Key TakeawaysThe majority of active traders think now is a good time to invest (59%) and that they're financially better off than they were a year ago (60%), according to a quarterly Schwab client survey.The trading clients showed increased bullishness about artificial intelligence (AI) stocks (62%) and the information technology sector (61%).The political landscape, a possible market correction, and inflation were primary concerns for traders. People who trade actively are increasingly optimistic about the ...

Could now finally be the time to buy the struggling financial services stock?Charles Schwab (SCHW 0.19%) has been under pressure over the past couple of years as multidecade high interest rates have weighed on the business. The financial services company, which has relied heavily on low-cost deposits to fund its business, has struggled with declining bank deposits and has been forced to rethink its business model.During its second-quarter earnings call, CEO Walt Bettinger said that the bank would reduce the ...

A major shareholder didn't exactly signal confidence in the company with its latest move.Charles Schwab (SCHW -0.47%) saw a dip in its share price on Thursday due to events outside the company's control. That's because the top news item for the brokerage was that a major shareholder unloaded some of its Schwab holdings at a discount.Schwab's stock price sagged in sympathy. By the end of the trading session, the company's shares had lost 0.5% of their value. That compared favorably, but only just, with the S ...

Core Viewpoint - The Toronto-Dominion Bank (TD) is currently rated as a "Buy" due to its compelling valuation and the perception that risks are fully discounted, making it an attractive entry point for investors with low exposure to the Canadian financial sector [2][3]. Financial Performance - In Q2 2024, TD reported an adjusted EPS of $2.04, which is a 7% increase year-over-year, although the headline EPS of $1.35 reflects a 20% decline year-over-year [6][7]. - Revenue increased by 11% year-over-year, with adjusted revenue growth at 10% year-over-year, driven by higher trading-related revenue and lending fees [6][7]. - The bank's net income was reported at $2.564 billion, down 22% year-over-year, with expenses rising by 24% year-over-year, largely due to provisions related to Anti-Money Laundering (AML) investigations [6][7][11]. Provisions and Expenses - The provision for credit losses (PCL) was $1.071 billion, reflecting a significant increase year-over-year, although it was lower than market expectations [5][7]. - Non-interest expenses increased by 7% year-over-year, contributing to the overall miss on adjusted EPS [7][11]. Capital Management - TD's Common Equity Tier 1 (CET1) ratio decreased to 13.4% from 13.9% in Q1 2024, impacted by dividends, buybacks, and charges related to AML provisions [10]. - The bank's restructuring program is nearing completion, with expected savings of approximately $400 million pre-tax for fiscal year 2024 [12][11]. Market Outlook - The bank faces challenges from the Canadian housing market, which is experiencing deflation, and the impact of a rapid interest rate hike cycle [13][20]. - The outlook for TD is tempered by a larger-than-expected AML fine, which could affect its reputation and valuation in the medium term [19][20]. Investment Considerations - Despite the challenges, TD is viewed as a strong value play in the financial sector, although the next 12 months may be difficult due to economic headwinds [20]. - The bank's stock is considered well-priced relative to its franchise, especially compared to peers like the Royal Bank of Canada [20].

Charles Schwab (SCHW) reported its monthly activity report for July 2024. The company’s core net new assets of $29 billion surged substantially from $13.7 billion recorded in the prior-year month but was unchanged from the previous month.SCHW’s total client assets in July 2024 were $9.57 trillion, up 2% from the June 2024 level and 16% from July 2023. Client assets receiving ongoing advisory services were $4.83 trillion, rising 2% from the prior month and 16% year over year.Schwab’s average interest-earning ...

A month has gone by since the last earnings report for The Charles Schwab Corporation (SCHW) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Charles Schwab due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Schwab's Q2 Earnings & Revenu ...

Core Insights - Charles Schwab shares experienced a significant increase after reporting strong customer and asset growth in July, with a stock price rise of 4.6% to close at $65.36 [1] Monthly Growth Trends - In July, Schwab achieved core net new assets of $29 billion, more than doubling the total from the same month last year [2] - Total client assets reached $9.57 trillion, reflecting a year-over-year increase of 16% and a month-over-month increase of 2% [2] - The firm added 327,000 new brokerage accounts in July, marking an 8% increase from the previous year and a 5% increase from the prior month [2] ETF Innovation and Executive Developments - Schwab launched its first actively managed fixed-income ETF, the Schwab Ultra-Short Income ETF (SCUS), aimed at generating income while preserving capital [3] - The company is the fifth-largest ETF issuer based on assets under management [3] - A new chief financial officer, Michael Verdeschi, will join the company on October 1, succeeding Peter Crawford [3] Stock Performance - Schwab shares reached a 52-week high of just under $80 in mid-May but have faced pressure recently, with a year-to-date decline of 3.9% despite the recent gains [4]

Client Assets and Growth - Total client assets reached $9.41 trillion as of June 30, 2024, reflecting a 17% increase year-over-year[20] - Core net new client assets for Q2 2024 were $61.2 billion, up 17% from the previous year, contributing to a year-to-date total of $156.8 billion[20] - Average client assets increased to $9,134.1 billion in Q2 2024, a 19% rise compared to $7,698.3 billion in Q2 2023[20] - New brokerage accounts opened in Q2 2024 totaled 985,000, a 3% increase from 960,000 in Q2 2023[20] - The company anticipates continued growth in client assets driven by trusted relationships and effective capital management strategies[13] Financial Performance - Total net revenues for Q2 2024 were $4,690 million, a 1% increase from $4,656 million in Q2 2023[20] - Net income for Q2 2024 was $1,332 million, up 3% from $1,294 million in Q2 2023[20] - The pre-tax profit margin improved to 37.2% in Q2 2024, compared to 36.3% in Q2 2023[20] - Net income for Q2 2024 was $1.3 billion, a 3% increase year-over-year, while year-to-date net income totaled $2.7 billion, down 7% from the same period in 2023[22] - Total net revenues increased by 1% year-over-year to $4.7 billion in Q2 2024, while year-to-date revenues were $9.4 billion, down 3% from the first half of 2023[22] Revenue Sources - Net interest revenue was $2.2 billion in Q2 2024, down 6% year-over-year, and $4.4 billion for the first six months, down 13% from the same period in 2023[22] - Asset management and administration fees rose 18% to $1.4 billion in Q2 2024, and 19% to $2.7 billion for the first half of the year, driven by growth in money market funds and equity market gains[22] - Trading revenue decreased by 6% to $1,594 million in the first six months of 2024, down from $1,695 million in 2023[39] - Bank deposit account fees increased by 3% to $336 million in Q2 2024, compared to $326 million in Q2 2023[39] Expenses and Cost Management - Total expenses excluding interest were $2.9 billion in Q2 2024, down 1% year-over-year, reflecting cost reduction efforts and lower acquisition-related costs[23] - Total expenses excluding interest decreased by $22 million (1%) in Q2 2024 and $86 million (1%) in the first six months compared to the same periods in 2023[60] - Total compensation and benefits expense decreased by 3% in Q2 2024 and 5% in the first six months compared to the same periods in 2023, primarily due to lower headcount[61] - Professional services expense decreased by 5% in Q2 2024 and 6% in the first six months compared to the same periods in 2023, attributed to lower utilization of professional services[62] Capital and Liquidity - The consolidated Tier 1 leverage ratio at the end of Q2 2024 was 9.4%, up from 7.5% in the previous year[20] - The company recognized a pre-tax charge of $30 million related to FDIC special assessments in 2024, with further assessments expected over the next two years[30] - The company maintains a buffer of highly liquid investments, including U.S. Treasury securities, to meet unanticipated liquidity needs[94] - The Liquidity Coverage Ratio (LCR) was 120% as of June 30, 2024, indicating compliance with regulatory requirements[108] Shareholder Returns - CSC's Board of Directors approved a share repurchase authorization of up to $15.0 billion, replacing the previous $4.0 billion authorization, with approximately $8.7 billion remaining as of June 30, 2024[125] - Cash dividends paid for the first six months of 2024 and 2023 are detailed in the financial report[123] Market and Economic Conditions - The Federal Reserve maintained the upper bound of the target overnight rate at 5.50% since July 2023, impacting interest revenue dynamics[36] - The company expects constrained housing supply to keep home prices relatively stable despite higher mortgage rates affecting demand[192] Credit Quality and Loan Performance - Credit quality metrics in the bank loans portfolio remain strong, with improved performance noted in recent quarters[192] - The company monitors credit quality through various metrics, including borrower FICO scores and loan-to-value ratios[195] - The percentage of loans on nonaccrual status was 0.05%, reflecting a slight increase from 0.01%[196] Integration and Strategic Initiatives - The integration of Ameritrade was completed in Q2 2024, converting approximately $1.9 trillion in client assets across more than 17 million accounts, with expected annualized cost synergies of $1.8 billion to $2.0 billion[25][26] - The company completed the final client account conversions from TD Ameritrade in May 2024, marking a significant integration milestone[162]

Charles Schwab (SCHW) , one of the leading brokerage firms in the United States, has seen its stock plunge more than 14% in a month.This fall is steeper than the 7.5% and 6.4% declines of the industry it belongs to and the S&P 500, respectively.One-Month Price PerformanceImage Source: Zacks Investment ResearchWhat Triggered the Sell-off in the SCHW Stock?If you see the above chart, Schwab shares started falling after the second-quarter 2024 results were announced on Jul 16 and are yet to recover.Though SCHW ...

Core Viewpoint - Charles Schwab is taking steps to shrink its bank and mitigate capital and funding-related risks due to significant deposit outflows and rising interest rates, which have negatively impacted its earnings and stock performance [1][5]. Group 1: Financial Performance and Challenges - Charles Schwab has experienced deposit outflows totaling $50 billion, or 32%, from August 2022 to April 2023, as customers shifted funds to higher-yielding assets amid rising interest rates [3]. - The company's net interest revenue fell by 6% year-over-year, and bank deposits decreased by 4% in the recent quarter, indicating ongoing challenges in the current interest rate environment [5]. - Analysts, including those from Bank of America, have lowered their price target for Schwab to $66, citing limited earnings upside and a shift in strategy that could impact future growth [5][6]. Group 2: Strategic Response - CEO Walt Bettinger announced plans to utilize third-party banks to manage excess deposits, aiming to reduce capital intensity and improve liquidity while extending FDIC insurance for clients [5]. - The strategic shift is expected to take years to fully implement and aims to reduce volatility in capital levels and reliance on supplemental borrowing during periods of rising interest rates [6]. - While the strategy is deemed necessary, it is anticipated to weigh on short-term growth and earnings as the company transitions away from its bank-centric model [6].