Posted On: 07/14/2014 2:09:12 PM
Post# of 63863
TRADING-RELIANT BANKS SUFFER
FT’s Michael Mackenzie and Nicole Bullock: “Equity investors are marking down US banks that rely on trading revenues and international operations, rewarding the stronger growth prospects of domestic oriented and consumer-focused financials as earnings season heats up … Investors are braced for disappointing results from financials as analysts expect earnings for the sector will contract 3.9 per cent for the second quarter compared with the same period a year ago.
Within the broad financials group, however, there is a clear divergence between banks with a strong trading and global presence versus the domestic players that cater to commercial and retail customers across the US.
“The outperformance of domestic-orientated banks reflects a pick-up in the US economy, while banks with capital market franchises have suffered from a drop in trading volumes and tougher regulations. … This is illustrated by the share price for Wells Fargo, which is has risen 13 per cent so far this year, while Goldman Sachs is down 7 per cent and Citigroup has dropped nearly 10 per cent. Shares in JPMorgan Chase have fallen about 5 per cent, with Bank of America Merrill Lynch, which is primarily domestic though it has large trading operations, down just over 1 per cent in the year to date and Morgan Stanley flat.”
http://on.ft.com/U2NxMS
FT’s Michael Mackenzie and Nicole Bullock: “Equity investors are marking down US banks that rely on trading revenues and international operations, rewarding the stronger growth prospects of domestic oriented and consumer-focused financials as earnings season heats up … Investors are braced for disappointing results from financials as analysts expect earnings for the sector will contract 3.9 per cent for the second quarter compared with the same period a year ago.
Within the broad financials group, however, there is a clear divergence between banks with a strong trading and global presence versus the domestic players that cater to commercial and retail customers across the US.
“The outperformance of domestic-orientated banks reflects a pick-up in the US economy, while banks with capital market franchises have suffered from a drop in trading volumes and tougher regulations. … This is illustrated by the share price for Wells Fargo, which is has risen 13 per cent so far this year, while Goldman Sachs is down 7 per cent and Citigroup has dropped nearly 10 per cent. Shares in JPMorgan Chase have fallen about 5 per cent, with Bank of America Merrill Lynch, which is primarily domestic though it has large trading operations, down just over 1 per cent in the year to date and Morgan Stanley flat.”
http://on.ft.com/U2NxMS
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