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☆ U.S. banks should defend by boosting liquidity, curbing risk -Morgan Stanley
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +2 min

[1/2] People take photos by the Morgan Stanley building in Times Square in New York City, New York U.S., February 20, 2020. "Expect management teams will open up the defense playbook," said a Morgan Stanley report led by Betsy Graseck. The bank said the sector is already in "systemic risk territory," as the U.S. Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) jointly invoked the systemic risk exception last week. Morgan Stanley also said U.S. banks should tighten lending standards, which will make it tougher to get a loan. "We don't think large banks will come in and entirely fill the vacuum that the regional banks leave, as most banks will want to tighten standards," it said.

☆ Top analyst Betsy Graseck says get defensive with these bank stocks as risk grows
▼ + stars: | 2023-03-20 | by ( Michelle Fox | ) www.cnbc.com time to read: +2 min

Silicon Valley Bank's collapse , as well as the closure of crypto-focused Signature Bank and Silvergate Capital, all in March, "takes us further away from risks being idiosyncratic," analyst Betsy Graseck wrote in a note Monday. The end result is lower net interest margins, net interest income and return on equity across the industry, Graseck wrote. Among the large-cap banks, JPMorgan Chase , Wells Fargo and Regions Financial are buys, she said. Wells Fargo sank 8.7% and Regions Financial tumbled 11.8%, while American Express lost 5.5% over the same period. Of that total, JPM and Wells Fargo contributed $5 billion each.

☆ Savers find a silver lining during banks’ tumult — Rates on CDs are going up, Morgan Stanley says
▼ + stars: | 2023-03-16 | by ( Darla Mercado | Cfp | ) www.cnbc.com time to read: +2 min

That's because banks are boosting the rates they're paying on CDs, according to a Thursday report from Morgan Stanley. The average highest rate banks paid on a CD rose by eight basis points to 4.08% over the first two weeks of March, according to Morgan Stanley analyst Betsy Graseck. "This should push deposit rates higher even after the Fed pauses." Ally Bank and Synchrony Financial, for instance, are offering 5% on CDs going beyond 36 months, according to Morgan Stanley. See below for Morgan Stanley's list of top short-term CD rates as of March 15.

☆ SVB Financial issues are unlikely to spread to other banks, Wall Street analysts say
▼ + stars: | 2023-03-10 | by ( Jesse Pound | ) www.cnbc.com time to read: +3 min

The capital issues at SVB Financial sparked a sell-off among bank stocks on Thursday, but the tech-focused bank's woes will likely not be a preview of wider issues in the banking system, according to Wall Street analysts. KBWB 5D mountain Bank stocks fell sharply on Thursday. Morgan Stanley analysts Manan Gosalia and Betsy Graseck echoed that sentiment, saying in a note that the issues at hand appeared to specific to SVB. "Current pressures facing SIVB are highly idiosyncratic and should not be viewed as a read-across to other banks we cover. RBC analyst Gerard Cassidy said that banks without large retail customer bases could be in for a rocky period.

In this photo illustration of the TradingView stock market chart of SVB Financial Group seen displayed on a smartphone with the SVB Financial Group logo in the background. Shares of SVB Financial Group , known as Silicon Valley Bank, tumbled for a second day Friday and weighed on the whole banking sector again on fears more banks would incur heavy losses on their bond portfolios. The SPDR S&P Regional Banking ETF was off another 1.5% Friday following an 8% tumble on Thursday. Signature Bank , which does a lot of business with the crypto sector, was off 4% in premarket trading following a 12% tumble Thursday. On Thursday, the bank was worth $6.3 billion with that value set to drop even more when trading begins Friday.

☆ Analysis: Goldman Sachs faces hard sell for its consumer assets
▼ + stars: | 2023-03-01 | by ( Saeed Azhar | ) www.reuters.com time to read: +5 min

NEW YORK, March 1 (Reuters) - Goldman Sachs Group Inc (GS.N) is embarking on a tough sales pitch to investors for assets in its troubled consumer business, which has dragged on earnings and may lack appeal for potential buyers. In an unexpected move, Chief Executive Officer David Solomon said on Tuesday the bank is looking at 'strategic alternatives' for the consumer business, a signal of a possible sale. Solomon had championed Goldman's foray into consumer banking since taking the reins at the Wall Street powerhouse in 2018. The consumer operations largely failed to gain traction against well-established consumer banks and lost billions of dollars due to credit provisioning. Mike Mayo, an analyst at Wells Fargo, wrote in a note that the key question about Goldman's consumer business is: "who would be willing to buy it, and at what price?"

☆ UBS likes these high-quality dividend stocks to weather a downturn
▼ + stars: | 2023-02-22 | by ( Fred Imbert | ) www.cnbc.com time to read: +2 min

UBS screened the S & P 1,500 for stocks that have a forward dividend of more than 2% and strong relative dividend growth expectations over the next six months. Here are eight stocks that made UBS' list. Discover Financial made the list, with a forward dividend of 2.2%. The name with the highest forward dividend yield on the list is billboard operator Lamar Advertising at 4.67%. Other names that made UBS' list include PepsiCo , Qualcomm , Broadcom , Ralph Lauren and ConocoPhillips .

☆ Bank CD rates may be headed to 5.5% this year, Morgan Stanley says
▼ + stars: | 2023-02-21 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

That dynamic has accelerated along with market expectations that the Federal Reserve will have to raise its benchmark interest rate higher to subdue inflation, Morgan Stanley analysts led by Betsy Graseck said Tuesday in a research note. "Late in the Fed rate hike cycle, banks tend to increase their highest CD rate offerings above the Fed funds rate as competition for deposits intensifies," the analysts wrote. "Using history as a guide, this could put banks' highest CD rate offerings near 5.5% late in 2023." Higher rates have made holding cash a possible alternative to bonds and stocks for the first time in more than a decade. The industry's top average CD rate has already climbed by about 3.5% since the Fed started raising rates last year and currently sits below 4%, Graseck wrote.

☆ These are the most overbought and oversold stocks on Wall Street right now
▼ + stars: | 2023-02-11 | by ( Sarah Min | ) www.cnbc.com time to read: +4 min

For traders, one widely-used metric can help participants separate the most overbought, and oversold, stocks on Wall Street right now. The "relative strength index" measures the speed and magnitude of recent price moves , letting investors gauge possible overbought and oversold conditions in the market. Although overbought stocks can always rise further, theoretically until their RSI hits 100, and oversold stocks can still fall further, theoretically to 0, looking at RSIs remains helpful for investors looking to lighten up on existing positions or establish new ones. Amgen was identified as one of the most oversold stocks in the S & P 500. The pharmaceutical stock has a 14.6 14-day RSI rating, with just 35% of analysts rating the stock a buy.

☆ Morgan Stanley upgrades American Express, says higher-income customer base should continue spending in 2023
▼ + stars: | 2023-02-08 | by ( Samantha Subin | ) www.cnbc.com time to read: +2 min

A higher-income leaning customer base should position American Express well to ride out a year projected to see a strong uptick in delinquencies, Morgan Stanley said. The upgrade from Morgan Stanley comes after the credit card issuer surged last month after issuing strong guidance and dividend hike, despite weaker-than-expected fourth-quarter results. Given this backdrop, Graseck said that shares of American Express warrant a valuation premium to peers. In the same note, Morgan Stanley downgraded shares of Discover Financial Services to equal weight from an overweight rating, citing the credit card company's post-earnings outperformance. "We prefer the positive earnings growth story out of AXP, expected to see 15% EPS growth in 2023."

☆ Morgan Stanley analyst says these 'undervalued' bank stocks could rise 24%
▼ + stars: | 2023-02-01 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

The top picks of Morgan Stanley bank analyst Betsy Graseck are looking undervalued as the market rallies, she said Wednesday in a report. "Our most preferred stocks RF, WFC & JPM have largely been left out of the current market rally and look undervalued for their asset sensitivity and skew to quality," Graseck said. Graseck is among the analysts who have generally urged caution on banks because loan losses are expected to rise this year as the economy slows or even enters a recession. But bank stocks have caught a bid in early 2023, along with 2022's other beaten-down sectors, with the KBW Bank Index up 11.5% so far. Her three top picks could rise a median 24%, about 4% more than other large cap banks in her coverage in a base-case scenario, she said.

☆ Higher expenses are expected to weigh heavy on bank earnings, says Morgan Stanley's Betsy Graseck
▼ + stars: | 2023-01-12 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailHigher expenses are expected to weigh heavy on bank earnings, says Morgan Stanley's Betsy GraseckBetsy Graseck, global head of banks and diversified finance research at Morgan Stanley, joins 'Squawk Box' to discuss forecasts for bank earnings numbers, the benefits of higher rates on net interest income, and changes to expense outlooks in 2023.

☆ Here’s what bank stock investors need to know ahead of fourth-quarter earnings
▼ + stars: | 2023-01-12 | by ( Hugh Son | ) www.cnbc.com time to read: +4 min

It's been a confusing time for investors in bank stocks. Analysts are expecting a mixed bag of conflicting trends when four of the largest U.S. banks report fourth-quarter results Friday. "Our continued cautious view ... reflects ongoing macro risks and likely weakening bank fundamentals —including peaking net interest margins," Deutsche Bank analyst Matt O'Connor said in Jan. 5 note. The outlook Investors tend to discount fourth-quarter results in favor of what managements say about their outlooks for the coming year. "We expect above-consensus expense guides will likely weigh on bank stocks during 4Q22 earnings as managements communicate their 2023 budget plans," Graseck said.

"With most U.S. economists forecasting either a recession or significant slowdown this year, banks will likely incorporate a more severe economic outlook," said Morgan Stanley analysts led by Betsy Graseck in a note. Rising prices and higher borrowing costs have prompted consumers and businesses to curb their spending, and since banks serve as economic middlemen, their profits decline when activity slows. Reuters GraphicsStill, lenders stand to gain from rising rates that allow them to earn more from the interest they charge borrowers. Morgan Stanley and Citigroup, among others, have also cut jobs after a plunge in investment-banking activity. Analysts will also watch if banks such as Morgan Stanley and Bank of America book any writedowns on the $13-billion loan to fund Elon Musk's purchase of Twitter.

☆ 2022 didn’t go as expected for bank investors. How to avoid pitfalls in the sector in 2023
▼ + stars: | 2022-12-19 | by ( Hugh Son | ) www.cnbc.com time to read: +4 min

Banks finally got a long-awaited boost to interest rates this year after a decade of toiling in a low-rate environment. A year ago, big lenders including Bank of America and Wells Fargo were the top picks of the analyst community because they were expected to benefit from higher rates . Loan growth coupled with vast deposit bases would drive gains in interest income as the Federal Reserve hiked rates, the thinking went. In a downturn, banks are exposed to surging loan defaults, reduced loan demand and write-downs on assets. Veteran analyst Mike Mayo of Wells Fargo said that bank stocks could pop 50% in 2023 by proving their resilience in a recession.

☆ Morgan Stanley double upgrades JPMorgan Chase, sees positive operating leverage for the bank in 2023
▼ + stars: | 2022-12-06 | by ( Sarah Min | ) www.cnbc.com time to read: +1 min

Analyst Betsy Graseck double upgraded the bank's stock to overweight from underweight, saying JPMorgan will have positive operating leverage next year. Operating leverage indicates how well a company can raise operating income by generating revenue. The analyst said negative operating leverage in 2022 was a "key reason" for her underweight rating, "as operating leverage is the biggest driver of large cap bank stock alpha." The firm expects JPMorgan will deliver 110 basis points of positive operating leverage in 2023, with revenues up 10% and expenses up 9% year over year. "While 110bps isn't an eye-popping number, it's a significant inflection from the last two years of negative operating leverage at JPM (-510bps in 2021,est.

☆ Sell Ally Financial as shares could fall nearly 30% from here, Morgan Stanley says in downgrade
▼ + stars: | 2022-12-01 | by ( Sarah Min | ) www.cnbc.com time to read: +1 min

It's time for investors to bail on Ally Financial , according to Morgan Stanley. The analyst expects Ally will deal with additional pressure from declining net interest margin. Net interest margin (NIM) is the interest a bank is earning on loans compared to the interest it is paying on consumer deposits. "In addition, we see downside to consensus estimates from declining NIM [net interest margin] as deposit funding costs rise faster than auto yields and as losses migrate to the high end of management's range. Graseck similarly downgraded shares of Capital One Financial to underweight from equal weight because of her cautious outlook on consumer credit.

☆ Blackstone is a top pick in financials ahead of a potential Fed pivot, Morgan Stanley says
▼ + stars: | 2022-11-30 | by ( Sarah Min | ) www.cnbc.com time to read: +2 min

It's time to buy Blackstone as investors prepare for a pivot from the Federal Reserve, according to Morgan Stanley. Analyst Betsy Graseck named the private equity giant a top pick in financials, with an overweight rating, saying the stock is attractive entry point after its decline this year. The stock was hampered this year by a challenging macro environment that the analyst expects will continue to be an issue in the months ahead. Still, the analyst expects that Blackstone is a "long-term winner" that investors will turn more positive on as the Federal Reserve winds down their aggressive interest rate hiking campaign. Separately, the analyst removed LPL Financial from the Finest Financials list after downgrading the stock to equal weight from overweight.

☆ Fintech firm Upgrade offers top U.S. savings rate of 3.5% as competition for deposits heats up
▼ + stars: | 2022-10-27 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

Credit-card startup Upgrade is releasing a new savings account with what it says is the country's top interest rate as competition for deposits heats up, CNBC has learned. The fintech firm's Premier Savings account is being launched Thursday with a 3.5% annual percentage yield, according to CEO Renaud Laplanche. That is higher than any account currently tracked by Bankrate.com, senior analyst Ted Rossman said in an e-mail. "At 3.5%, we're by far the best savings account in the country," Laplanche said during an interview. "This suggests that deposit-pricing pressure is becoming more widely dispersed across the banking industry as rates move sharply higher," Graseck said.

☆ Morgan Stanley upgrades Discover Financial Services as company hopes to restart buyback program
▼ + stars: | 2022-10-26 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +3 min

Student loan growth strength The firm also expects stronger student loan growth, which also contributes to lifting its price target. In addition, Morgan Stanley sees personal loan growth accelerating to about 7% on the year in 2023 from about 4% in 2022. Discover also noted that they expect consumer payment rates to continue to normalize, adding "some tailwind to loan growth," Graseck wrote. Some offsets Graseck noted a few things that are set to offset earnings growth for the financial services company, including its reserve ratio. "We are holding DFS' reserve ratio flat over the next several years based on our outlook for rising credit losses," she said.

☆ Wells Fargo, Morgan Stanley downgrade auto lender Ally Financial after disappointing quarterly results
▼ + stars: | 2022-10-20 | by ( Samantha Subin | ) www.cnbc.com time to read: +2 min

Ally Financial 's weak third-quarter results were enough for analysts at two major Wall Street shops to downgrade the auto lender. "We believe ALLY shares will trade at a discount to tangible book value, as used car prices decline and [net interest margin] moderates around Fed rate hikes," Fandetti said. Ally's stock also got hit with a downgrade to equal weight and an earnings per share forecast cut from Morgan Stanley. "These include rate hikes ending, bottoming of used car prices, and credit quality stabilizing." Ally shares have tumbled more than 44% this year.

☆ All eyes turn to bank earnings for clues on slowing U.S. economy after Dimon’s recession warning
▼ + stars: | 2022-10-13 | by ( Hugh Son | ) www.cnbc.com time to read: +4 min

Big American banks have mostly resisted bulking up loan loss reserves this year as the financial health of consumers and corporations has held up despite mounting recession concerns. For much of the year, bank managers have told one story, while stocks have told another. Retail customers were spending briskly and still had ample cash in their accounts, executives including Bank of America CEO Brian Moynihan have said . In April, JPMorgan was the first big bank to begin boosting reserves for credit losses, taking a $902 million charge. Analysts expect the New York-based bank to generate $2.90 per share in third-quarter earnings, 22% lower than a year earlier.

☆ Watch CNBC's full interview with Morgan Stanley's Betsy Graseck
▼ + stars: | 2022-10-12 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWatch CNBC's full interview with Morgan Stanley's Betsy GraseckBetsy Graseck, joins 'Closing Bell' to discuss market pressure in fees, expenses, and credit quality, consumer finance pricing in credit risk, and top picks for bank stocks.

☆ Bank earnings will be a rocky ride, says Morgan Stanley's Betsy Graseck
▼ + stars: | 2022-10-12 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBank earnings will be a rocky ride, says Morgan Stanley's Betsy GraseckBetsy Graseck, joins 'Closing Bell' to discuss market pressure in fees, expenses, and credit quality, consumer finance pricing in credit risk, and top picks for bank stocks.

☆ BlackRock bought a money manager to expand in private credit. Insiders say the deal has now led to an exodus of frustrated employees.
▼ + stars: | 2022-09-21 | by ( Danielle Walker | Rebecca Ungarino | ) www.businessinsider.com time to read: +12 min

After BlackRock acquired private credit firm Tennenbaum Capital Partners, more than a dozen employees left the small investment team. Former BlackRock employees say underwhelming pay and unfulfilled promises that the team could raise its own special situations fund led to widespread frustration and departures. The departures come as BlackRock aims to compete more aggressively in private credit, a key part of its high-priority alternatives push. Still, in recent years management has made it clear that its private investment capabilities need to be an important engine of growth. "It's not to say that the private credit market is easy to manage talent.

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