Happy Macro News Trickles Down to Banks

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

News about the broader economy is hanging over the heads of banking stocks today. Luckily, the latest and greatest is generally positive. The market, overall, has been cheered by the Commerce Department's fresh estimate for Q2 2013 real GDP growth. In the second of its customary three projections, Commerce has pegged quarter-over-quarter improvement for the period at 2.5%, significantly higher than estimate No. 1 of 1.7%. The new figure is also higher than the 2.2% predicted by a Bloomberg survey of 79 economists.

The nation's big banks can take some credit for this improvement. Federal Deposit Insurance Corp. data released this morning indicated that the banking sector, as a whole, saw its most profitable quarter in history this past Q2. Collectively, the industry earned in excess of $42 billion during the quarter, an impressive 23% gain over Q2 2012's figure. This was due. in no small part. to the record quarterly earnings reaped by JPMorgan Chase  (NYSE: JPM  ) and Wells Fargo. The two behemoths netted $6.5 billion and $5.6 billion, respectively, during the quarter.

That happy trend seems to have spread north of the U.S. border, too. Royal Bank of Canada (NYSE: RY  ) today posted quarterly results that showed a record C$2.3 billion ($2.2 billion) in quarterly net income. Meanwhile, that institution and its peers, Bank of Nova Scotia and Toronto-Dominion Bank, (NYSE: TD  ) all raised their key quarterly dividends.

So, all in all, the banking world is a good place today, with the sector's famous stocks generally keeping pace with, or outrunning, the Dow.

This has all happened despite some less-than-stellar news on the legal front. Morgan, which apparently has a SUE ME sign painted in big letters on its back, is coming under increased scrutiny over its hiring practices in Asia. The Justice Department has waded into a Securities and Exchange Commission probe into whether the bank employed people well-connected to government and other important figures, in possible violation of bribery laws. Morgan has apparently opened an internal investigation into the matter; if so, it looks like it'll have plenty of help from various Federal agencies.

On a smaller scale, Bank of America's (NYSE: BAC  ) Merrill Lynch has agreed to fork over $160 million to settle a nearly decade-old class action discrimination lawsuit, according to an attorney for the plaintiffs. In 2005, a group of African-American brokers filed the suit, alleging a pattern of discrimination that resulted in their having lower production numbers than their Caucasian colleagues. Around 1,200 plaintiffs will receive a share of that award.

For the most part, though, the market's generally bullish. All in all, today's a good day to be a stockholder, particularly if that stock bears the name of a major banking group.

Have you missed out on the massive gains in bank stocks over the past few years? There's good news: It's not too late. Bargains of a lifetime are still available, but you need to know where to look. The Motley Fool's new report, "Finding the Next Bank Stock Home Run," will show you how and where to find these deals. It's completely free -- click here to get started.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2616527, ~/Articles/ArticleHandler.aspx, 9/25/2016 1:32:03 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
BAC $15.52 Down -0.08 -0.51%
Bank of America CAPS Rating: ****
JPM $67.25 Down -0.14 -0.21%
JPMorgan Chase CAPS Rating: ****
RY $61.78 Down -0.86 -1.37%
Royal Bank of Cana… CAPS Rating: ***