Posted January 20, 2021
By Byron King
Bank Stock Resolution in 2021
A reader writes in with how he gives back: I was very fortunate to be kept on at work for quite awhile, and when I did have to go on unemployment, the extra $600 was available. Unemployment ran out just as I went back to work.
Ive been able to contribute to a couple GoFundMe pages. One was for a fellow at work who was in a horrific auto accident.
Ive also given to a private business, Morning Star Tile, thats partnered with the Maine Community Action Partnership (MeCap) to help seniors with home heating costs. My mother (now deceased) was from Maine, so this one felt right.
And this isnt really a charity, but I always give above the suggested amount to our delivery drivers (Instacart, Walmart, Doordash, etc). Sent money at Christmas to friends/relatives who I knew weren't working. Paid a couple of utility bills for them. Gave a friend $2k towards a car. Things like that.
I've also signed up to be a recurring donor to Wikipedia this year. I use it a lot, so I should be contributing. The Audubon Society is another. It's not a lot ($10-20 per month), but it adds up.
Every little bit helps. Well said and well done.
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Your Rundown for Wednesday, Jan. 20, 2021
Banking On It
Guess who needs no charity whatsoever? Big U.S. banks that almost universally had exceptional fourth quarters in 2020.
In particular, Morgan Stanleys earnings jumped 51% in the final three months of the year, sending profits at the US bank to a record annual high and capping a strong results season across Wall Street driven by a boom in trading and fundraising, according to The Financial Times.
And there were earning beats across the board
Net income? $3.39 billion versus $2.24 billion in Q4 2019. Earnings per share for the three months, at $1.81, were significantly higher than the $1.25 predicted.
Morgan Stanley CFO Jon Pruzan says: We saw exceptional support from central banks and strong fiscal policy support during the health crisis We enter 2021 in probably the best position weve been in in over a decade the brand is in great shape and we have nice momentum.
So are bank stocks right for your portfolio?
Overall, banks weathered the first major shock since the Panic of 2008 although, as a sector, they lagged the S&P 500 index. (Notwithstanding, they got more than a little help from the Fed.)
And after passing bank stress tests in December, banks are cleared for stock buybacks. In fact, buybacks by the nation's six largest banks, according to Yahoo Finance, could approach $11 billion in the first quarter alone.
Barclays analysts single out three bank stocks that might catch a tailwind in 2021, including Morgan Stanley (MS) with 47% upside, Goldman Sachs (GS) with 34% upside and Ally Financial (ALLY) with 17% upside.
Resolve: invest in these bank stocks in 2021.
Market Rundown for Wednesday, Jan. 20, 2021
S&P 500 futures are up 23 points to 3,813.
Oils up 1.5% to $53.77 for a barrel of WTI.
Gold is up $9.70 to $1,849.90 per ounce.
Bitcoin is down 3.4% to $34,938.
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Well be back Friday. Until then, take care.
For the Rundown,