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Where Will CD Rates Go in 2024?
  + stars: | 2023-11-29 | by ( Mallika Mitra | ) www.wsj.com   time to read: +7 min
Interest rates that banks pay on certificates of deposit are closely tied to short-term interest rates set by the Federal Reserve. Now that the inflation rate has come down, many investing pros see two possible outcomes for interest rates in 2024: one in which the Fed has little choice but to cut rates steeply, and another in which the Fed can cut rates modestly. Either scenario would eventually result in CD rates decreasing, since rates on CDs tend to quickly follow Fed moves. Where will CD rates go in 2024? But if investors are correct that rate cuts are coming, those high CD rates will come down over the next few years, too.
Persons: Mallika Mitra, , , Lili Vasileff, Leslie Falconio, “ They’re, you’ll, you’re, Jeremy Keil, ” Keil, Keil, “ You’ve, Ally Organizations: Federal Reserve, UBS, Wall, Federal Credit Union, Minnequa Works Credit Union, Federal Deposit Insurance Corporation, National Credit Union Administration Locations: Greenwich, Conn, U.S, Milwaukee, APYs
In this videoShare Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailBig banks should have been investing in fintech growth businesses, says Jim Cramer'Mad Money' host Jim Cramer looks at financials and the sector's impact on the broader market.
Persons: Jim Cramer Locations: financials
Analyst Brad Capuzzi's $8 price target is 43% above where the stock closed on Monday afternoon. "Shares have substantially outperformed this year; catalyzed by the exit of the logistics business & newfound emphasis on profitability," wrote analyst Clarke Jeffries. Bank of America's Vivek Arya lifted his price target to $1,200, or more than a 26% increase from the stock's Monday close of $950.24. Herbert upgraded Boeing to outperform from sector perform and lifted his price target to $275 from $200. "We believe we are in the early stages of a significant shift in sentiment on BA stock," analyst Ken Herbert wrote.
Persons: Jefferies, Piper Sandler, Brad Capuzzi's, Capuzzi, Lisa Kailai Han, Goldman Sachs, Keith Horowitz, Horowitz, Goldman, — Lisa Kailai Han, Clarke Jeffries, Jeffries, Bernstein, Peter Weed, Weed, UBS downgrades ChargePoint, Robert Jamieson, Jamieson, bode, Timothy Arcuri, America's Vivek Arya, Arcuri, Arya, Herbert, Ken Herbert, John Hecht, Fred Imbert Organizations: CNBC, Tuesday's, RBC, Boeing, UBS, Citi Citi, UBS downgrades, UBS doesn't, Broadcom, VMWare, Bank of America, Bank, America's, RBC Capital Markets, , Jefferies Locations: underperform, LendingClub, Goldman Sachs
While high interest rates have boosted the banks' lending margins, residential mortgages, auto loans and commercial real estate loans have slowed as consumers and businesses pulled back. With interest rates forecast to remain high, renewal of the mortgages will squeeze household budgets. Banks are also rethinking lending to industries sensitive to high interest rates, from condo development to office space. "We want to make sure we have some kind of confidence when a project is going to go ahead," said Victoria Girardo, Canadian Western Bank's (CWB.TO) VP in real estate lending. "That is creating liquidity issues across the real estate developer space.
Persons: Carlos Osorio, Ebrahim Poonawala, Mike Rizvanovic, Rizvanovic, Banks, Victoria Girardo, Nigel D'Souza, Nivedita Balu, Mark Porter Organizations: Bank of Montreal, REUTERS, Rights TORONTO, U.S, National Bank, Bank, Veritas Investment Research, Thomson Locations: Toronto , Ontario, Canada, Toronto
Back in June 2022, big banks approved 15.4% of small business loan applications. All those factors have added up to a grim environment if you’re a small business seeking a loan. Without two years of tax returns, however, she didn’t qualify for many small business loans. Online lenders were quick to offer their services, but the terms were too strict, requiring weekly repayments or interest rates up to 40%. “For a small business that is not only intimidating, it’s almost impossible," she said.
Persons: Banks, Cheyenne Smith, Smith, , Shantell Chambliss, Chambliss, , she’s, Nate Hodge, He’s, Hodge, “ It’s, ” Jen Rose, Rose Organizations: Federal Reserve, National Federation of Independent Business, Bee, Comerica Bank, Comerica Locations: Salt Lake City , Utah, Dakota, Richmond , Va, Capital, Dallas , Texas
With the Canadian economy showing signs of a slowdown, money markets are pricing in the first interest rate cuts since March 2020 as soon as April, which would bring down mortgage costs. Still, more home buyers took out fixed-rate mortgages in September compared with a year ago, eschewing variable rate mortgages where the interest rate varies based on current market rates. Since then, the central bank has raised the key interest rate to a 22-year high of 5% in July. The share of fixed rate loans among five-year and three-year mortgages rose to 68% in August compared with 32% a year ago. In the first three weeks of November, 79% of mortgage seekers in Canada opted for a fixed mortgage, said Hanif Bayat, CEO of financial data firm Wowa Leads.
Persons: you've, Macklem, Sophie Tremblay, Hanif Bayat, Wowa, Carolyn Rogers, Rogers, Ryan Sims, William Coyle, Nivedita Balu, Denny Thomas, Deepa Babington Organizations: TORONTO, Bank, Bank of Canada, Montreal, NEW, National Bank analysts, BoC, The Mortgage Group Inc, Bank of, Thomson Locations: Canada, Niagara, Huntsville, Toronto
The 2022 climate law has accelerated investments in clean-energy projects across the United States. It has also delivered financial windfalls for big banks, lawyers, insurance companies and start-up financial firms by creating an expansive new market in green tax credits. The law, signed by President Biden, effectively created a financial trading marketplace that helps smaller companies gain access to funding, with Wall Street taking a cut. The law created a wide range of tax incentives to encourage companies to produce and install solar, wind and other low-emission energy technologies. But the Democrats who drafted it knew those incentives, including tax credits, wouldn’t help companies that were too small — or not profitable enough — to owe enough in taxes to benefit.
Persons: Biden Locations: United States
The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren/File Photo Acquire Licensing RightsNEW YORK, Nov 20 (Reuters) - Citigroup (C.N) was sued on Monday by a managing director who said a former top equities banker subjected her to sexual harassment and abuse including death threats. Lindsey also accused Citigroup of tolerating a "notoriously hostile" environment in its equities division. Lindsey's lawsuit also seeks damages under New York's Adult Survivors Act for an alleged sexual assault by another Citigroup executive following a December 2007 holiday party. The case is Lindsey v Citigroup Global Markets Inc, U.S. District Court, Southern District of New York, No.
Persons: Chris Helgren, Ardith Lindsey, Mani Singh, Lindsey, Singh, Lindsey's, Frank Underwood, Kevin Spacey, Jeremiah Iadevaia, Jonathan Stempel, Lisa Shumaker Organizations: Citigroup Inc, Citi, REUTERS, Citigroup, North America Markets, U.S, Lindsey, Citigroup Global Markets Inc, Court, Southern District of, Thomson Locations: Toronto , Ontario, Canada, New York, Americas, Manhattan, Singh, Southern District, Southern District of New York
Market prophet Gary Shilling issued a raft of dire warnings to investors in an interview this week. Stocks may crash 30%, a recession is imminent, and commercial real estate is a bubble about to burst, he said. AdvertisementStocks could crater by 30%, the US economy is careening toward recession, and commercial real estate is a bubble about to burst, a legendary market prophet warned this week. "I think the biggest bubble right now is commercial real estate. This isn't of the magnitude of the subprime-mortgage bonanza, but I think it is a bubble which is beginning to crack."
Persons: Gary Shilling, Shilling, , Julia La Roche, I've, they've, we're, John Paulson Organizations: Service, Federal Reserve
Signage is seen outside of a Nationwide Building Society in London, Britain, May 22, 2019. REUTERS/Hannah McKay/File Photo Acquire Licensing RightsLONDON, Nov 17 (Reuters) - Nationwide Building Society (NBS.L) reported record benefits for its customers in the first half of its financial year, including a 344 million pound ($425.94 million) payout and 885 million pounds of incentives on products below market rates. The country's largest building society made 100 pound transfers into the current accounts of 3.4 million members in May, paying longstanding customers some of its profits from rising interest rates. The member-owned lender, which competes with Britain's big banks but does not have to prioritise shareholder returns, on Friday said profit for the six months to Sept. 30 rose to 989 million pounds from 969 million pounds a year earlier. ($1 = 0.8076 pounds)Reporting by Lawrence White Editing by David GoodmanOur Standards: The Thomson Reuters Trust Principles.
Persons: Hannah McKay, Lawrence White, David Goodman Organizations: Building Society, REUTERS, Nationwide, Thomson Locations: London, Britain
New York CNN —Robinhood is trying hard to lure customers fed up with traditional banks that pay little to no interest on savings. To attract deposits, the stock trading app made famous by the GameStop craze is offering fatter and fatter interest rates. That’s far higher than traditional banks and among the highest in the industry. We see an opportunity to correct that,”Tenev argued this has long been part of the “playbook” of traditional banks. The Robinhood rate of 5% applies to new and existing customers of Robinhood Gold, a subscription service that costs $5 a month.
Persons: New York CNN — Robinhood, , Vlad Tenev, ” Tenev, Robinhood, Roth, , Tenev, We’re Organizations: New, New York CNN, GameStop, CNN, Federal Reserve, American Bankers Association, Bank, AMC, of America, ” Bank of America Locations: New York
Welcome to the (almost) red-hot bond market
  + stars: | 2023-11-15 | by ( Nicole Goodkind | ) edition.cnn.com   time to read: +7 min
When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow. Surging mortgage rates over the past few years have sent home loan applications and home sales down sharply. The 30-year fixed rate mortgage was also advancing towards 8% — a level not seen since the dot-com bubble popped in 2000. Those raging Treasury yields brought pain to investors and also increased how much American companies had to pay to service their debts. In fact, Wall Street is struggling to figure out what it means for the timing and scale of future rate cuts.
Persons: , Michael Hartnett, Gina Bolvin, “ We’re, Phillip Wool, Goldman Sachs, Morgan Stanley, Ellen Zentner Organizations: New, New York CNN, New York Federal, Treasury, Dow, Bank of America, Bolvin Wealth Management, Mortgage News, Mortgage, Association, Financial, Consumer, Federal Reserve, Goldman, Fed, UBS, Airlines for America, AAA Locations: New York
REUTERS/Dado Ruvic/Illustration Acquire Licensing RightsBENGALURU, Nov 14 (Reuters) - U.S. Treasury yields will fall in coming months, though not as sharply as forecast previously, according to bond strategists polled by Reuters, who said for a fourth month running in even greater numbers that the 10-year note yield had peaked. The benchmark 10-year Treasury note yield breached the 5% mark last month for the first time since July 2007, more than a full percentage point above its August low of 3.96%. Yet, when asked whether the 10-year note yield had peaked in the current cycle, an overwhelming 94% majority of respondents, 30 of 32, said it had. The interest-rate sensitive 2-year Treasury note yield , currently at 5.04%, was expected to decline about 20 basis points by end-January, before falling to 4.00% in a year, according to the survey. If realized, this would mean a complete reversal of the inverted spread between yields of U.S. 2-year and 10-year Treasury notes - historically a reliable indicator of impending recession - by end-October 2024.
Persons: Dado Ruvic, Thomas Simons, Mike Sanders, Sarupya Ganguly, Prerana Bhat, Purujit Arun, Anitta Sunil, Sujith Pai, Christina Fincher Organizations: REUTERS, Rights, Treasury, Reuters, Federal Reserve, Hamas, Jefferies, Madison Investments, Thomson Locations: U.S, Israel
Federal rules require banks to reimburse customers for payments made without their authorization, such as by hackers, but not when customers themselves make the transfer. Following its launch in 2017, Zelle grew to become one of the largest U.S. peer-to-peer payments networks by total payments. A March 2022 New York Times report that scams were flourishing on Zelle caught the attention of lawmakers frequently critical of big banks, including Senator Elizabeth Warren. He said Zelle has seen "a step-change reduction" in fraud and scam rates this year but declined to provide details. Chance said EWS has been engaging with policymakers on the need for a "holistic approach" to combating scams, including advocating for more dedicated law enforcement resources.
Persons: Jamie Dimon, Jane Fraser, Brian Moynihan, Banks, Ben Chance, Zelle, Elizabeth Warren, Warren, Dimon, EWS, Chance, , Trace, Carla Sanchez, Adams, we're, Lindsey Johnson, Hannah Lang, Chris Prentice, Michelle Price, Rod Nickel Organizations: JPMorgan Chase, Citigroup, Bank of America, Banking, Housing, Urban Affairs, Capitol, Warning, Reuters, Federal, JPMorgan, New York Times, Federal Trade Commission, Consumer Financial Protection Bureau, PayPal, National Consumer Law, Consumer Bankers Association, Thomson Locations: Zelle, U.S, Warren, Washington, New York
The logo of Swiss Financial Market Supervisory Authority FINMA is seen outside their headquarters in Bern, Switzerland April 5, 2016. We want reform so that we don't end up in the same mess again as we had with Credit Suisse." Earlier this year, Switzerland's financial regulator deflected blame for the collapse of the country's second-biggest bank saying it had been quick to respond, calling instead for more powers to take lenders to task. The regulator, however, has enjoyed little support among Swiss politicians, many of whom long sought to keep it weak. In the run up to the collapse of Credit Suisse, FINMA saw a string of key departures.
Persons: Ruben Sprich, Eva Herzog, Herzog, FINMA, Noele Illien, Sharon Singleton Organizations: Swiss Financial Market, Authority, REUTERS, UBS Group, Credit Suisse, Swiss, UBS, International Monetary Fund, Thomson Locations: Bern, Switzerland, Europe, Swiss
In today's big story, we're looking at what the $650 billion in unrealized losses means for financial firms. That's the unrealized losses US financial firms wracked up as of September 30, according to Moody's estimate. That means there's a lot of wiggle room for how big banks can portray them on their balance sheet. To be sure, big banks are better capitalized than SVB. Big banks' share prices noticeably dropped as bond prices sunk.
Persons: , it's, Nikolas Liepins, it'd, Matthew Fox, Dow Jones, isn't, Wall, Jim Chanos, Chanos, Ralph Lauren, Expedia, Apple, Dan Clancy, he's, Tyler Le, Tyson, Dan DeFrancesco, Naga Siu, Hallam Bullock, Lisa Ryan Organizations: Service, Anadolu Agency, Getty, NFL, Bank, Bank of America, Orrell, CNBC, NBCU, Apple, Big Tech, Professional, Vegas Golden Knights, Stanley, Tyson Foods Locations: Florida, New York City, San Diego, London, New York
The rise of Treasury yields since 2022 has delivered a major boost to the tokenization of real-world assets. The total value of on-chain, real-world assets sits at $118.6 billion, according to Fundstrat. AdvertisementAdvertisementThe breathless rise of Treasury yields since 2022 has delivered a major boost to the tokenization of real-world assets. AdvertisementAdvertisementRight now, the total value of on-chain, real-world assets sits at $118.6 billion, according to Fundstrat. But the tokenization of real-world assets onto the blockchain is a newer trend that's picking up steam.
Persons: It's, , Franklin Templeton, Tom Couture, SWIFT, Couture, Lee Bratcher, Bratcher, Fundstrat Organizations: Service, Boston Consulting Group, JPMorgan, BlackRock, Barclays, Texas Blockchain Locations: tokenize, Texas
It led to a flurry of behind-the-scenes coordination with the affected bank and across the financial sector about the threat. The hackers hit New York-based ICBC Financial Services, a subsidiary of the world’s largest bank by assets and a Chinese state-owned institution. ICBC Financial Services did not respond to CNN’s request for comment on Friday. “If China sees this as a black eye, they may demand action from the Russian government,” Liska told CNN. LockBit ransomware was the most deployed ransomware around the world in 2022, according to US cybersecurity officials.
Persons: , , ” Jon Miller, Halcyon, BNY Mellon, LockBit, Allan Liska, ” Liska, JPMorgan Chase, LockBit ransomware, ” Will Thomas Organizations: CNN, Commercial Bank of, Intelligence, Financial Services, Treasury, ICBC Financial, Reuters, JPMorgan, FBI, Infrastructure Security Agency, Treasury Department Locations: Commercial Bank of China, US, York, China, Russia, United States, Iran, cybersecurity
A federal judge on Thursday approved a settlement of a class-action lawsuit in which JPMorgan Chase will pay $290 million to sexual abuse victims of Jeffrey Epstein who claimed that the bank ignored warnings about the disgraced financier. The money being paid by JPMorgan, the nation’s biggest bank, could provide compensation to nearly 200 victims of Mr. Epstein, according to a legal filing. JPMorgan and lawyers for the victims reached a preliminary settlement in June, averting a potential civil trial in federal court in Manhattan. The judge, Jed Rakoff, gave final approval to the deal after holding an afternoon hearing to assess the fairness of the settlement to the victims. Some, including one who said she was just 13 when Mr. Epstein first sexually assaulted her, wrote about continuing to suffer from depression, anxiety, panic attacks and eating disorders.
Persons: Jeffrey Epstein, Epstein, Jed Rakoff Organizations: JPMorgan Chase, JPMorgan Locations: Manhattan
Aussie 'big four' banks hike home loan rates after RBA decision
  + stars: | 2023-11-09 | by ( ) www.reuters.com   time to read: +1 min
People use Commonwealth Bank of Australia (CBA) bank ATMs in Sydney, Australia May 3, 2018. The National Australia Bank (NAB.AX), ANZ Group Holdings (ANZ.AX) and Westpac Banking Corp (WBC.AX), the other three of Australia's "big four", had hiked their home loan rates on Wednesday by 0.25%. The rate hike by the National Australia Bank (NAB.AX) and ANZ Group Holdings (ANZ.AX) would be effective from Nov. 17, while Westpac Banking Corp (WBC.AX) would raise rates from Nov. 21, the lenders said in separate statements on Wednesday. CBA said its home loan variable rate change would be effective from Nov. 17. Reporting by Rishav Chatterjee and Upasana Singh in Bengaluru; Editing by Savio D'Souza and Rashmi AichOur Standards: The Thomson Reuters Trust Principles.
Persons: Edgar Su, Rishav Chatterjee, Upasana Singh, Savio D'Souza, Rashmi Organizations: Commonwealth Bank of Australia, REUTERS, Thursday, National Australia Bank, ANZ Group Holdings, Westpac Banking Corp, Reserve Bank of Australia, Wednesday, CBA, Thomson Locations: Sydney, Australia, Bengaluru
Switzerland wanted its big banks to be fortresses. In practice, the country’s “too big to fail” banking laws made a sand castle of Credit Suisse. The Swiss rules in question have become an object lesson in the difficulties of designing financial regulation. Created to prevent a repeat of the 2008 financial crisis bailouts, Switzerland’s customized version of international capital requirements laid the groundwork for the biggest bank rescue since.
Organizations: Credit Suisse Locations: Switzerland, Credit, Swiss
With the economy slowing and adding fewer jobs, banks are anticipating more consumers could default on credit-card payments and mortgages, hurting profits. "(Canadian banks) are running a little bit tighter in capital than they have in the past," said Adrienne Young, director of corporate credit research at Franklin Templeton Canada. "I don't see them having to go out and raise equity... I think the banks will use other tools in their toolbox before having to go and raise equity," said Maria Gabriella Khoury, analyst at credit-ratings agency Fitch. "They are doing that.. to make sure banks are holding more capital as we potentially head into a downturn," Colangelo said.
Persons: Banks, Adrienne Young, Maria Gabriella Khoury, Fitch, Robert Colangelo, Colangelo, Anthony Visano, Nivedita Balu, Rod Nickel Organizations: TORONTO, Franklin Templeton, " Bank of Nova, Scotiabank, BMO, Equity, DSB, Royal Bank of Canada, RBC, HSBC Canada, Kingwest, Thomson Locations: Franklin Templeton Canada, " Bank of Nova Scotia, U.S, Toronto
HSBC on Wednesday announced it will offer custody services for tokenized securities, making the British bank the latest major institution to embrace digital assets. HSBC is using technology from Swiss crypto custody firm Metaco, which was recently acquired by blockchain startup Ripple, to store bonds and other securities. HSBC is the latest institution to embrace digital asset custody, after U.S. banking giant BNY Mellon announced a similar move in 2021. Tokenized securities are effectively regulated assets, like bonds and equities, in the form of tokens issued on a blockchain. It marks another step from HSBC toward embracing digital assets.
Persons: BNY Mellon, bitcoin, Banks, Zhu Kuang Lee, Adrien Treccani Organizations: HSBC, Wednesday, HSBC Orion, BNY, CNBC, Hong Locations: Europe, British, Swiss, Hong Kong
Big Banks Cook Up New Way to Unload Risk
  + stars: | 2023-11-07 | by ( Matt Wirz | Peter Rudegeair | ) www.wsj.com   time to read: 1 min
U.S. banks have found a new way to unload risk as they scramble to adapt to tighter regulations and rising interest rates. JPMorgan Chase , Morgan Stanley , U.S. Bank and others are selling complex debt instruments to private-fund managers as a way to reduce regulatory capital charges on the loans they make, people familiar with the transactions said.
Persons: JPMorgan Chase, Morgan Stanley Organizations: JPMorgan, U.S . Bank
Peter Rudegeair — Reporter at The Wall Street Journal
  + stars: | 2023-11-04 | by ( Peter Rudegeair | ) www.wsj.com   time to read: +1 min
Peter RudegeairPeter Rudegeair is a reporter covering how technology is changing financial services. He works in The Wall Street Journal's newsroom in New York. In 2022, Peter was part of a team of Journal reporters that received the New York Press Club award for business reporting for their coverage of Robinhood, GameStop and meme-stock mania. Those stories also earned the New York Press Club's 2021 award for spot news and an honorable mention from the Society for Advancing Business Editing and Writing. Peter joined the Journal in 2015 from Reuters News, where he covered the banking industry's efforts to rebuild in the wake of the 2008 financial crisis.
Persons: Peter Rudegeair Peter Rudegeair, Goldman Sachs, Peter, Gerald Loeb Organizations: PayPal, JPMorgan, Apple, Facebook, Google, New York Press, GameStop, Society for, Reuters, Council, Foreign Relations Locations: New York, Washington
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