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Financial Sector Update for 07/19/2018: AXP,FITB,TRV,BBT


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Financial stocks continued to extend their earlier declines this afternoon, including a nearly 0.6% drop for the NYSE Financial Index while shares of financial companies in the S&P 500 were falling almost 1.3%. The Philadelphia Housing Index was rising just over 1.0%.

In economic news:

Stocks, treasury yields and the U.S. dollar all fell after President Trump railed against the Federal Reserve, saying the central bank's current program of gradually raising interest rates was hurting and the U.S. economy and American competitiveness. In an interview scheduled to be televised in full Friday morning on CNBC, Trump said he was "not thrilled" with Fed policy, later adding that every time the U.S. economy improves, "they want to raise rates again." The Federal Open Markets Committee has twice raised interest rates so far this year and is expected to boost rate twice more before the end of the year.

Earlier Thursday, the Labor Department said first-time applications for jobless benefits fell by 8,000 claims during the seven days ended July 14 compared with an upwardly revised 215,00 initial application during the previous week to its lowest level since December 1969 at 207,000 applications. Economists polled by Econoday had been expecting a 6,000 rise over the 214,000 initial claims originally reported for the prior week. The broader four-week moving average also was narrowly lower, dropping to 220,500 initial claims from 221,000 first-time applications for unemployment benefits during the week ended July 7. Continuing claims - which lag initial claims by one week - rose by 8,000 week-over-week to 1.738 million claimants. Also, general business conditions in the mid-Atlantic region increased to a 25.7 reading for July, jumping 6.8 points over the June reading and easily topping the 22.0 consensus score in an Econoday survey, according to the Philadelphia Fed.

Among financial stocks moving on news:

- American Express Company ( AXP ) declined Thursday, slipping as much as 4% after the credit card-issuer forecast FY18 revenue likely trailing Wall Street estimates. The company is projecting revenue growth of at least 9% during the 12 months ending Dec. 31 over FY17 level, lagging the Capital IQ consensus expecting 20.4% year-over-year growth to $40.28 billion. It also sees FY18 net income in a range of $6.90 to $7.30 per share, in-line with the $7.24 per share Street view. The mixed FY18 outlook upstaged above-consensus Q2 net income of $1.84 per share during the three months ended June 30, up from $1.47 per share in the year-earlier period and beating the analyst mean expecting $1.81 per share. Revenue rose 9.1% to $10.00 billion, roughly in-line with the $10.05 billion consensus call.

In other sector news:

- The Travelers Companies ( TRV ) was almost 4% lower Thursday afternoon, extending its decline throughout the session, after the insurance company reported Q2 core net income trailing Wall Street expectations. Core income in the period ending June 30 fell to $1.81 per share from $1.92 a year earlier, well below the consensus on Capital IQ for $2.39 a share. Net written premiums rose 7% to $7.13 billion, while total revenue was up 4% to $7.48 billion. Analysts, on average, were looking for $6.66 billion in quarterly revenue. Catastrophe losses totaled $488 million during the quarter, which were about $50 million more than the Travelers was expecting for the April-to-June period.

- BB&T ( BBT ) slid as much as 5% lower on Thursday after the bank holding company met analyst projections with its non-GAAP Q2 net income but its revenue for the period narrowly missed Wall Street estimates. Excluding one-time items, the bank earned $1.01 per share, improving on $0.78 per share during the prior year period, while revenue was little changed with the same quarter last year and coming up about $20 million shy of the Capital IQ consensus.

- Fifth Third Bancorp ( FITB ) was falling Thursday, sliding over 5% lower in recent trading, despite the bank holding company reporting above-consensus Q2 financial results. Excluding one-time items, Fifth Third earned $0.80 per share during the three months ended June 30, up from $0.45 per share during the same quarter last year and topping the Capital IQ consensus by $0.16 per share. Revenue, calculated as the sum of net interest income and non-interest income, grew to $2.02 billion from $1.68 billion in the year-ago period and exceeding the $1.67 billion analyst mean.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Banking and loans
Referenced Symbols: AXP , TRV , BBT , FITB



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