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Company Overview - Texas Capital (TCBI) shares increased by 5.1% to $76.05 in the last trading session, with a notable trading volume compared to its previous 0.3% loss over the past four weeks [1] - The company is expected to report quarterly earnings of $1.29 per share, reflecting a year-over-year increase of 61.3%, with revenues projected at $298.92 million, up 12% from the same quarter last year [3] Earnings and Market Sentiment - Solid job market data has led to expectations of interest rate cuts being pushed to later in the year, which is likely to benefit banks' net interest income and margin, resulting in increased investor optimism towards Texas Capital stock [2] - The consensus EPS estimate for Texas Capital has been revised slightly higher in the last 30 days, indicating a positive trend in earnings estimate revisions that typically correlates with stock price appreciation [4] Industry Context - Texas Capital is part of the Zacks Banks - Southwest industry, where Cullen/Frost Bankers (CFR) also operates, having closed 2.3% higher at $129.22 in the last trading session [4] - Cullen/Frost's consensus EPS estimate remains unchanged at $2.27, representing a 2.7% increase from the previous year, and it also holds a Zacks Rank of 3 (Hold) [5]

Report Date - The report was released on June 4, 2025 [2] Global Asset Market Performance 10 - Year Treasury Yields of Major Economies - On June 3, 2025, yields in the US, UK, France, etc. were 4.456%, 4.637%, 3.189% respectively. Latest changes ranged from -0.031% (Switzerland) to 0.053% (US). One - month changes were between -0.069% (Italy and Switzerland) and 0.348% (Japan). One - year changes were from -0.984% (Japan) to 0.378% (UK) [3] 2 - Year Treasury Yields of Major Economies - On June 3, 2025, yields in the US, UK, Germany were 3.920%, 4.021%, 1.781% respectively. Latest changes were from -0.040% (US) to 0.017% (Japan). One - month changes were between -0.040% (US) and 0.224% (UK). One - year changes were from -1.559% (Italy) to 0.410% (Japan) [3] Dollar Exchange Rates Against Major Emerging - Market Currencies - On June 3, 2025, exchange rates against the Brazilian real, Russian ruble, etc. were 5.638, 108.000 respectively. Latest changes were from -1.48% (Brazil) to 0.00% (Russia and Thai baht). One - month changes were between -4.00% (South Africa) and 0.00% (Russia). One - year changes were from -10.12% (Thailand) to 9.59% (Brazil) [3] Exchange Rates of the Renminbi - On June 3, 2025, on - shore, off - shore, and mid - price were 7.188, 7.192, 7.187 respectively. Latest changes were from -0.19% (off - shore) to 0.03% (mid - price). One - month changes were between -1.24% (12 - month NDF) and -0.20% (mid - price). One - year changes were from -0.91% (off - shore) to 1.08% (mid - price) [3] Stock Indices of Major Economies - On June 3, 2025, the S&P 500, Dow Jones Industrial Average, and Nasdaq were 5970.370, 42519.640, 19398.960 respectively. Latest changes were from -0.35% (Mexico) to 1.49% (Nasdaq). One - month changes were between -4.40% (Japan) and 11.19% (Nasdaq). One - year changes were from -7.73% (Malaysia) to 28.89% (Germany's DAX) [3] Credit Bond Indices - Latest changes were from -0.16% (US investment - grade) to 0.30% (emerging - market high - yield). One - month changes were between -0.17% (US investment - grade) and 2.08% (emerging - market high - yield). One - year changes were from 5.61% (US investment - grade) to 12.64% (emerging - market high - yield) [3] Stock Index Futures Trading Data Index Performance - On June 3, 2025, the A - share, CSI 300, SSE 50, ChiNext, and CSI 500 closed at 3361.98, 3852.01, 2687.30, 2002.70, 5694.84 respectively, with daily changes of 0.43%, 0.31%, 0.32%, 0.48%, 0.42% [4] Valuation - PE (TTM) of the CSI 300, SSE 50, and CSI 500 were 12.50, 10.89, 28.78 respectively, with环比 changes of 0.04, 0.03, 0.13 [4] Risk Premium - Risk premiums of the CSI 300, SSE 50, and CSI 500 were 3.70, 5.77, -0.38 respectively, with环比 changes of 0.00, 0.00, 0.00 [4] Fund Flows - Latest values of A - shares, main board, SME board, ChiNext, and CSI 300 were -52.19, -92.88, -56.21, 27.04, 3.71 respectively. Five - day average values were -314.36, -258.20, -56.21, -50.29, -27.17 [4] Trading Volume - Latest trading volumes of the Shanghai and Shenzhen stock markets, CSI 300, SSE 50, SME board, and ChiNext were 11414.09, 2267.83, 590.77, 2513.97, 3071.27 respectively, with环比 changes of 22.30, 273.93, 14.34, -76.51, -139.14 [4] Main Contract Premiums and Discounts - Basis of IF, IH, and IC were -27.21, -18.70, -56.44 respectively, with amplitudes of -0.71%, -0.70%, -0.99% [4] Treasury Bond Futures Trading Data - On June 3, 2025, T00, TF00, T01, TF01 closed at 108.460, 105.690, 108.685, 105.960 respectively, with no daily changes [5] - R001, R007, and SHIBOR - 3M were 1.4641%, 1.5877%, 1.6520% respectively, with daily changes of -24.00 BP, -11.00 BP, 0.00 BP [5]

May 27, 2025 10:12 PM GMT Global Macro Commentary | Global May 27 Sharp super-long JGB rally amid speculation for lower long-end issuance; positive EU and US trade developments support US assets; USTs bull-flatten; miss in France CPI; LatAm currencies outperform; Fed's Barkin warns of effects of uncertainty; DXY at 99.58 (0.5%); US 10y at 4.444% (-6.7bp) Please refer to our recent publications and collaborations (Euro Area Rates Strategy: More Room to Go; Hong Kong Macro Strategy, Economics, Property & Bank ...

Group 1 - The core viewpoint of the articles indicates that Japan's major life insurance companies have significantly reduced their hedging ratio for overseas assets, dropping from 45.2% six months ago to 44.4%, and down from 63% year-on-year, marking a 14-year low [1] - The trend of decreasing hedging has persisted for three years, reflecting a belief that the likelihood of a strong yen is diminishing due to low real interest rates [1][2] - The Bank of Japan's policy rate remains 3 percentage points lower than the country's inflation rate, with market expectations for a rate hike being pushed back, leading to a decline in demand for overseas bonds among life insurance companies [2] Group 2 - Life insurance companies have been forced to reduce their overseas asset holdings, with net sales of foreign bonds amounting to 756 billion yen (approximately 5.3 billion USD) over the past six months, marking the seventh consecutive period of such sales [3] - The outlook for the yen remains bleak, but a potential rate cut by the Federal Reserve could change the situation, as it may lower the currency hedging costs for Japanese investors [4] - The demand for currency hedging is expected to rebound if the Federal Reserve resumes rate cuts, which could lead to increased urgency among life insurance companies to hedge against currency risks [4]

Bond Market Fundamentals - The bond market serves as the foundation for all markets, acting as the backbone [1] - It establishes the risk-free interest rate, influencing all asset returns [1] - A breakdown in the bond market's supply-demand balance leads to rising long rates relative to short rates and currency depreciation [1] - Gold prices increase due to movement away from the bond market caused by supply-demand imbalances [2] Central Bank Dilemma - Supply-demand imbalances in the bond market pressure central banks [2] - Central banks face a choice between allowing interest rates to rise, negatively impacting markets and the economy, or printing money to buy bonds [3] - Printing money to meet bond demand creates inflationary pressures [3]

Summary of Key Points from Conference Call Industry Overview - The conference call primarily discusses the bond market and macroeconomic conditions in China, focusing on government bonds and monetary policy implications. Core Insights and Arguments - **Government Bond Issuance**: Last week, the issuance of government bonds reached 2.3 trillion, leading to increased funding demand and a tightening of the financial environment [1] - **Financing Demand Trends**: Since April, a decline in financing demand has driven down funding prices, with actual interest rates rising, potentially leading to further contraction in financing demand and an improvement in bank liability gaps, suggesting a more relaxed overall financial environment [1][7] - **Government Bond Supply**: The supply of government bonds in Q2 is expected to be limited compared to Q1, with net financing reaching a new high since November last year, indicating that the peak impact of government bond supply may have passed [1][8] - **Central Bank Liquidity**: The central bank has injected significant liquidity but shows no intention of major easing, maintaining a cautious stance on monetary policy despite the current low inflation [1][10] - **Key Observational Indicators**: The most critical indicators are the liability pressure on large banks and their inventory levels, which reflect potential risks in the financial system [1][11] - **Interest Rate Predictions**: Overnight rates are expected to remain between 1.4% and 1.5%, while term rates are projected to be between 1.5% and 1.6%, indicating continued pricing of funding inventory [1][14] Additional Important Insights - **Impact of Fiscal Deposits**: The accumulation of fiscal deposits has significantly influenced liquidity, with a notable increase of 1.2 trillion in the first four months of the year, which is expected to decline as the peak of fiscal supply passes [1][9] - **Market Sentiment**: Recent tightening of funds, particularly on Fridays, has affected market sentiment, with fluctuations in overnight and 7-day rates [3][4] - **Economic Growth Dependency**: The economy's reliance on external demand is highlighted, with a shift from steep yield curves to flatter ones anticipated due to weakening internal demand indicators [2][15][17] - **Investment Strategy Recommendations**: Investors are advised to adapt their strategies based on the changing yield curve shapes, as the overall liquidity risk in the market is expected to remain low in the coming months [2][18] This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the bond market and macroeconomic conditions in China.

Economic Indicators - The Nasdaq Composite, S&P 500, and Dow Jones Industrial Average gained 2.69%, 1.95%, and 0.58% respectively in the last trading week [1] - The consumer price index (CPI) rose by 0.2% in April, with a year-on-year increase of 2.3%, the lowest since February 2021 [2] - The producer price index (PPI) declined by 0.5% in April, with a 12-month increase of 2.4% [2] - Retail sales increased by 0.1% in April, aligning with market expectations [2] - Consumer sentiment index fell to 50.8% in May, the lowest in its history [2] Company Performance - IHS Holding Limited's shares increased by 33.6% since being upgraded to Zacks Rank 1 on March 21 [3] - British Land Company PLC returned 16% since its upgrade to Zacks Rank 2 on March 21 [4] - Stantec Inc. and Bankinter, S.A. saw share increases of 21.4% and 10.8% respectively after their upgrades to Outperform [8] - Axon Enterprise, Inc. and Quanta Services, Inc. gained 23.6% and 18.1% respectively over the past 12 weeks [11] Portfolio Performance - The Zacks Model Portfolio of Rank 1 stocks outperformed the S&P 500 index by over 12 percentage points since 1988, with an annualized average return of +23.5% [5][7] - The Zacks Focus List portfolio returned +18.41% in 2024, compared to +25.04% for the S&P 500 index [12] - The Earnings Certain Admiral Portfolio (ECAP) returned +3.20% in Q1 2025, outperforming the S&P 500 index's -4.30% decline [16] - The Earnings Certain Dividend Portfolio (ECDP) returned +5.74% in Q1 2025, compared to the S&P 500 index's -2.41% pullback [19] Long-term Performance - The Top 10 portfolio has produced a cumulative return of +1832.3% since 2012, significantly outperforming the S&P 500 index's +434.2% [22] - The Zacks Focus List portfolio has an annualized return of +11.33% since 2004, compared to +9.95% for the S&P 500 index [14]

Core Insights - Warren Buffett's Berkshire Hathaway fully sold over 14.6 million shares of Citigroup in Q1 2025 as part of a broader reduction in financial sector holdings [1][2] - Citigroup is undergoing significant restructuring, including a plan to eliminate 20,000 jobs over two years to streamline operations and reduce expenses [4][5] Financial Performance - Citigroup's net interest income (NII) for Q1 2025 was reported at $14 billion, a 4% increase year-over-year, benefiting from lower funding costs [11] - Management expects expenses to be below $53.4 billion in 2025, down from $53.9 billion in 2024 [6] Business Strategy - Citigroup is focusing on core operations by exiting consumer banking in 14 markets and has already completed exits in nine countries [7][8] - The company aims for a compounded annual revenue growth rate of 4-5% by the end of 2026 and anticipates annualized run rate savings of $2-2.5 billion by 2026 [10] Liquidity and Capital Position - As of March 31, 2025, Citigroup's cash and investments totaled $761 billion, with total debt at $317.4 billion [14] - The common equity tier 1 (CET1) capital ratio was 13.5%, indicating a strong capital base to support distribution activities [15] Valuation Metrics - Citigroup is trading at a forward 12-month price-to-earnings (P/E) ratio of 9.50X, below the industry average of 13.80X, suggesting it is undervalued [19][22] - The stock has gained 20% over the past month, outperforming the S&P 500's growth of 11.9% [17] Future Outlook - Citigroup's ongoing restructuring and focus on core operations provide a solid foundation for growth, with expectations for improved financial performance in the upcoming periods [23][29] - The Zacks consensus estimates project year-over-year growth in sales and earnings, indicating positive momentum for the company [24][28]