Bank Investors Will Bask in a Champagne Glow This Week

Bank of America, JPMorgan Chase, and Wells Fargo are still a little happy drunk after celebrating their respective approvals in the Fed's CCAR last Wednesday, and one is even handing out a dividend while it rides out the hangover. Sober Citigroup, however, wasn't invited to the party.

Mar 31, 2014 at 1:57PM

Over the next few days, Bank of America (NYSE:BAC)JPMorgan Chase (NYSE:JPM), and Wells Fargo (NYSE:WFC) investors will engage in a lot of water-cooler talk about dividends and buybacks. This is the first full week after the comprehensive capital analysis and review, or CCAR, the component of the Federal Reserve's bank stress tests that included the Fef's yays or nays for the capital allocation plans of the nation's big lenders. All in all, financials did very well this year, with 25 of the 30 tested companies getting the green light for their proposals.

Shareholders of Bank of America, JPMorgan Chase, and Wells Fargo will happily chatter about their banks' bumped-up dividends and share repurchase programs. Prior to the CCAR, Wells Fargo distributed a dividend of $0.30 per share on March 1. For its next distribution, this will now rise to $0.35 per share.

Not every bank is as fortunate. Citigroup (NYSE:C). was among the five banks to see its capital plan rejected in the CCAR. The big incumbent's shareholders remain stuck with a $0.01 per share dividend, which it has been paying every quarter for over five years now. Like Bank of America, Citigroup had requested a boost to $0.05 per share (in addition to a $6.4 billion share buyback initiative), but the regulator vigorously shook its head at the scheme.

This week, investors in financial majors will not only be keeping an eye on developments in the domestic market. The European Central Bank will hand down a decision on its benchmark main refinancing rate on Thursday. It is widely expected to keep the current level of 0.25%, as the continent's recovery has been slow and Euro-business needs the juice a low number can provide. 

Whatever the decision, it will have some impact on financials with a big presence in Europe. Among the four American biggies, this means Bank of America (in the form of its powerhouse investment banking subsidiary, Merrill Lynch), JPMorgan Chase, and Citigroup. All three stand to benefit from a recovery in the European economy, but we shouldn't expect that for a while no matter what the ECB does.

The American macro economy, meanwhile, will be in focus as several key figures are released over the next few days. Arguably the most critical is the March unemployment rate, to be published Friday morning by the Bureau of Labor Statistics. The consensus is for a slight drop, to 6.6% from February's 6.7%, due in no small part to the thaw in the weather. Other notable macro numbers coming down the pipe this week include the Census Bureau's figure for construction spending in February, to be published on Tuesday, and the February trade deficit figure from the Commerce Department, to be released Thursday.

For the most part, though, this week should be all about the micro economy, particularly as it concerns the operations of the nation's financials. Last week was a good one for banks; they'll hope the same for this Monday to Friday period, too. 

Big banking's little $20.8 trillion secret
Do you hate your bank? If you're like most Americans, chances are good that you answered yes to that question. While that's not great news for consumers, it certainly creates opportunity for savvy investors. That's because there's a brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banking model. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.

Editor's note: a previous version of this article stated that Wells Fargo distributed its dividend this week. This dividend was actually paid on March 1. The Fool regrets this error.

Eric Volkman has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo, and owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information