He’s a baaad man

[The beef 675] [I'm an image] "David Solomon is out here dunking on banks.” - Jeff Hey there carnivores, Markets were down Wednesday as more bank losses and retail numbers came in. Today the number of banks reporting decreased profits rises. Keep raging, Jeff & Jason [Image] [I'm an image] Bad company The next wave of banks reported financials yesterday and the results might make you want to [disregard WHO's warning]( against drinking during the coronavirus. As if you are listening to it anyway... Goldman Sachs, Citigroup, and Bank of America all reported net profit decreases of 46%, 46%, and 45%, respectively, thanks to the impact from the current pandemic. If big banks aren’t safe, who is? Midas touch David Solomon must have made a deal with the devil (apparently the devil hands out private jets now too). Or maybe Goldman’s business model just isn’t as susceptible to a downturn. Despite earning just $3.11 per share compared to analyst estimates of $3.35 per share, Goldman’s [stock price rose yesterday]( during market hours (though it did go red after hours). It turns out that the bank’s trading division had its best quarter for equities and fixed income trading in five-years. Oh, volatility trades...it’s what fin bros dreams (and bonuses) are made of. Fixed income brought in $2.97B, while equities hauled in $2.19B. Firm-wide revenue came in at $8.74B, crushing the $7.92B estimates for Q1. Turning to ash The cards didn’t fall quite the same for Citigroup and Bank of America. Loan-loss reserves dragged down earnings as they put up $4.6B and $3.6B, respectively, for anticipated defaults. So the stimulus check won’t solve everyone’s problems... got it. BOA’s quarterly revenue of $22.8B [matched expectations,]( but its main bugaboo, along with the loan defaults, is lost interest income thanks to J-Poww and his buddies at the Fed bringing rates down so low. Citi saw an [increase in trading profits,]( as Goldman did, but it’s loan loss reserve was too much to overcome. The stock price dropped 5.6% yesterday and is down 46% since “the madness” started in March. Not the good kind of madness, but you knew that. The bottom line... It turns out not all banks are created equal. Who knew? Those banks whose business models rely on loans to make money off of interest (JP Morgan) aren’t faring as well as those who make money through transactions, fees, and trading (Goldman). In fact, Goldman’s loan-loss reserve was just $937M while JP Morgan’s was $8.3B. Being a bank that caters mostly to businesses seems to work out in the former’s favor given the current circumstances. How does that Marcus growth initiative look now, DJ D-Sol? [Image] Super System Offers 30-Day Money-Back Guarantee Ben Sturgill Won 90% Of His Trades In March So Far In April, He Hasn’t Lost A Trade! [I'm an image]( Discover How The Strategy That Consistently Outperforms The Market With Just One Simple Trade Per Day [Watch Now]( [I'm an image] ☑️ Later, Geek Squad. “It’s not goodbye, it’s see you later.” - Best Buy store managers to their employees on Zoom Best Buy will furlough 51k hourly employees starting April 19, because it turns out that there’s not much need for blue shirts when stores are closed. On the plus side, they get 4/20 off. Doors have been shut to the public since March 22, yet curbside pickup is still being offered. Circuit City’s more successful cousin actually saw sales surge in mid-March, as people rushed to the stores (online) to purchase home office equipment, kitchen appliances, and computers to hunker down for the long haul. In addition to the furloughs, executives [will take pay cuts]( and 401k matches have been suspended. ☑️ Drop it low. Retail sales are going [Ester Dean and Chris Brown]( on 'em. US retail sales [fell 8.7% in March](, which, for those keeping tally at home, is the largest decline since retail sales started being tracked back in 1992. This eclipsed the estimated 8% drop by Reuters, and was much steeper than the 0.4% fall in February before social distancing and lockdowns were a thing. In case you’re wondering, yes, the stats factor in all the toilet paper and frozen pizza purchases you’ve been buying in bulk at your local grocer. Food and bev gained 25% from February to March, but that wasn’t nearly enough to make up for the 50% fall in clothing, 27% drop in furniture, or the six other categories that all dropped over 14%. Now go out and spend that $1200! ☑️ I DECLARE BANKRUPTCY. Frontier (*gets excited that it’s the airline*) Communications (*smile fades away*) filed for Chapter 11 bankruptcy Tuesday. It grew out of the 1984 Ma Bell monopoly breakup and is (was?) the number four telephone company behind AT&T, CenturyLink, and Verizon, but has struggled to compete and maintain its customers. This won’t come as a surprise to some, as the communications company skipped an interest payment to bondholders in March. The telecom company [plans to swap out]( $10B of its $11B in unsecured bonds in exchange for 100% equity in the business and hopes to secure a $460M bankruptcy loan from its lenders. Something tells me that investors aren’t super excited to get in on landlines and dial-up. ☑️ Short circuit. Big changes are a comin’... maybe. Morgan Stanley, Citadel, and Blackrock [are considering changes]( to the US stock market’s circuit breakers, with the goal of decreasing the likelihood of a future halt in trading right after the 9:30 AM opening bell. The task force they’re a part of, was formed after the breakers were triggered four times in March during a ‘rona induced sell-off. The potential change would loosen regulations, allowing trading to occur even if it passes the first limit of 7%, but then halting at the next stop of 13%. The group will study data and it’s possible it might not make any changes at all. If they did, it would need to be approved by the SEC. And you know how they feel about change. RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 Neither Raging Bull nor RagingBull.com, LLC (publisher of Raging Bull) is registered as an investment adviser nor a broker/dealer with either the U. S. Securities & Exchange Commission or any state securities regulatory authority. Users of this website are advised that all information presented on this website is solely for informational purposes, is not intended to be used as a personalized investment recommendation, and is not attuned to any specific portfolio or to any user's particular investment needs or objectives. Past performance is NOT indicative of future results. 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