward safe haven sectors that have already emerged as preferred investments One of the most popular safe haven sectors is utilities This sector comprises companies that provide telephone gas water and electricity services In this context investors looking for stable dividend and interest income can opt to invest in mutual funds having significant exposure in utilities stocks Why Not Invest in Bonds Instead The current interest rate environment in which long term debt instruments have lower yields compared to their short term counterparts investors prefer holding cash This is because the future appears bleak at this point and investing in short term securities would lead to momentary gains provided the Fed does not lower interest rates in the near term However there is widespread speculation among market watchers that weakness in the economy might lead to lowering of interest rates by the Fed However this hypothesis is just arising out of skittishness in the current scenario Also it has been observed that historically inversions of the yield curve have led to many a recession in the United States Meanwhile bond markets might not be the best of one s investment options right now One should rather consider betting on utilities stocks because they provide higher dividends compared to falling long term treasury yields 3 Best ChoicesGiven such circumstances we have highlighted three utilities mutual funds that are poised to gain These funds also carry a Zacks Mutual Fund Rank 1 Strong Buy or 2 Buy Moreover these funds have encouraging three and five year returns Additionally the minimum initial investment is within 5000 We expect these funds to outperform their peers in the future Remember the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers Unlike most of the fund rating systems the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund The question here is why should investors consider mutual funds Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds read more Wells Fargo NYSE WFC Utility and Telecommunications A fund invests heavily in common and preferred stocks and investment grade debt securities of utilities and telecom service providers EVUAX also invests around 35 of its assets in convertible debentures of utilities and telecom companies This Sector Utilities product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 11 4 and 8 1 respectively To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds EVUAXhas a Zacks Mutual Fund Rank 1 and an annual expense ratio of 1 02 which is below the category average of 1 07 Fidelity Telecom and Utilities fund seeks returns through growth of capital and income FIUIX generally invests a major portion of its assets in securities of companies from both telecom and utilities The fund invests not only in U S companies but also in non U S companies This Sector Utilities product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 9 9 and 8 2 respectively To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds FIUIXhas a Zacks Mutual Fund Rank 1 and an annual expense ratio of 0 70 which is below the category average of 1 07 American Century Utilities Fund Investor Class aims for current income and long term growth of capital and income The fund invests most of its net assets in equity securities of companies engaged in the utilities industry The portfolio managers use quantitative and qualitative management techniques along with risk controls to create the portfolio of the fund This Sector Utilities product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 6 5 and 7 1 respectively To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds BULIXhas a Zacks Mutual Fund Rank 2 and an annual expense ratio of 0 67 which is below the category average of 1 07 Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
WFC | Fed Inches Toward Rate Cut as Trade War Frays Patience | Bloomberg Go inside the global economy with Stephanie Flanders in her new podcast Stephanomics Subscribe via Pocket Cast or iTunes
The Federal Reserve s top policy makers aren t yet ready to cut interest rates but worsening trade tensions are nudging them in that direction
In separate comments Tuesday Fed Chair Jerome Powell and his No 2 Richard Clarida reassured nervous investors they re watching closely for signs that disputes between the U S and its trading partners are denting the outlook for the world s largest economy Their remarks moved the Fed slightly closer to its first rate cut since 2008
Powell may have opened the door a crack wider to the possibility that the Federal Reserve will ratify one or two of the rate cuts the markets have discounted this year said Chris Rupkey chief financial economist at MUFG Union Bank NA
Other Fed watchers said Powell and Clarida fell short of signaling a move at the June 18 19 gathering of the Federal Open Market Committee Clarida declared the Fed can t be handcuffed by market pricing that can be volatile
Nonetheless their acknowledgment of risks posed by the deepening trade spats lent comfort to investors who have aggressively increased bets the central bank will ease this year The S P 500 Index of U S stocks jumped 2 1 Tuesday the most since January while the yield on 10 year U S Treasuries rose from Monday s 20 month low
Buying Time
Powell is essentially telling the markets that the Fed is alert to what s happening said Roberto Perli a partner at Cornerstone Macro LLC in Washington and former Fed economist But at the same time it s too soon to judge the impact on the U S outlook because as he says nobody can know how the situation will evolve So he seems to be buying time
Chicago Fed President Charles Evans who votes on policy this year said Wednesday he still sees the economy s fundamentals as solid but was concerned about continued weak inflation
I m a little nervous about the low inflation rate Evans said in an interview with Bloomberg Television s Michael McKee That by itself could be a reason for a little more accommodation
In a separate interview on BTV Wednesday Dallas Fed chief Robert Kaplan said he d want to to see more evidence the economy is slowing before backing a rate cut Kaplan doesn t vote on policy this year
It s early to make a judgment on that Kaplan said We re going to be very vigilant in understanding these heightened trade tensions See if they feed through to the economy Most importantly see if they persist
Financial markets took their latest turn after President Donald Trump threatened last week to slap new tariffs on Mexico unless it stemmed migrant flows to the U S That comes atop deteriorating negotiations between the U S and China over a lengthy list of trade and commercial disputes that have led to raft of new levies in both directions
Speaking at Fed conference in Chicago Tuesday Powell referred to trade negotiations and other matters before saying We are closely monitoring the implications of these developments for the U S economic outlook and as always we will act as appropriate to sustain the expansion
Clarida later told CNBC television the Fed will watch incoming economic indicators carefully to determine whether any move is warranted
As we said in May we think policy was in a good place then and we re going to let the data flow in to indicate if we need to make any adjustments Clarida said Whether or not that means acting preemptively or when the data comes in is just going to depend on the context at the time The Fed in May pledged to be patient as it judges future rate moves
Data Points
Officials will get two important new data points this week A gauge of U S service industries the ISM non manufacturing index for May is due out Wednesday while the Labor Department is scheduled to release its May jobs report Friday
The Fed is being just as patient about lowering rates as it was about raising rates said Mark Vitner a senior economist at Wells Fargo NYSE WFC Co in Charlotte North Carolina While the markets have reacted so viscerally to the ratcheting up in the trade rhetoric the Fed needs some time to see how it will play out
James Bullard head of the St Louis Fed and also a voter this year became the first policy maker to signal likely support for a rate cut In a speech Monday he said a reduction may be warranted soon to boost below target inflation
The prospect of lowering rates will likely cause some unease at the Fed That s because with the target range for their benchmark rate currently at 2 25 to 2 5 officials are already wringing their hands over how little room they have to slash borrowing costs in the event of a recession before hitting zero
In remarks linked to those longer run worries Powell on Tuesday said the proximity of rates to zero represented the preeminent monetary policy challenge of our time
Updates with Evans and Kaplan comments from seventh paragraph |
WFC | Mexican Peso Gains on Optimism About Washington Tariff Talks | Bloomberg Up Down Sideways Mexico s peso gyrated amid key talks in Washington aimed at staving off U S tariffs By midafternoon New York time the peso was solidly in the green on a bet that any agreement even if it s just to keep on talking will bolster Latin America s most traded currency
Negotiations on Wednesday between a Mexican team led by Foreign Minister Marcelo Ebrard and his U S counterpart Michael Pompeo come just days before U S President Donald Trump s June 10 deadline for the first 5 of levies Trump s decision has already drawn the ire of his own Republican party They also threaten to complicate implementation of the U S Mexico Canada free trade agreement that Trump pushed as a replacement for the Clinton era pact
The U S administration wants to get the USMCA deal done and if they move forward with these tariffs that will essentially blow it up said Brendan McKenna a currency strategist at Wells Fargo NYSE WFC in New York Trump is running out of things he can point to as wins right now so if he can put the USMCA on the scoreboard I think he finds a way to do that
If the two sides do manage to dodge any tariffs the peso could rally to almost 19 05 per dollar from about 19 50 now McKenna said Danny Fang a strategist at BBVA MC BBVA in New York sees the peso strengthening to between 19 3 and 19 0 about where it was before Trump first announced his decision on May 30
My guess is that there is a lot of pressure to resolve this eventually Fang said
At Standard Chartered LON STAN strategist Ilya Gofshteyn says that while today s meeting probably won t produce many tangible measures it will probably result in an agreement to delay tariffs and keep talking If that happens the peso will likely strengthen to between 19 25 and 19 30 he said
The administration is getting intense pressure from GOP legislators to hold back Gofshteyn said Meanwhile the AMLO administration has been quite conciliatory
There s also a worst case to consider An escalating series of tariffs that reach a maximum of 25 In that scenario the peso could lose more than a 10th of its value by the end of the year sliding to 22 per dollar according to Jesus Lopez a strategist at Banco Base in Monterrey Lopez calls that possibility unlikely
It s likely that even if the conclusion is of a positive tone and cooperative Trump will decide to go ahead with the first round of tariffs which will generate some pressure on the peso Lopez said
McKenna says that if the first round of tariffs is imposed the peso will likely go to 20 and stay there for some time to come Fang says that if the full 25 is in effect peso could hit 21 5 or worse |
WFC | Exclusive Wells Fargo board weighs keeping interim CEO in place sources | By Imani Moise and Jessica DiNapoli Reuters Wells Fargo NYSE WFC Co board members are considering keeping interim Chief Executive Allen Parker in the job permanently even after saying they would seek an outsider to fill the role according to two sources familiar with the board s thinking Parker 64 was thrust into the position in March when former CEO Tim Sloan resigned abruptly saying pressure from politicians and regulators had become a distraction in running the scandal plagued bank Critics like U S Senator Elizabeth Warren a Democratic presidential candidate had argued Sloan s 30 year tenure made him incapable of changing an internal culture that fueled a string of customer abuses Sloan was the second Wells Fargo CEO to depart following revelations in 2016 that employees had opened potentially millions of fake customers accounts The fourth largest U S bank has paid billions of dollars in fines and is still being investigated by various federal agencies The board had set a goal of hiring an outsider with Chair Betsy Duke saying the position should attract the top talent in banking Reuters reported in April the bank had hired search firm Spencer Stuart and was focused on finding female candidates But the external search has been complicated by concerns Wells Fargo could not pay the big dollars necessary to lure talent from competing banks The board s pick would also be subject to an unusual vetting by U S regulators Board members started warming up to the idea of keeping Parker after he made a good impression on stakeholders including regulators investors and employees He s obviously exceeded expectations and that s a credit to him said Steven Potter CEO of executive recruiting firm Odgers Berndtson U S Sources familiar with the board s thinking said Parker has not been tainted by the scandal since he joined in 2017 the year after customer abuses first emerged One of the sources said Parker s two years at the bank have given him enough understanding of lingering problems to fix them quickly It could take months for the search committee to come to a final decision about who is the best person to lead the San Francisco based bank Comptroller of the Currency Joseph Otting would then need to privately review and sign off on that pick A spokeswoman for Wells Fargo declined to comment Representatives from the Federal Reserve and the Office of the Comptroller of the Currency the bank s primary regulators declined to comment Parker joined Wells Fargo as general counsel from law firm Cravath Swaine Moore where he was partner in charge of managing the firms operations Through his work at the firm defending high profile clients like former U S Secretary of State Henry Kissinger he also developed relationships in Washington that will be helpful while navigating Wells Fargo s regulatory problems At Wells Fargo he has been focused on cleaning up existing issues and preventing them from spreading Parker spent his first two months as interim CEO meeting with regulators in Washington employees in Charlotte North Carolina and investors in New York City He has said his priorities as interim CEO are to improve customer service satisfy regulatory requirements and continue making operations more efficient At an investor conference last week Parker said the bank had entered a new stage of understanding with regulators and that based on his meetings the relationships were more constructive than before We are probably a little bit more attentive now to everything they re saying he told investors And frankly in some cases they ve been speaking with greater clarity Still with Parker at the helm the bank could face even more pressure from lawmakers who wanted to see an outsider industry analysts said Turning inside to find a successor could also make some investors feel the board was unable to find a desirable candidate interested in the job
Since Parker became CEO Wells Fargo created a new unit charged with working through the 14 regulatory consent orders the bank is operating under and expanded its board to include a director who has experience managing a bank |
WFC | Wells Fargo WFC Down 1 2 Since Last Earnings Report Can It Rebound | A month has gone by since the last earnings report for Wells Fargo WFC Shares have lost about 1 2 in that time frame underperforming the S P 500
Will the recent negative trend continue leading up to its next earnings release or is Wells Fargo due for a breakout Before we dive into how investors and analysts have reacted as of late let s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts
Wells Fargo Q1 Earnings Beat on Low ExpensesDriven by prudent expense management Wells Fargo recorded a positive earnings surprise of 11 1 in first quarter 2019 Earnings of 1 20 per share surpassed the Zacks Consensus Estimate of 1 08 Results also came in above the prior year quarter adjusted earnings of 1 12 Higher net interest income and fall in expenses aided the company s performance However reduced fee income was an undermining factor Moreover provisions soared Further reduction in loans and deposits acted as headwinds Net income came in at 5 5 billion compared with 4 7 billion in the prior year quarter The quarter s total revenues came in at 21 6 billion outpacing the Zacks Consensus Estimate of 20 9 billion However the reported figure compares unfavorably with the prior year quarter s tally of 21 9 billion Furthermore on a year over year basis quarterly revenue generation at the business segments disappointed The Community Banking segment s total quarterly revenues edged down around 1 Wholesale Banking revenues were down around 2 7 and revenues in the Wealth and Investment Management unit dipped 2 4 Loans Fee Income Fall Costs Down NII ImprovesWells Fargo s net interest income in the quarter came in at 12 3 billion up 1 year over year Increased interest income from debt securities loans along with higher other interest income were mostly offset by higher interest expense Furthermore net interest margin expanded 7 basis points bps year over year to 2 91 Non interest income at Wells Fargo came in at around 9 3 billion down 4 year over year primarily due to fall in almost all components of income including mortgage banking and insurance income This was partly offset by net gains from equity and trading securities along with higher card fees As of Mar 31 2019 total loans were 948 2 billion down around 0 5 sequentially Reduction in consumer as well as commercial loan portfolio was recorded Total deposits came in at 1 3 trillion down 1 6 from the prior quarter Non interest expense at Wells Fargo was around 13 9 billion down 7 from the year earlier quarter This decline in expenses primarily resulted from lower core deposit and other intangibles FDIC and other deposit assessments and other expenses These were partly offset by rise in salaries and commission and incentive compensation along with elevated employee benefits and equipment costs Wells Fargo remains committed to achieve expense reduction of 4 billion by the end of 2019 The company s efficiency ratio of 64 4 came in below the 68 6 recorded in the year ago quarter A fall in efficiency ratio indicates a rise in profitability Credit Quality ImprovesWells Fargo s credit quality metrics improved in the Mar end quarter Allowance for credit losses including the allowance for unfunded commitments totaled 10 8 billion as of Mar 31 2019 down 4 4 year over year Net charge offs were 695 million or 0 30 of average loans in the reported quarter down 6 2 from the year ago quarter s net charge offs of 741 million 0 32 Non performing assets went down 7 6 to 7 3 billion in the quarter under review from 7 9 billion reported in the prior year quarter Notably provision for credit losses was 845 million significantly higher due to reserve build Strong Capital PositionWells Fargo has maintained a sturdy capital position In the Jan Mar quarter the company returned 6 billion to shareholders through common stock dividends and net share repurchases Wells Fargo s Tier 1 common equity under Basel III fully phased in decreased to 148 billion from 152 3 billion recorded in the prior year quarter The Tier 1 common equity to total risk weighted assets ratio was estimated at 11 9 under Basel III fully phased in as of Mar 31 2019 in line with the year earlier quarter Book value per share advanced to 39 01 from 37 17 recorded in the comparable period last year OutlookSecond Quarter 2019Mortgage originations for the quarter are expected to be up due to seasonality for home buying along with some additional refinance activity which resulted from the recent decrease in mortgage interest rates Production margin is expected to be within the range of last two quarters Full Year 2019The company expects effective income tax rate to be about 18 excluding the impact of any unanticipated discrete items Management expects NII to be down 2 5 compared with 2018 due to a flatter curve tightening loan spreads resulting from a competitive market with ample liquidity and continued upward pressure on deposit pricing Near termPer management the bank s strategic and financial targets beyond 2019 will be established once a permanent CEO comes in place Therefore currently the bank focuses on cost saving initiatives Also expenses are projected to be in the 52 53 billion range for 2019 excluding annual operating losses in excess of 600 million such as litigation and remediation accruals and penalties For 2020 expenses are expected in 50 51 billion range Moreover ROE is anticipated to be 12 15 over the next two years ended 2020 while ROTCE is expected to be 14 17
How Have Estimates Been Moving Since Then
In the past month investors have witnessed a downward trend in fresh estimates
VGM Scores
At this time Wells Fargo has a subpar Growth Score of D a grade with the same score on the momentum front However the stock was allocated a grade of B on the value side putting it in the top 40 for this investment strategy
Overall the stock has an aggregate VGM Score of C If you aren t focused on one strategy this score is the one you should be interested in
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift Notably Wells Fargo has a Zacks Rank 3 Hold We expect an in line return from the stock in the next few months |
WFC | Wells Fargo WFC Stock Moves 0 42 What You Should Know | Wells Fargo WFC closed at 45 51 in the latest trading session marking a 0 42 move from the prior day This change was narrower than the S P 500 s 0 68 loss on the day Meanwhile the Dow lost 0 33 and the Nasdaq a tech heavy index lost 1 46
Prior to today s trading shares of the biggest U S mortgage lender had lost 3 95 over the past month This has lagged the Finance sector s loss of 2 11 and the S P 500 s loss of 1 19 in that time
Wall Street will be looking for positivity from WFC as it approaches its next earnings report date On that day WFC is projected to report earnings of 1 19 per share which would represent year over year growth of 10 19 Meanwhile our latest consensus estimate is calling for revenue of 20 92 billion down 2 95 from the prior year quarter
WFC s full year Zacks Consensus Estimates are calling for earnings of 4 75 per share and revenue of 83 57 billion These results would represent year over year changes of 10 98 and 3 29 respectively
Investors might also notice recent changes to analyst estimates for WFC These revisions typically reflect the latest short term business trends which can change frequently As a result we can interpret positive estimate revisions as a good sign for the company s business outlook
Research indicates that these estimate revisions are directly correlated with near term share price momentum To benefit from this we have developed the Zacks Rank a proprietary model which takes these estimate changes into account and provides an actionable rating system
The Zacks Rank system ranges from 1 Strong Buy to 5 Strong Sell It has a remarkable outside audited track record of success with 1 stocks delivering an average annual return of 25 since 1988 Within the past 30 days our consensus EPS projection has moved 0 31 lower WFC currently has a Zacks Rank of 3 Hold
Digging into valuation WFC currently has a Forward P E ratio of 9 62 This valuation marks a discount compared to its industry s average Forward P E of 10 9
Investors should also note that WFC has a PEG ratio of 0 86 right now This popular metric is similar to the widely known P E ratio with the difference being that the PEG ratio also takes into account the company s expected earnings growth rate The Banks Major Regional was holding an average PEG ratio of 1 32 at yesterday s closing price
The Banks Major Regional industry is part of the Finance sector This industry currently has a Zacks Industry Rank of 152 which puts it in the bottom 41 of all 250 industries
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups Our research shows that the top 50 rated industries outperform the bottom half by a factor of 2 to 1
Be sure to follow all of these stock moving metrics and many more on Zacks com |
WFC | Buy These 7 Low Price to Sales Stocks With Growth Potential | A stock s price to sales ratio reflects how much investors are paying for each dollar of revenues generated by the company If the price to sales ratio is 1 it means that investors are paying 1 for every 1 of revenues generated by the company So it goes without saying that a stock with a price to sales below 1 is a good bargain as investors need to pay less than a dollar for a dollar s worth Thus a stock with a lower price to sales ratio is a more suitable investment than a stock with a high price to sales ratio When considering valuation metrics price to earnings ratio has always been the obvious choice This is because calculations based on earnings are easy and come in handy However price to sales has emerged as a convenient tool to determine the value of stocks that are incurring losses or are in an early cycle of development generating meager or no profits While a loss making company with a negative price to earnings ratio falls out of investor favor its price to sales could indicate the hidden strength of its business This underrated ratio is also used to identify a recovery situation or ensure that a company s growth is not overvalued Price to sales is often preferred over price to earnings as companies can manipulate their earnings using various accounting measures However sales are harder to manipulate and are relatively reliable However one should keep in mind that a company with high debt and low price to sales is not an ideal choice The high debt level will have to be paid off at some point leading to further share issuance rise in market cap and ultimately a higher price to sales ratio In any case the price to sales ratio used in isolation cannot do the trick One should also analyze other ratios like Price Earnings Price Book and Debt Equity before arriving at any investment decision Screening ParametersPrice to Sales less than Median Price to Sales for its Industry The lower the price to sales ratio the better Price to Earnings using F 1 estimate less than Median Price to Earnings for its Industry The lower the better Price to Book common Equity less than Median Price to Book for its Industry This is another parameter to ensure the value feature of a stock Debt to Equity Most Recent less than Median Debt to Equity for its Industry A company with less debt should have a stable price to sales ratio Current Price greater than or equal to 5 The stocks must all be trading at a minimum of 5 or higher Zacks Rank less than or equal to 2 Zacks Rank 1 Strong Buy or 2 Buy stocks are known to outperform irrespective of the market environment less than or equal to B Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank 1 or 2 offer the best opportunities in the value investing space Here are seven of the 22 stocks that qualified the screening Comcast Corporation NASDAQ CMCSA is a media and technology company with worldwide operations It has three primary businesses Comcast Cable NBCUniversal and Sky The company also provides a wireless phone service under Xfinity Mobile and owns Philadelphia Flyers as well as the Wells Fargo NYSE WFC Center arena in Philadelphia PA This Zacks Rank 1 company has a Value Score of B The 3 5 year EPS growth rate for the stock is estimated to be 12 5 Quanta Services Inc NYSE PWR is a leading national provider of specialty contracting services and one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry Quanta Services has operations in the United States Canada Australia and other selected international markets This Zacks Rank 2 company has a Value Score of A Israel Chemicals Ltd NYSE ICL is a specialty minerals company with worldwide operations The company s products include bromine specialty chemicals potash phosphate fertilizers and specialty performance and industrial products It markets its products primarily in Israel Europe and the Americas The company has an estimated 3 5 year EPS growth rate of 9 5 The stock currently has a Value Score of B and a Zacks Rank 2 Hub Group NASDAQ HUBG is a transportation management company that provides multi modal solutions throughout North America including intermodal truck brokerage dedicated and logistics services The company is one of the largest over the road brokers in North America The stock currently has a Value Score of A and a Zacks Rank 2 You can see Rocky Brands NASDAQ RCKY is a manufacturer and seller of footwear and apparel in the United States Canada and internationally It sells products under the Rocky Georgia Boot Durango Lehigh Creative Recreation and Michelin PA MICP brands The stock currently has a Value Score of A and a Zacks Rank 2 Westlake Chemical Partners LP NYSE WLKP operates acquires and develops ethylene production facilities and related assets in the United States It also sells ethylene co products including propylene crude butadiene pyrolysis gasoline and hydrogen directly to third parties on a spot or contract basis The stock currently has a Zacks Rank 1 and a Value Score of A It has a 3 5 year EPS growth rate of 16 Popular Inc NASDAQ BPOP is a diversified publicly owned bank holding company It engages in providing various retail mortgage and commercial banking products and services primarily to institutional and retail customers The stock currently has a Zacks Rank 2 and a Value Score of A You can get the rest of the stocks on this list by signing up now for your 2 week free trial to the Research Wizard and start using this screen in your own trading Further you can also create your own strategies and test them first before taking the investment plunge The Research Wizard is a great place to begin It s easy to use Everything is in plain language And it s very intuitive Start your trial to the Research Wizard today And the next time you read an economic report open up the Research Wizard plug your finds in and see what gems come out Disclosure Officers directors and or employees of Zacks Investment Research may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material An affiliated investment advisory firm may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material Disclosure Performance information for Zacks portfolios and strategies are available at |
WFC | U S bank regulator will vet next Wells Fargo CEO | By Pete Schroeder and Michelle Price WASHINGTON Reuters A top U S bank regulator said on Wednesday it will vet Wells Fargo NYSE WFC Co s pick for its next chief executive a development that could complicate the scandal hit lender s efforts to find a permanent replacement for CEO Tim Sloan Joseph Otting the Comptroller of the Currency OCC told Congress he would use special legal powers that the regulator typically reserves for overseeing financially troubled lenders to review any proposed candidate But Otting said he does not plan to make findings from the review public despite pressure from U S Senator Elizabeth Warren who pressed him on the issue during a hearing before the Senate Banking Committee At this point in time I do not have plans to release that information Otting told Warren in a heated exchange Warren and other Democratic lawmakers have accused the OCC of being too soft on Wells Fargo a claim Otting disputed on Wednesday Otting said the OCC remains disappointed by the bank s progress on fixing risk management and governance problems that led to a number of customer abuse scandals including in its mortgage and auto lending businesses A spokeswoman for Wells Fargo declined to comment Sloan abruptly departed in late March making him the second CEO to leave Wells Fargo following its sales practice scandal He has said he stepped down because the external attention on him had become a distraction Wells Fargo general counsel C Allen Parker one of the few newcomers in the bank s top ranks is serving as interim CEO Intense congressional and regulatory scrutiny is likely to narrow the field of CEO candidates Wells Fargo s board is looking for an outsider following criticism that company veterans are incapable of turning things around The bank s CEO search is also being hampered by limits on how much it can pay Reuters reported this month Wells Fargo s woes began in September 2016 when the bank admitted it had potentially opened millions of unauthorized accounts Internal and regulatory probes have discovered other issues in the bank s businesses resulting in billions of dollars in fines and penalties
The Federal Reserve has also placed an unprecedented restriction on Wells Fargo to keep it from growing its balance sheet until it proves risk management controls are improved |
WFC | Fingerprints and finances next Wells Fargo CEO will be under regulatory microscope | By Pete Schroeder WASHINGTON Reuters From submitting their fingerprints to giving up their tax records Wells Fargo NYSE WFC Co s next chief executive will go through a vetting process that could rival that of top U S government officials Comptroller of the Currency Joseph Otting said last week he would invoke a little known law to review Wells Fargo s board pick to replace Tim Sloan who in March became the second CEO to leave the bank amid a series of customer abuse scandals Created during the savings and loan crisis the 1989 law allows regulators to vet and veto candidates for senior roles at banks but that power is typically reserved for financially troubled firms Regulatory sources said the review by the Office of the Comptroller of the Currency OCC was so unusual because Wells Fargo the nation s fourth largest lender is both financially sound and so big The CEO candidate must complete a 17 page document detailing their work history qualifications finances and business dealings They must also agree to hand over their tax records provide copies of their fingerprints and possibly submit to a background check according to public OCC documents Otting will have some discretion however as to just how far the agency goes in using its extensive powers to dig into the candidate s background The unusual burden underscores how much work the San Francisco based bank still has to do to regain the trust of its regulators and further raises the bar for its CEO search Finding a new CEO was going to be difficult before but this has made it even harder said Isaac Boltansky director of policy research at Washington based Compass Point Research Trading The difficulty was upped to 10 Regulators expect bank CEOs to be suitable for the top job and do not typically become involved in the selection process That reflects a lack of trust in the institution s ability to solve their problems said Thomas Vartanian a law professor at George Mason University and former OCC official Another former OCC official who spent decades with the agency said he could not recall a comparable case What makes it unusual is it s in a bank of this size said the former official who requested anonymity to discuss an enforcement matter It shows the OCC is taking this seriously Wells Fargo and the OCC declined to comment Spencer Stuart the executive search firm hired to find Sloan s replacement did not respond to requests for comment If Otting decides to use all his powers the vetting process could resemble that undergone by Senate nominated officials Candidates would have to detail a range of firms they are or have been associated with and any parallel discussions with potential rival employers They would also have to disclose if they have been involved in a failed regulatory application such as for a merger or license or associated with a firm that failed defaulted on an obligation or was subject to enforcement actions criminal action litigation or other legal woes The background probe could also draw on information provided by the FBI state regulators the Treasury s anti money laundering bureau the Securities and Exchange Commission and the Department of Homeland Security among others Minor traffic violations need not be included The regulatory and political scrutiny is going to discourage some candidates said Steve Potter CEO of Odgers Berndtson US an executive search firm that has helped other banks hire CEOs Extensive vetting has claimed candidates for government posts including Andrew Puzder U S President Donald Trump s first pick for Labor Secretary He withdrew from consideration in 2017 after it emerged he had employed an undocumented housekeeper The OCC has up to 90 days to screen the bank s pick and discretion to reject them if they do not have the competence experience character or integrity for the job according to the OCC documents Wells Fargo can appeal a rejection Otting has not said if he will use all his vetting powers and can waive those he feels are redundant But he is unlikely to cut corners amid pressure from congressional Democrats who have frequently accused the OCC of being too soft on the industry Boltansky said
Why would Otting use up any of his limited political capital to help a bank that continues to trip on its own shoelaces |
WFC | Are You Looking For A High Growth Dividend Stock Wells Fargo WFC Could Be A Great Choice | All investors love getting big returns from their portfolio whether it s through stocks bonds ETFs or other types of securities But for income investors generating consistent cash flow from each of your liquid investments is your primary focus
While cash flow can come from bond interest or interest from other types of investments income investors hone in on dividends A dividend is the distribution of a company s earnings paid out to shareholders it s often viewed by its dividend yield a metric that measures a dividend as a percent of the current stock price Many academic studies show that dividends account for significant portions of long term returns with dividend contributions exceeding one third of total returns in many cases
Wells Fargo in Focus
Wells Fargo WFC is headquartered in San Francisco and is in the Finance sector The stock has seen a price change of 4 67 since the start of the year Currently paying a dividend of 0 45 per share the company has a dividend yield of 3 73 In comparison the Banks Major Regional industry s yield is 2 8 while the S P 500 s yield is 1 88
Taking a look at the company s dividend growth its current annualized dividend of 1 80 is up 9 8 from last year Wells Fargo has increased its dividend 5 times on a year over year basis over the last 5 years for an average annual increase of 4 27 Future dividend growth will depend on earnings growth as well as payout ratio which is the proportion of a company s annual earnings per share that it pays out as a dividend Right now Wells Fargo s payout ratio is 39 which means it paid out 39 of its trailing 12 month EPS as dividend
Looking at this fiscal year WFC expects solid earnings growth The Zacks Consensus Estimate for 2019 is 4 75 per share representing a year over year earnings growth rate of 10 98
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages investors like dividends for a variety of different reasons But not every company offers a quarterly payout
For instance it s a rare occurrence when a tech start up or big growth business offers their shareholders a dividend It s more common to see larger companies with more established profits give out dividends Income investors must be conscious of the fact that high yielding stocks tend to struggle during periods of rising interest rates With that in mind WFC is a compelling investment opportunity Not only is it a strong dividend play but the stock currently sits at a Zacks Rank of 3 Hold |
WFC | 7 Low Price to Sales Stocks With Value Based Potential | When considering valuation metrics price to earnings ratio has always been the obvious choice This is because calculations based on earnings are easy and come in handy However price to sales has emerged as a convenient tool to determine the value of stocks that are incurring losses or are in an early cycle of development generating meager or no profits While a loss making company with a negative price to earnings ratio falls out of investor favor its price to sales could indicate the hidden strength of its business This underrated ratio is also used to identify a recovery situation or ensure that a company s growth is not overvalued A stock s price to sales ratio reflects how much investors are paying for each dollar of revenues generated by the company If the price to sales ratio is 1 it means that investors are paying 1 for every 1 of revenues generated by the company So it goes without saying that a stock with a price to sales below 1 is a good bargain as investors need to pay less than a dollar for a dollar s worth Thus a stock with a lower price to sales ratio is a more suitable investment than a stock with a high price to sales ratio Price to sales is often preferred over price to earnings as companies can manipulate their earnings using various accounting measures However sales are harder to manipulate and are relatively reliable However one should keep in mind that a company with high debt and low price to sales is not an ideal choice The high debt level will have to be paid off at some point leading to further share issuance rise in market cap and ultimately a higher price to sales ratio In any case the price to sales ratio used in isolation cannot do the trick One should also analyze other ratios like Price Earnings Price Book and Debt Equity before arriving at any investment decision Screening ParametersPrice to Sales less than Median Price to Sales for its Industry The lower the price to sales ratio the better Price to Earnings using F 1 estimate less than Median Price to Earnings for its Industry The lower the better Price to Book common Equity less than Median Price to Book for its Industry This is another parameter to ensure the value feature of a stock Debt to Equity Most Recent less than Median Debt to Equity for its Industry A company with less debt should have a stable price to sales ratio Current Price greater than or equal to 5 The stocks must all be trading at a minimum of 5 or higher Zacks Rank less than or equal to 2 Zacks Rank 1 Strong Buy or 2 Buy stocks are known to outperform irrespective of the market environment less than or equal to B Our research shows that stocks with a Value Score of A or B when combined with a Zacks Rank 1 or 2 offer the best opportunities in the value investing space Here are seven of the 20 stocks that qualified the screening Comcast Corporation NASDAQ CMCSA is a media and technology company with worldwide operations It has three primary businesses Comcast Cable NBCUniversal and Sky The company also provides a wireless phone service under Xfinity Mobile and owns the Philadelphia Flyers as well as the Wells Fargo NYSE WFC Center arena in Philadelphia PA This Zacks Rank 1 company has a Value Score of B The 3 5 year EPS growth rate for the stock is estimated to be 12 8 Quanta Services Inc NYSE PWR is a leading national provider of specialty contracting services and one of the largest contractors serving the transmission and distribution sector of the North American electric utility industry Quanta Services has operations in the United States Canada Australia and other selected international markets This Zacks Rank 2 company has a Value Score of A Israel Chemicals Ltd NYSE ICL is a specialty minerals company with worldwide operations The company s products include bromine specialty chemicals potash phosphate fertilizers and specialty performance and industrial products It markets its products primarily in Israel Europe and the Americas The company has an estimated 3 5 year EPS growth rate of 9 5 The stock currently has a Value Score of A and a Zacks Rank 2 Tutor Perini Corporation NYSE TPC is a construction company It operates worldwide and offers diversified general contracting construction management and design build services to private customers and public agencies The company has an estimated 3 5 year EPS growth rate of 10 The stock currently has a Value Score of A and a Zacks Rank 2 You can see Rocky Brands NASDAQ RCKY is a manufacturer and seller of footwear and apparel in the United States Canada and internationally It sells products under the Rocky Georgia Boot Durango Lehigh Creative Recreation and Michelin PA MICP brands The stock currently has a Value Score of A and a Zacks Rank 2 J Alexander s Holdings NYSE JAX owns and operates restaurants and dining primarily in the United Sates Its four complementary upscale dining restaurant concepts are J Alexander s Redlands Grill Lyndhurst Grill and Stoney River Steakhouse and Grill Stoney River These mainly offer American food The stock currently has a Zacks Rank 2 and a Value Score of A Popular Inc NASDAQ BPOP is a diversified publicly owned bank holding company It engages in providing various retail mortgage and commercial banking products and services primarily to institutional and retail customers The stock currently has a Zacks Rank 1 and a Value Score of B You can get the rest of the stocks on this list by signing up now for your 2 week free trial to the Research Wizard and start using this screen in your own trading Further you can also create your own strategies and test them first before taking the investment plunge The Research Wizard is a great place to begin It s easy to use Everything is in plain language And it s very intuitive Start your trial to the Research Wizard today And the next time you read an economic report open up the Research Wizard plug your finds in and see what gems come out Disclosure Officers directors and or employees of Zacks Investment Research may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material An affiliated investment advisory firm may own or have sold short securities and or hold long and or short positions in options that are mentioned in this material Disclosure Performance information for Zacks portfolios and strategies are available at |
WFC | McIlroy trails leaders by two at Wells Fargo | Reuters Rory McIlroy celebrated his 30th birthday with a three under par 68 in the third round of the Wells Fargo NYSE WFC Championship on Saturday to move within two shots of the leaders at the weather hit event in Charlotte North Carolina
A bogey by Max Homa 70 at the last left him tied at the top on 11 under 202 alongside fellow Americans Jason Dufner 71 and Joel Dahmen 70 while Pat Perez carded a 66 to move up to 10 under
McIlroy who could have had an even better day had his putting been dialled in put together four birdies against a bogey to move to nine under as fans offered up birthday greetings on the stormy day
It s awesome I m really grateful McIlroy said of the greetings I really felt the love out there Celebrate another decade of my life and I get to do it on one of my favorite golf courses in the world it s pretty cool
Homa a former U S collegiate champion seeking his first PGA Tour victory led most of the day until he stumbled at the par four 18th hole
England s Justin Rose 68 is in sixth spot on eight under with compatriot Paul Casey 66 tied for seventh a shot further back
Defending champion Jason Day shot a three over 74 to tumble to nine shots back
McIlroy who had an opening 66 before a poor finish on Friday left him five behind collected three birdies on the back nine after missing several early putting opportunities
He appeared ready for another birdie at the 12th when the horn sounded for the second weather delay
When play resumed an hour later the two time Quail Hollow winner three putted slowing his momentum But he rebounded with consecutive birdies on the 14th and 15th holes
Homa held a three stroke lead at one point but bogeys at the 11th and 18th spoiled what had been a bogey free round
I ve just been asking to have an opportunity like this to just see where my nerves are the 28 year old said of his chances on Sunday
Dahmen had a wild round
He followed a double bogey at the third hole with a bogey at the fifth to go three over before an eagle and birdie got him back to even par
Another bogey at the ninth preceded three birdies in five holes on the back nine Then he bogeyed the 16th
I actually got nervous after I made double I thought I was going to be a lot more nervous in those opening holes and I wasn t said Dahmen who has never won on the Tour |
WFC | Homa wins Wells Fargo Championship by three strokes | Reuters The days of Max Homa feeling an impostor on the PGA Tour are history after he held his nerve during an hour long rain delay before closing out an emphatic three stroke victory at the Wells Fargo NYSE WFC Championship in Charlotte North Carolina on Sunday Long shot Homa silenced a battalion of big guns proving remarkably steady under pressure as he shot a four under par 67 at Quail Hollow to clinch his first victory on the PGA Tour in his 69th career start Hitting a trusty fade with his driver and putting with remarkable precision in a display that suggested he will be no one hit wonder the 28 year old Californian finished at 15 under 269 He capped off his display by sinking a 10 foot putt at the last as two ducks waddled nearby on the fringe of the green oblivious to Homa s life changing moment It s wild I guess my whole world s a little bit different now he told reporters after a performance that earned him a two year PGA Tour exemption along with invitations to this month s PGA Championship and next year s Masters He also vaulted in one fell swoop from 417th to 102nd in the world rankings You dream of having a chance to win and then you get in the moment and you re not sure how you re going to react to that Homa said One of the holes today I felt I was going to throw up but my hands felt unbelievable on the club felt as solid as a rock and golf swing and putting stroke were as good as I could have imagined It means a lot to me to do this under pressure and job security s great I haven t had that before I had some serious scar tissue Fellow American Joel Dahmen who started the day tied for the lead with Homa and Jason Dufner shot 70 to claim second on 12 under Englishman Justin Rose 68 was another shot back in third while Spaniard Sergio Garcia tied for fourth on nine under Dahmen who was also seeking his first tour victory and Rose kept Homa honest but the champion was not to be denied Homa said the experience of playing with two times Quail Hollow champion Rory McIlroy on Saturday had held him in good stead Playing with Rory I was thinking Who the heck am I it s his 30th birthday he s probably going to lap me Homa said I m freaking out After a stellar amateur career that included winning the 2013 American collegiate individual championship Homa took a while to adjust to the professional ranks He failed to keep his card in his first two years on the PGA Tour and wondered if he would ever make it at the highest level When I hit rock bottom I found a shovel and kept digging he said I went to some low low places Very glad I found a ladder and started climbing upwards because it was dark down there
Nobody knew who I was I felt like I was on an island and it was borderline embarrassing at times but it s not anymore |
WFC | Wells Fargo creates new unit focused on regulatory compliance | By Imani Moise Reuters Wells Fargo NYSE WFC Co is creating a new unit tasked with satisfying U S regulatory requirements according to an internal memo seen by Reuters Derek Flowers who has been with the San Francisco based bank for more than two decades will become head of strategic execution and operations and will focus on the bank s regulatory priorities said the memo sent by interim chief executive Allen Parker on Wednesday In his current role as chief credit and market risk officer Flowers would have had frequent contact with regulators The new unit whose creation was reported earlier on Wednesday by the Financial Times will be charged with working through the more than a dozen regulatory consent orders the bank is operating under agreements between regulators and the bank that it will work to satisfy certain requirements It will also implement new business and risk management processes Parker has said he wants to redouble the bank s efforts to satisfy and exceed regulatory expectations Regulators have demanded change from Wells Fargo after employee whistleblowers revealed it had opened potentially millions of unauthorized accounts in 2016 Internal and regulatory probes have since discovered other issues in each of the bank s primary segments resulting in billions of dollars in fines penalties and an unprecedented cap on its balance sheet by the Federal Reserve The bank has said it is committed to compensating all customers affected by its actions and has so far payed out tens of millions of dollars However regulators including the Federal Reserve the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau have publicly criticized the bank s progress within the past month
Wells Fargo has added more than 1 000 jobs to its risk management team and plans to add an additional 1 300 employees this year to help strengthen its compliance efforts it has said |
WFC | All eyes on Woods even if Koepka the one to beat | By Andrew Both Reuters Defending champion Brooks Koepka is the one to beat at this week s PGA Championship even if Tiger Woods will have the boisterous New York galleries on side as one of golf s four major tournaments begins a new era in the spring After being held since 1972 in the dog days of summer the PGA Championship s move to May should ensure milder weather and more attention from U S sports fans whose thoughts by August have invariably turned to American football For the first time ever in a major championship every player ranked in the top 100 in the world will tee it up barring late withdrawals The field will comprise 156 players but 155 of them will be in the supporting cast as one man takes center stage Tiger mania is back in full force after he ended his decade plus major drought by winning the Masters last month and Woods is one of the favorites on a course where he lifted the U S Open trophy in 2002 But big brawny Bethpage a 7 459 yard course in Farmingdale on Long Island is arguably less suited for his 43 year old game than the other major venues this year While not short off the tee Woods is no longer among the game s biggest hitters after his 2017 spinal fusion He may have to let rip with his driver to hoist the Wanamaker Trophy a fifth time adding to his previous successes in 1999 2000 2006 and 2007 Fifty players are averaging 300 yards or more on the PGA Tour this year Woods at 299 yards is respectable but gone are the days when he could overpower a course He now gets the job done the old fashioned way by relentlessly hitting greens in regulation At 75 percent Woods is the year s best on tour at it which could prove decisive at Bethpage Legitimate title chances will line up like jets at nearby JFK airport but anyone with designs on winning will likely have to contend with the quiet assassin Koepka who for all his dominance in recent majors remains less than a crowd favorite Koepka and Woods have developed a close rivalry at the majors with Koepka heading a 1 2 finish at the PGA at Bellerive before Woods turned the tables at Augusta where he clinched his 15th major title The stoic Koepka does not stand out as superior in any single category of the game but is good across the board and his mind is perhaps his best weapon seemingly immune to pressure PUTTING TO MAKE OR BREAK McILROY Others with the goods to contend include Europeans Rory McIlroy Justin Rose Jon Ram and Tommy Fleetwood and Americans Dustin Johnson Justin Thomas and Rickie Fowler McIlroy would likely be the outright favorite if he were not coming off another disappointing Sunday the latest in the final round at the Wells Fargo NYSE WFC Championship where he shot an error strewn closing 73 His putter let him down at Quail Hollow not for the first time If the Northern Irishman can get that right he can win at Bethpage Rahm coming off victory in the two man teams event at the Zurich Classic is tipped to win a major sooner or later The 2016 U S Open winner Johnson needs to add to his single major triumph if he wants to end his career with a haul his talent deserves However difficult predicting the winner expect one of the big names to come through just like the last time the PGA Championship was held on Long Island in 1926 It was won then by one of the greats of the era the legendary hard partying Walter Hagen The total purse then was 11 000
This week s purse has not been announced but it will be about 11 million more than 93 years ago |
WFC | Woods rested and ready for PGA Championship after month off | By Andrew Both FARMINGDALE N Y Reuters Tiger Woods walked into the media interview room at the PGA Championship on Tuesday morning clutching a cup of hot coffee on a cool New York morning He hopes to be holding something far more valuable on Sunday night the Wanamaker Trophy awarded to the winner of the PGA Championship at Bethpage Black Judging by his words the 43 year old is in fine fettle as he prepares for his first tournament start since his Masters victory exactly one month ago Woods raised some eyebrows when he decided to skip the Wells Fargo NYSE WFC Championship two weeks ago thereby ensuring he would turn up this week without any competitive action between Augusta and Bethpage On Tuesday he erased concerns that there might be any physical issues behind his decision to play back to back majors without a tune up gallop in between To be honest I wasn t ready yet to start the grind of practising and preparing and logging all those hours again he said I was lifting weights feeling good in the gym but I wasn t prepared to log in the hours Coming here is a different story I feel rested and ready I ve done a lot of the leg work and hard work already trying to find my game over the past year and a half Now it s just maintaining it Woods Masters victory came two years after a spinal fusion that resurrected a career in danger of ending prematurely Instead he notched one of the great comebacks of sporting history ending a decade long major drought and collecting his 15th major title Northern Ireland s four times major champion Rory McIlroy said on Tuesday I still don t think people understand what he Woods did in April and coming back and with everything that he s been through Whether it s the greatest comeback in sports that s probably up for debate but from what I ve experienced and the things that he said when I ve been around him that s unbelievable Three times major winner Padraig Harrington meanwhile was impressed with the way Woods played within himself and closed out his one shot Masters win in clinical fashion He wasn t interested in proving to the world that he s a good driver of the ball or anything like that the Irishman added He just was interested in getting the job done Woods for his part knows he has to play and practise without pushing his body too hard That s the fickle nature of having my back fused he said Some days I have more range of motion some days I don t I can t spend every day working on every part of my game and so I end up spending a lot of time on my short game pitching and putting
I don t load the body like I used to and be explosive on the range Those days are gone |
WFC | Wells Fargo WFC Is A Top Dividend Stock Right Now Should You Buy | All investors love getting big returns from their portfolio whether it s through stocks bonds ETFs or other types of securities But for income investors generating consistent cash flow from each of your liquid investments is your primary focus
Cash flow can come from bond interest interest from other types of investments and of course dividends A dividend is that coveted distribution of a company s earnings paid out to shareholders and investors often view it by its dividend yield a metric that measures the dividend as a percent of the current stock price Many academic studies show that dividends account for significant portions of long term returns with dividend contributions exceeding one third of total returns in many cases
Wells Fargo in Focus
Wells Fargo WFC is headquartered in San Francisco and is in the Finance sector The stock has seen a price change of 1 5 since the start of the year The biggest U S mortgage lender is paying out a dividend of 0 45 per share at the moment with a dividend yield of 3 85 compared to the Banks Major Regional industry s yield of 2 87 and the S P 500 s yield of 1 9
Taking a look at the company s dividend growth its current annualized dividend of 1 80 is up 9 8 from last year Over the last 5 years Wells Fargo has increased its dividend 5 times on a year over year basis for an average annual increase of 4 27 Any future dividend growth will depend on both earnings growth and the company s payout ratio a payout ratio is the proportion of a firm s annual earnings per share that it pays out as a dividend Wells Fargo s current payout ratio is 39 This means it paid out 39 of its trailing 12 month EPS as dividend
Looking at this fiscal year WFC expects solid earnings growth The Zacks Consensus Estimate for 2019 is 4 84 per share representing a year over year earnings growth rate of 13 08
Bottom Line
Investors like dividends for many reasons they greatly improve stock investing profits decrease overall portfolio risk and carry tax advantages among others However not all companies offer a quarterly payout
Big established firms that have more secure profits are often seen as the best dividend options but it s fairly uncommon to see high growth businesses or tech start ups offer their stockholders a dividend Income investors have to be mindful of the fact that high yielding stocks tend to struggle during periods of rising interest rates With that in mind WFC is a compelling investment opportunity Not only is it a strong dividend play but the stock currently sits at a Zacks Rank of 3 Hold |
WFC | 5 Best No Load Mutual Funds Of Q1 | In the first quarter of 2019 the Dow the S P 500 and the Nasdaq rallied 11 2 13 1 and 16 5 respectively This marked the S P 500 s best quarterly rise since the third quarter of 2009 Global economic woes and fears related to Brexit weighed on investors Given the negative outlook no load mutual funds are once again in the spotlight Mutual funds with no sales or commission charges are known as no load funds This generally happens when funds are traded directly through the investment company and not through some secondary entity This implies that they do not carry the burden of management funds unlike funds with entry or exit loads It comes as no surprise that no load funds have managed to provide better returns over their load peers so far this year IMF Lowers Global Growth Projections for 2019On Apr 9 the International Monetary Fund IMF reduced its global growth forecast for this year once again The international lending agency believes that factors such as monetary tightening by the Federal Reserve and trade conflicts could impede global growth in the days to come The IMF lowered the 2019 growth forecast to 3 3 from 3 5 its lowest projection since the financial crisis and the third downgrade in the past six months Speaking at a news conference in Washington the IMF chief economist Gita Gopinath stated that this was a delicate moment for the global economy The IMF is of the view that global stimulus measures is the need of the hour and would go a long way in safeguarding the economies across the globe from shocks of an inevitable downturn Furthermore the economist believes that that a dovish monetary approach would also be needed to counter the slowdown According to the IMF weakness in developed economies including leading members of the EU would contribute the most to a global meltdown Why Invest in No Load Funds No load funds are those that do not bear any sales or commission charge at the time of buying or selling funds This generally happens when funds are traded directly through the investment company and not through some secondary entity Sales load is normally divided into front end sales load and back end sales load Front End Sales Loads These are fees that an investor must pay at the time of investment Also categorized as Sales Charge Load on Purchases these are charges an investor pays while purchasing a fund The front end sales load is deducted from the actual invested amount and the remaining portion is actually used to buy funds Back End Sales Loads These are fees that an investor must pay while selling the investments Categorized as the Deferred Sales Charge Load these fees are deducted while redeeming fund shares The advantage of back end sales load over front end sales load is that the entire capital minus other charges is invested at the time of purchases The sales load here is calculated off the initial investment made and not based on the ultimate fund value 5 Best Fund ChoicesGiven such circumstances we have highlighted five no load mutual funds These funds also carry a Zacks Mutual Fund Rank 1 Strong Buy or 2 Buy Moreover these funds have encouraging three and five year returns Additionally the minimum initial investment is within 5000 We expect these funds to outperform their peers in the future Remember the goal of the Zacks Mutual Fund Rank is to guide investors to identify potential winners and losers Unlike most of the fund rating systems the Zacks Mutual Fund Rank is not just focused on past performance but also on the likely future success of the fund The question here is why should investors consider mutual funds Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds read more AB Discovery Growth Advisor fund seeks capital growth for the long run CHCYX maintains a diversified portfolio by investing in equity securities of small and mid cap companies For the fund s investment purpose those small and mid cap companies that are chosen come within the market cap range of lowest 25 of the overall UNITED STATES equity market This Sector Mid Cap Blend product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 19 6 and 10 7 respectively To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds CHCYXhas a Zacks Mutual Fund Rank 1 and an annual expense ratio of 0 72 which is below the category average of 1 19 Wells Fargo NYSE WFC CoreBuilder Shares Series M fund seeks maximization of returns through growth of income and capital WFCMX invests more than 60 of its assets in municipal securities which offer federal income tax exempted interest This Sector Govt Mtge Intermediate product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 3 7 and 4 8 respectively To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds WFCMXhas a Zacks Mutual Fund Rank 2 and an annual expense ratio of 0 00 which is below the category average of 0 75 Fidelity Select Health Care Portfolio fund seeks capital appreciation by and is managed by Fidelity Group The fund normally invests a bulk of its assets in common stocks of companies principally engaged in the design manufacture or sale of products or services used for or in connection with health care or medicine This Sector Health product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 14 6 and 11 2 respectively To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds FSPHXhas a Zacks Mutual Fund Rank 1 and an annual expense ratio of 0 73 which is below the category average of 1 26 Fidelity Select Medical Equipment and Systems Portfolio fund invests the bulk of its assets in securities of companies that focus on research development manufacture distribution supply or sale of medical equipment and devices and related technologies The fund invests in securities of U S and non U S companies This Sector Health product has a history of positive total returns for over 10 years Specifically the fund s returns over the three and five year benchmarks are 22 9 and 18 1 respectively FSPHXhas a Zacks Mutual Fund Rank 1 and an annual expense ratio of 0 76 which is below the category average of 1 26 Fidelity Balanced Fund aims for income and capital growth that is on par with reasonable risk The fund usually invests the majority of its assets in stocks and other equity securities and the rest in bonds and other debt securities This Zacks sector Allocation Balanced product has a history of positive total returns for more than 10 years Specifically the fund s returns over the three and five year benchmarks are 9 8 and 7 5 respectively To see how this fund performed compared in its category and other 1 and 2 Ranked Mutual Funds FBALXhas a Zacks Mutual Fund Rank 1 and an annual expense ratio of 0 53 which is below the category average of 0 82 Want key mutual fund info delivered straight to your inbox Zacks free Fund Newsletter will brief you on top news and analysis as well as top performing mutual funds each week |
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