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Banks

SHORT the Land of the Rising BanksSince the Bank of Japan shocked global markets in December ‘22 by widening the Yield Curve Control trading band on 10Y JGB yields from 0.25% → 0.5%, TOPIX Banks have been on a one-way surge upward. TSE:T17B index rallied +7% on the day of the policy meeting, and +25% within days thereafter. The three Japanese mega banks Mitsubishi UFG (TSE:8306, NYSE:MUFG), Sumitomo Mitsui Financial Group (TSE:8316, NYSE:8316), and Mizuho Financial Group (TSE:8411, NYSE:MFG) are hitting half-decade highs - but this is nonetheless a broad-based and nearly indiscriminate rally within the overall sector, as smaller regional banks participate in the upside. The fundamental reason for the rally is simply due to the Bank of Japan steepening the previously (and still) pancake-flat yield curve by lifting the ceiling on 10Y yields, while leaving their front-end policy rate at -0.1%. A steeper JGB yield curve “means” more favorable Net Interest Margins (NIM) for these lenders. There have been all sorts of analyst estimates and calculations of just how much of a positive boost to earnings this will be - and perhaps this will indeed come to fruition. However, the long end of the JGB curve suddenly and sharply rising can be a double-edged samurai sword- while banks may benefit from higher NIM, they are also taking massive unrealized marked-to-market losses on those very JGB holdings. Meanwhile, the Bank of Japan has kept firm on YCC at their latest January policy meeting. Furthermore, they have been targeting much of their JGB buying (ex the 10Y) at the 2Y ~ 5Y tenors, and JGB 2Y and 5Y yields have been cut in half from recent peaks as a result. TOPIX Banks index, especially Mizuho shares, have been closely correlated to the 5Y JGB yield - particularly since the December 2022 BOJ surprise rally. Yet, while these banks shares’ rallies have paused, they have not followed 5Y JGB yields downward. The BOJ has (for now) put a halt on an ever-rising / steepening JGB curve- giving banks +25bps (and falling as of this writing) “extra” on the long end for their NIM spread. Also with BOJ policy, there is still a negative policy rate imposed upon these banks. Earnings for these banks are coming up next week, starting at the beginning of February. There is a LOT of assumed lofty upside of NIM currently priced into these shares. If they don’t at least MEET these expectations (and according to Bloomberg articles, it seems the executives of the big three are less excited than markets are of earnings upside), swift profit taking can ensue. If they not only fail to meet lofty expectations, but instead report major unrealized losses on their JGB holdings (after taking huge losses on their foreign bond holdings throughout 2022), swift profit taking can ensue. If swift profit taking ensues, (other/additional) swift profit taking can ensue. Japan - “land of the rising yields” is now in reversal - with a major dislocation in the otherwise historically lockstep bank shares vs JGB yields. A fundamental reality check from earnings may be what it takes to whack shares back into place. Note - this is obviously not trading advice - and as I always repeat in my videos: If you listen to me, you will lose all your money. If you use me as a reverse indicator, you will still somehow lose all your money. And the reason is very simple: I am a very stupid person, and these are very stupid thoughts. Clear? So, with that said, here’s what I have been doing (and again, if you wish to apply any of it, please do so if you hate money). I had been long MUFG since Dec BOJ Meeting to ride the momentum, and closed out my long on Mon Jan 16th (day before Jan BOJ) for a +21% return in something like 15 trading days - and closed out the trade on the thesis of “no change for Jan BOJ meeting” - which then came to fruition, and MUFG fell -5% thereafter. I am using my gains (“house money”) and am now long puts on these banks with post earnings expiry. Of the three mega banks, I hate Mizuho Financial Group (TSE:8411, NYSE:MFG) the most. And I am FAR from any sort of financial analyst - I am basing this on the JGB 5Y correlation, as well as Mizuho ATM machines having eaten my ATM card TWICE ← prob little to do with stock price action.
TSE:T17BShort
by acrossthespread
BTC recovering all gains after COVID I have few historical lines here: 2017 ATH is broken now BBWP expansion on weekly started with South direction and will continue COVID Nuke dump bottom and two lines of retrace bounces after recovery Basically, Im looking that big chunk of gains will be recovered ( if we can use this bear word today) Im looking that we will stuck for another 12-24 months in this swamp, unless we have angels to help humanity in March 2023... yeah yeah, 23rd March 2023 is the day. What will happen? only stars know, but humanity will rise against bankers, politicians and corporations, it will be the time of implementation of CBDC around the world and beginning of revolution against of it. We know that every action and event has apposite movement of the event and action, we call it karma. then stronger is the motive, then stronger is resistance. How much over a last 120 years we accumulated resistance against fiat and banks? Next few years will show us. Stay safe.
COINBASE:BTCUSD
by OlegDC
Citigroup: Low Risk Puts TradeRight now the Puts for Citi expiring months out are very cheap and if we look slightly OTM we can see a put option expiring Mar 17th at the strike of $42.5 trading at under 40 cents. I could easily buy a bunch of these at a low risk and just see how it goes and that's what i will be doing. On the other end of things i will be hedging against my overall bearish stance by buying 5% of the amount of puts i buy in calls in the form of the Mar 17th strike of $50 calls selling for under $1.71 a piece.
NYSE:CShort
by RizeSenpai
Bank of America's profit faltered by 14% in 2022Another big bank that reported its earnings on the past Friday is Bank of America. The bank generated $27.5 billion in net profit and $95 billion in revenue for the full-year 2022. Its net income decreased by 14%, and revenue rose by 6.6%. The net interest income jumped by 22%, and the noninterest income dropped by 8%. The Consumer Banking segment added over 1 million checking accounts and reached a record of 3.5 million consumer investment accounts. At the same time, it experienced net inflows from clients worth $28 billion and a jump in digital sales by 22% versus 2021. The Global Banking division experienced a 38% increase in revenue and saw a growth in average loans and leases of 14%. BofA’s Global Wealth and Investment Management segment gained more than 119 000 accounts and saw $87 billion in client inflows for the entire year. More importantly, it is on a streak of 51 consecutive quarters of average loan and lease growth. The Global Markets division saw the highest revenue and sales since 2010. In addition to that, its average loans grew by 28% year over year. Illustration 1.01 Illustration 1.01 shows the daily chart of Bank of America stock, which declined more than 26% in 2022. 2022 (full-year) vs. 2021 (full-year) Net income = $27.5 billion (vs. $32 billion in 2021; -14% YoY) Net interest income = $52.4 billion (vs. $42.9 billion in 2021; +22% YoY) Noninterest income = $42.5 billion (vs. $46.2 billion in 2021; -8% YoY) Revenue = $95 billion (vs. $89.1 billion in 2021; +6.6% YoY) Noninterest expenses = $61.4 billion (vs. $59.7 billion in 2021; +2.8% YoY) Provision for credit losses = $2.5 billion (vs. $-4.6 billion in 2021) 4Q 2022 vs. 4Q 2021 (year over year) Net income 4Q22 = $7.1 billion (vs. $7 billion in 4Q21; +1.4% YoY) Net revenue 4Q22 = $24.5 billion (vs. $22 billion in 4Q21; +11%. YoY) Net interest income 4Q22 = $14.7 billion (+48% YoY) Noninterest income 4Q22 = $9.8 billion (-8% YoY) Noninterest expenses 4Q22 = $15.5 billion ( +6% YoY) Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
NYSE:BAC
by Tradersweekly
12
How did the U.S. biggest bank perform in 2022?During the summer of 2022, we laid out a thesis about the stock market progressing in the second stage of the bear market. We said that we would look for signs of corporate underperformance and downgrades in forward guidance within earnings statements for 3Q22 and 4Q22. In the 3Q22 earnings season, many companies began downgrading future outlooks and warning investors of a tough time ahead. For some sectors, inventories rose, and revenue streams showed a decline compared to the previous year's period. With the start of the new earning season, we will pay close attention to the new data, which may or may not confirm our thesis about the market diving deeper into a recession. Interestingly, the last Friday, multiple big banks on wall street announced their earnings statements. These names included JP Morgan Chase, Bank of America, Citigroup, and Wells Fargo. Today, we will briefly examine the biggest U.S. bank - JP Morgan Chase & Co. This bank has $3.66 trillion in assets and has not posted a yearly loss for more than 15 years. Its earnings report is divided into five segments: Consumer & Community Banking, Corporate and Investment Bank, Commercial Banking, Asset and Wealth Management, and Corporate. The bank’s Consumer and Community Banking segment showed gradual growth in net income and net revenue quarter after quarter in 2022. Furthermore, it maintained relatively stable noninterest expenses throughout the year. However, despite that, it posted a 29% less net income in 2022 versus 2021. In 4Q22, the Corporate and Investment Bank experienced a drop of 27% YoY (year over year) in net income. Additionally, in that same period, this division saw a decline in revenue by 9% YoY, and an increase in non-interest expenses by 10%. As for the full-year 2022, the Corporate and Investment Bank brought in 29% less net income versus 2021. Meanwhile, the Commercial Bank brought $1.4 billion in net income for the company in 4Q22, showing an increase of 15% versus 4Q21. Furthermore, it also enjoyed a rise in revenue by 30% versus 4Q21. Despite that, these two segments underperformed when compared to 2021. For the full-year 2022, the net income of this division dropped 20% versus 2021. The Asset and Wealth segment showed steady growth in net income quarter after quarter in 2022. However, it also suffered a drop of 8% in net income for the entire year 2022 versus 2021. The Corporate segment posted a net loss in the first three quarters of 2022 and a net gain in 4Q22. But for 2022, it is the only sector that posted a loss while still showing significant improvement from the last year. For the full-year 2022, JP Morgan Chase & Co. gained $37.7 billion in net income, which is down 22% versus 2021. Its revenue increased by 5.6%, and non-interest expenses jumped by 6.8%. Meanwhile, the company’s stock declined by 16%. Illustration 1.01 Illustration 1.01 shows the daily chart of JP Morgan Chase stock. The stock declined more than 16% in 2022. 2022 (full-year) vs. 2021 (full-year) Net income 2022 = $37.7 billion (vs. $48.3 billion in 2021; -22% YoY) Revenue 2022 = $132.3 billion (vs. $125.3 billion in 2021; +6.6% YoY) Noninterest expenses 2022 = $76.2 billion (vs. $71.3 billion in 2021; +6.8% YoY) Pre-Provision profit/loss 2022 = $56.1 billion (vs. $54 billion in 2021; +4% YoY) EPS = $3.57 4Q 2022 vs. 4Q 2021 (year over year) Net income 4Q = $11 billion (vs. $10.4 billion in 4Q21; +5.8% YoY) Net revenue 4Q = $35.6 billion (vs. $30.4 billion in 4Q21; +17%. YoY) Net interest income 4Q = $20.3 billion (+48% YoY) Noninterest income 4Q = $15.3 billion (-8% YoY) Noninterest expenses 4Q = $19.0 billion (+6% YoY)
NYSE:JPM
by Tradersweekly
9
My thoughts on Goldman Sachs going into the Earnings Weekly Timeframe After a challenging start to the year, the company's stock bottomed out at around 280$. This level was tested three times before the stock experienced a month-long rally. The bulls exhausted at around 350-360$ after which the price went on to make a higher low. There it formed a new demand zone and rallied again reaching 2-3 standard deviations and setting a new high. After that a retracement and consolidation, at around 340-350$, bouncing from the 20-period moving average and the 0.5 Fibb level. The RSI has remained above 50, forming three consecutive higher highs and higher lows. Suggesting that the upward movement is likely to continue. Daily Timeframe The price has consolidated and found a support zone. The 14-period RSI broke its trendline and is now moving upward. The MACD line crossing above the signal line also adds confirmation to this potential reversal. Overall, it looks like the market is primed for a strong trend in the coming days. Going forward… on the Daily Chart… Thanks for reading The Seeker! Subscribe for free to receive new posts and support my work. In early November, the price broke its previous structure and has since made higher highs and higher lows. The potential for a new high and a move above the 390$ level looks promising, with a solid risk-to-reward ratio.
NYSE:GSLong
by RickHardyPro
Banks gonna run? Why?Lets start with the establish trend, we have a lower high showing opportunity to continue to open up 2023. If you look closely you will see that we have a bullish hidden divergence. But does it have enough strength to blast through the Bullish line. If it does I can see it starting to fill those imbalance candles and attempt to make a higher high above 38.60. If the selling pressure pushes, I can see it hold my 31.48 bearish level. This slight reangle of the uptrend will make things interesting if the trend rides the line for over 10 days then break. 2023 opening could be a path to cheaper puts for the rest of the year. We will see.
NYSE:BACLong
by JDTheGreat
December 17 BTCUSD BingX Chart Analysis and Today's HeadlineBingX’s Bitcoin Chart Bitcoin is down 4.15% over the last 24 hours and fell to an intraday low of $16,528.49. The largest cryptocurrency turned down and broke below the 20-day EMA of $17,095 on Thursday, suggesting that the sentiment turned negative and the bears were selling the relief rallies. The 20-day EMA has started to turn down and the RSI has dipped below 43, indicating that bears are in command. If the price sustains below the 20-day EMA ($17,095), it could decline to $16,000. Today’s Cryptocurrency Headline Basel Committee to Enforce Standard on Banks’ Exposure to Crypto in 2025 The Basel Committee on Banking Supervision (BCBS) has approved its global crypto banking rules, which will come into force on January 1, 2025, according to a statement Friday. The BCBS, the main global standard-setter for prudential regulation of banks, recommends that banks should have no more than 2% exposure to certain crypto assets, and usually less than 1%. These particular assets are tokenized traditional assets including non-fungible tokens, stablecoins and unbacked crypto assets that don't meet classification conditions. Disclaimer: BingX does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to the company. BingX is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the article.
by BingX