At the fundamental, financial services stocks and ETFs are contending with issues such as increased regulatory costs and a summer swoon in trading revenue.
Between the end of 2013 and the end of 2007, regulatory costs increased by over 100%, or $35.5 billion, to $70.2 billion for Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), JP Morgan Chase (NYSE: JPM), Morgan Stanley (NYSE: MS) and Wells Fargo (NYSE: WFC), reports Saabira Chaudhuri for the Wall Street Journal. The costs are specific to these banks, along with others with assets over $50 billion, due to their size and perceived risk. [Regulatory Burdens Hinder Bank ETFs]
In a move that is nothing short of impressive, the iShares US Broker-Dealers ETF (NYSEArca: IAI) entered Thursday with a July gain of nearly 3%. That despite a spate of updates from Wall Street banks that said trading revenue slid in the second quarter. Conventional wisdom says if things were boring on Wall Street in May or June, July and August could be even slower. [Summer Blues for Broker-Dealers ETFs]
Financial Select Sector SPDR
Chart Courtesy: Andrew Thrasher, CMT