Latest news with #USbanks
Yahoo
2 days ago
- Business
- Yahoo
July Fed meeting & interest rates: What it means for your money
Mind Your Money host Allie Canal discusses the expectations for the Federal Reserve's next meeting on interest rates in July and what that means for your money. To watch more expert insights and analysis on the latest market action, check out more Mind Your Money here. The Federal Reserve is widely expected to hold interest rates steady at its July meeting, keeping rates in a range between 4.25 and 4.5%. But what does that mean for your money? Well, it depends on your financial situation and your fi- financial goals. The Fed's benchmark rate, known as the federal funds rate, it's set roughly once a month, and it influences something called the prime rate. The prime rate is what commercial banks charge their most credit-worthy customers. Your personal interest rate for things like loans or credit cards is based on that, along with your credit score and history. When the Fed raises rates, the prime rate tends to rise, when the Fed cuts, it usually falls, too. The Wall Street Journal publishes the most commonly used version of the prime rate, surveying the 10 largest US banks to get it. So, what does this mean for savers? Well, when the Fed keeps rates high, banks often raise deposit rates to compete for customer cash, meaning you could earn more interest on your balance. Certificates of deposit or CDs may offer particularly attractive rates, though they're still below the peaks we saw in 2022. If your bank starts lowering rates or if you're opening a new account, it may be worth shopping around. On the flip side for borrowers, higher rates mean you'll pay more if you carry a balance on a credit card or take out a new loan. Mortgage rates are indirectly tied to Fed policy, and while the Fed is expected to hold steady until at least September, that still means home buyers are looking at mortgage rates hovering around 7%. Related Videos Alphabet earnings checklist: 3 things to watch for DJT stock jumps as bitcoin treasury holdings top $2B JPM's Michele Doesn't Expect a Big Bond Market Selloff Why Nextdoor is having a founder-led re-founding moment Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-07-2025
- Business
- Yahoo
Inflation data, big bank earnings, and Netflix results: What to watch this week
Stocks are back near record highs, but a flurry of trade announcements, deals, and extensions kept investors on their toes last week. In the week ahead, a busier economic and earnings calendar will offer them more to chew on. Inflation data out Tuesday morning will set the economic agenda for the week. The Consumer Price Index (CPI) will be a key data point for investors and policymakers to weigh, with the Federal Reserve's next interest rate decision looming less than two weeks away. On the earnings side, all the major US banks will report results this week, with renewed investor enthusiasm about the IPO and M&A markets, along with Wells Fargo's (WFC) freedom from a decade of more stringent regulatory restrictions, likely to feature. Results from Netflix (NFLX) will kick off earnings from big US tech firms, with ASML (ASML) and Taiwan Semiconductor Manufacturing (TSM) set to offer key updates on the AI-related chip boom. PepsiCo (PEP), United (UAL), and American Express (AXP) are among the other notable firms set to release their quarterly results. Data from FactSet published July 3 showed analysts are coming into second quarter earnings season expecting 5% earnings growth for the S&P 500 (^GSPC). Should this forecast come through, it will mark the slowest pace of profit growth since the fourth quarter of 2023. The second quarter includes the peak of tariff-related uncertainty — Trump's shocking "Liberation Day" announcement took place on the second day of the quarter. But the market's recent rally suggests the backward-looking set of results companies will roll out in the weeks ahead have already been discounted. In the third quarter, analysts are expecting earnings will grow 7.3% over last year. Full-year profit growth is expected to clock in at 9%, according to FactSet data. In 2026, earnings should grow 13.9%, according to analyst forecasts. Second quarter earnings, then, appear set to reflect the trough of corporate America's mini-cycle of panic, acceptance, then relief around Trump's tariff goals, the whole of which took about five weeks in April and May. This week, as Trump again rolled out tariff announcements that left some of America's trading partners surprised, investors largely took the news in stride. The worst, it seems, is past us. New tariffs announced on Canada late Thursday and Trump's decision to float higher blanket tariffs on all US imports contained echoes of the headlines that shook markets earlier this year. This time, the reverb barely disrupted the market's rhythm. Read more: What Trump's tariffs mean for the economy and your wallet As the president himself told NBC News last week, "I think the tariffs have been very well received. The stock market hit a new high [on Thursday]." And the S&P 500 fell just 0.33% from its record on Friday. With investors — and the president — waiting with bated breath for the Federal Reserve to begin cutting interest rates, Tuesday's inflation data isn't likely to accelerate the central bank's urgency. Wall Street economists expect to see inflation move further from the Fed's goals, with "core" consumer prices, which exclude food and gas and are more closely watched by the Fed, set to rise 2.9% over the prior year in June. On a monthly basis, both "core" and headline inflation is set to rise 0.3%. Read more: How jobs, inflation, and the Fed are all related "Inflation data in line with our forecasts will keep the Federal Reserve on the sidelines as it assesses the impact of tariffs on inflation, which is only starting to come into view," wrote economists at Oxford Economics in a client note on Friday. The firm also noted the disinflationary benefit of lower oil prices that followed the onset of tariffs in the spring is rolling off the books. All of which, in Oxford's view, likely keeps the Fed on the sidelines at least through the summer. Data from the CME Group as of Friday showed traders were pricing in just a 4.7% chance the Fed cuts rates later this month. A month ago, those odds were closer to 20%. Trump, however, has remained consistent in his calls for lower rates, telling reporters this week he thinks Fed Chair Jerome Powell should resign immediately. The challenge, for both Trump and the Fed, is that tariff policy only complicates the rate picture. "The tariffs announced this week would raise the effective rate by around 2 [percentage points]," wrote Bank of America economist Aditya Bhave in a client note Friday. "Based on the composition of imports over the last 12 months, the effective rate would rise to nearly 14%. In other words, there are upside risks to our base case that the effective tariffs will settle at around 10%." And although Bhave notes there appears room for tariff rates to be negotiated down, this policy uncertainty makes it harder for the Fed to cut interest rates. "Chair Powell has repeatedly argued that the Fed wants greater clarity on the impact of policy changes before making its next move," Bhave added. "Such clarity might not be forthcoming if there are risks of additional meaningful changes to the tariff regime." This year's stock market volatility has created an ample — if not quite equal — amount of volatility in Wall Street forecasts on where the market will finish the year. Last week offered the latest case in point. Strategists at both Goldman Sachs and Bank of America raised their price targets on the S&P 500 in notes this week, with Goldman raising its year-end target to 6,600 and BofA putting a 6,300 forecast on where the benchmark index will close this year. The firms had been looking for the index to settle at 6,100 and 5,600, respectively, ahead of these revisions. The S&P 500 closed on Friday at 6,259. In a note to clients published Tuesday, Bank of America's head of US equity strategy, Savita Subramanian, cited "Corporate America Exceptionalism" as a driving force in revising the outlook for stocks higher. In essence, the S&P 500 is now constituted by businesses with stronger earnings profiles that are better able to weather the uncertainty of tariffs and which are, ultimately, less sensitive to the economic cycle. All of which bolsters the case for earnings growth to remain strong. In the second quarter, the Communication Services (XLC) and Technology (XLK) sectors are expected to grow earnings by 29.5% and 16.6%, respectively. These sectors house five of the "Magnificent Seven" names — Amazon (AMZN) and Tesla (TSLA) are in the Consumer Discretionary (XLY) sector — and are at the center of the AI trade. Only Utilities (XLU), another sector that's been a surprise AI beneficiary with power demand surging as data centers are built out, is expected to grow earnings at a rate equal to or better than the overall index; both Utilities and the S&P 500 as a whole are forecast to grow earnings 5% in the second quarter. And over the long term, the most important driver of stock prices is earnings growth. Goldman Sachs' chief US equity strategist David Kostin made a similar point, writing that the firm expects "the digestion of tariffs to be a gradual process, and large-cap companies appear to have some buffer from inventories ahead of the increase in tariff rates." The firm added that S&P 500 companies appeared to enter the second quarter with a good inventory buffer, and that earnings call commentary "shows S&P 500 firms plan to use a combination of cost savings, supplier adjustments, and pricing to offset the impact of tariffs." An outgrowth, no doubt, of corporates being more prepared for Trump's tariff-motivated fiscal policy the second time around. But it is the composition of the S&P 500 itself — an index now dominated by a handful of tech-adjacent giants — that ultimately buffers investors from much of the tariff turmoil. Earnings: No major earnings reports set for release. Economic data: No major economic data set for release. Earnings: JPMorgan (JPM), Citi (C), Wells Fargo (WFC), BlackRock (BLK), State Street (STT), Bank of New York Mellon (BK), Albertsons (ACI), JB Hunt (JBHT) Economic data: Consumer Price Index, month-over-month, June (+0.3% expected, +0.1% previously); Consumer Price Index, year-over-year, June (+2.6% expected, +2.4% previously); "core" Consumer Price Index, month-over-month, June (+0.3% expected, +0.1% previously); "core" Consumer Price Index, year-over-year, June (+2.9% expected; +2.8% previously); NY Fed Empire State Manufacturing index, July (-9 expected, -16 previously) Earnings: Bank of America (BAC), Goldman Sachs (GS), Morgan Stanley (MS), PNC Financial (PNC), Johnson & Johnson (JNJ), United Airlines (UAL), ASML (ASML), Progressive (PGR), Alcoa (AA), Kinder Morgan (KMI) Economic data: Producer price index, month-over-month, June (+0.3% expected, +0.1% previously); Producer price index, year-over-year, June (+2.5% expected, +2.6% previously); "Core" producer price index, month-over-month, June (+0.2% expected, +0.1% previously); "Core" producer price index, year-over-year, June (+2.7% expected; +3% previously); Industrial production, June (+0.1% expected, -0.2% previously); Federal Reserve Beige Book Earnings: Netflix (NFLX), Taiwan Semiconductor Manufacturing (TSM), PepsiCo (PEP), US Bancorp (USB), Abbott (ABT), Cintas (CTAS), Interactive Brokers (IBKR) Economic data: Retail sales, June, month-over-month (+0.1% expected, -0.9% previously); Retail sales, ex-auto and gas, June (+0.3% expected, -0.1% previously); Import price index, June (+0.2% expected, +0% previously); Initial jobless claims, week ended July 12 (235,000 expected, 227,000 previously); Philly Fed Manufacturing Index, July (-0.5 expected, -4 previously); Homebuilder sentiment, July (33 expected, 32 previously) Earnings: 3M (MMM), American Express (AXP), Charles Schwab (SCHW), Ally (ALLY), Truist (TFC), Regions Financial (RF), Huntington Bancshares (HBAN) Economic data: Housing starts, June (+3.5% expected, -9.8% previously); Building permits, June (-0.3% expected, -2% previously); University of Michigan consumer sentiment, July, preliminary reading (61.5 expected, 60.7 previously) Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
13-07-2025
- Business
- Yahoo
3 Things Analysts Are Watching as Earnings Season Gets Rolling This Week
Earnings season starts this in earnest this week with the arrival of several quarterly reports from big U.S. banks. Analysts are watching themes including the expectation of continued growth and the effect of tariffs on corporate results. Key results due to arrive include JPMorgan Chase, Morgan Stanley, PepsiCo, and big-bank earnings reports due this week mark the quasi-official start to the second-quarter earnings season. Analysts expect growth, but they're also eyeing the effects of tariffs as President Donald Trump's trade policy continues to evolve. The numbers are landing with plenty already on investors' minds, from ongoing trade-policy drama to questions about the path forward for interest rates. Stocks have risen lately, finishing last week just off record highs. Big banks including JPMorgan Chase (JPM) and Morgan Stanley (MS) could offer insight into consumer health and the appetite for deals. Other companies that will likely offer clues about broader themes include consumables giant PepsiCo (PEP) and chipmaker TSMC (TSM). Netflix (NFLX) is also set to report, making it the first of the "FANG" (and, for that matter, "FAANG") stocks to deliver its numbers. Here are three themes to watch for as results for the quarter—covering April through June in most cases—start to roll in. Analysts are looking for growth. S&P 500 EPS is seen rising 4.1% year-over-year, according to a recent report from UBS; companies that have already reported their numbers, the bank observed in late June, have beaten estimates by more, on average, than the longer-term trend. Historically, UBS said, expectations 'start too high, are adjusted lower heading into reporting season, and could come in slightly higher vs. expectations.' S&P 500 companies reported double-digit year-over-year earnings growth in the first quarter for a second-straight period, according to FactSet. There are also signs of caution. Wall Street analysts cut their estimates for S&P 500 companies' earnings more than usual during the second quarter, according to a FactSet analysis published July 3. The combined bottom-up earnings-per-share estimate for the companies in the index fell more than 4% between the end of March and the end of June, FactSet said, more than the average seen in the past 5, 10, or 15 years. (It was in line with the average for the past 20 years.) Trump's tariffs are likely to be a hot topic. Deutsche Bank analysts on July 7 estimated that tariffs will ding second-quarter earnings for the S&P 500 by about 2 percentage points, with the 'hit' likely to increase in the second half of the year. Companies with 'concentrated tariff effects' account for about a quarter of S&P 500 earnings, according to Deutsche Bank. Goldman Sachs economists expect companies to pass 70% of direct costs associated with tariffs to consumers in the form of higher prices. 'Economic fundamentals appear solid at this juncture, but uncertainty is pervasive,' National Retail Federation Chief Economist Jack Kleinhenz said last week. 'Everyone is sorting through what the tariff rates are going to be, how they will impact inflation for retail products and, importantly, how long they will be in place.' Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-07-2025
- Business
- Yahoo
The Securities That Banks Are Backing Away From: Credit Weekly
(Bloomberg) -- US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.'s lead and retreating from the securities, even as investors are eager to buy them. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis. At the same time, preferred managers have received more cash to invest this year, as investors pile into higher-yielding assets that can perform well when rates are cut. Assets under management in the 10 largest funds in the space have risen by more than 10% on average year-to-date, based on Bloomberg-compiled data. Capital One's redemption follows JPMorgan cutting its preferreds outstanding by more than a quarter last year. Banks are broadly paying off the securities because they don't need as many of them anymore: capital regulations that made preferred shares attractive to issue, including the Basel III endgame rules, are being eased now in the US. The securities are expensive for banks, because they pay relatively high dividends. But banks were among the few companies still selling preferred equities, a sort of equity with some debt-like characteristics, that helped finance the industrialization of America. For earlier generations of investors, the securities were an attractive source of income, offering more than a company's notes would pay, but also coming with more risk. If the company fell on hard times, preferreds were close to the back of the line to be repaid, for instance. Non-financial companies have been backing away from preferreds, in favor of securities known as 'hybrid bonds.' Hybrids are among the last bonds to be repaid if a company runs into trouble, but aren't as far back in line as preferreds, which are equity. Issuance became viable for companies once Moody's Ratings changed its methodology in early 2024 and the securities quickly became one of the hottest sources of capital-raising in the US. With preferreds growing less popular, the managers of the largest preferred-focused funds are looking for alternatives. They are banking on the relatively high leeway they have to invest in securities similar to preferreds, such as hybrid bonds. 'That's the nice thing about our universe. When people talk about preferred securities, the definition is very grey,' said Douglas Baker, head of preferred securities at Nuveen. 'If things get tight in one area, we typically have plenty of places to pivot to,' he said. It's a view shared by Mark Lieb, founder and CEO of Spectrum Asset Management and a veteran of the preferred market, who expects the supply of hybrids from US utilities to expand in order to cover the growing demand for infrastructure investments supporting AI. That growth can outweigh any loss of issuance from US banks, as their regulatory needs keep decreasing. 'We will have to see what the final rules and regulations are but on the utility side it's going to more than offset it,' Lieb said in an interview. 'Capex is going to go up.' Non-financial corporates in the US sold about $30 billion of hybrids last year, with another $10 billion sold so far in 2025, data compiled by Bloomberg shows. This far exceeded what was repaid through the exercise of call options. Week In Review JPMorgan Chase & Co. helped Warner Bros. Discovery Inc. restructure its debt by offering creditors a deal that would leave them with billions less than they were owed, despite the notes having an investment-grade rating. A trio of banks joined Morgan Stanley in a $5 billion debt deal for xAI Corp., after the company requested their participation to maintain relationships that could help with financings down the line. New World Development Co. closed a record $11 billion refinancing deal, averting a potential crisis in Hong Kong's fragile property market. SoftBank Group Corp. sold $4.2 billion of bonds in dollars and euros, as the technology investment firm turns to global debt markets to accelerate its artificial intelligence push. JPMorgan Chase & Co. and UBS Group AG are among a group of Wall Street banks sounding out investors ahead of a mid-July launch for a $4.25 billion debt package backing Sycamore Partners' buyout of UK pharmacy Boots. The European Central Bank held onto two bonds of embattled payments company Worldline SA while prices slumped after news reports alleging the company covered up fraud by some of its customers. Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, aiming to raise at least $750 million in the high-yield bond market. Flora Food Group BV is the first issuer in Europe rated one of the lowest levels of junk to sell bonds in nearly a year, a sign of investors' insatiable appetite for risk. Vodafone Group Plc pulled in multi-billion investor bids across a multi-currency debt sale, the proceeds of which will be used to finance a sweeping €2 billion ($2.35 billion) debt buyback. Wolfspeed Inc., a chipmaker caught in President Donald Trump's push to reshape Biden-era tech subsidies, filed for bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt. AMC Entertainment Holdings Inc. said it reached an agreement with creditors to end litigation that resulted from the movie theater chain's debt restructuring last year. Merit Street Media, the startup founded by celebrity psychologist Phil McGraw, filed for bankruptcy in Texas. On the Move Josh Harris' 26North Partners is hiring bankers from JPMorgan Chase & Co. and Deutsche Bank AG as it continues to grow its investment-grade bets. The platform has tapped Todd Marr, formerly global head of debt private placements at JPMorgan, and Ravi Suresh, former head of insurance private asset solutions at Deutsche. BNP Paribas hired Denise Chow from Morgan Stanley's leveraged finance team, one in a string of recent moves across lenders' debt capital markets desks. Uros Stosic, a longtime leveraged loan trader, left Morgan Stanley to join Truist Financial Corp.'s team in New York as a managing director. He reports to Eddie Ferguson, head of loan and sales trading. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too For Brazil's Criminals, Coffee Beans Are the Target America's Top Consumer-Sentiment Economist Is Worried Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Bloomberg
05-07-2025
- Business
- Bloomberg
The Securities That Banks Are Backing Away From: Credit Weekly
US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co. 's lead and retreating from the securities, even as investors are eager to buy them. Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis.
