34.90 +0.35 (1.01%)
After hours: 6:45PM EDT
|Bid||34.67 x 3000|
|Ask||34.90 x 2200|
|Day's range||33.97 - 34.88|
|52-week range||28.00 - 51.65|
|Beta (5Y monthly)||1.25|
|PE ratio (TTM)||13.50|
|Earnings date||16 Jul 2020|
|Forward dividend & yield||0.72 (2.09%)|
|Ex-dividend date||07 May 2020|
|1y target est||38.79|
While Schwab's (SCHW) trading revenues are likely to have improved in Q2 on a rise in client activity amid significant market volatility, interest revenues are expected to have been hurt.
An electric-car speedster, discount brokerage giant, and airport-tethered wellness chain seem pretty vulnerable this week.
(Bloomberg) -- Less than a year since Charles Schwab Corp. reshaped the U.S. discount broker industry with zero-fee trading, a Hong Kong firm is following suit in a move set to deepen the pain for the city’s many hard-pressed trading houses.As of last month, Huatai International, the Hong Kong arm of China’s third largest broker, is no longer charging commissions and platform fees for stock trades, but just a HK$8 ($1) monthly fee. It has seen a surge in customers, gaining more users over the past month than it has over the past three years, according to Zhu Yali, the firm’s head of the fintech and retail business, who declined to give specific numbers.The move could have a knock-on effect across the sector, putting pressure on rivals who are already suffering under thin margins. Battling an influx of online trading and mainland China rivals, growing dominance of big banks, political unrest and an economic slump, Hong Kong’s brokers are closing shop at a record pace this year.Read more: Hong Kong’s Small Brokers Are Disappearing at a Record PaceHuatai is leaning on its deep pockets -- its trading app in China has 7.8 million active monthly users -- and trimmed costs to make up for the lost income, betting it can replicate a mainland strategy of folding new customers into its broader wealth management business. By cutting fees to zero, the broker is forgoing HK$150 million to HK$200 million in fees for every 100,000 clients, according to Zhu.“Hong Kong is a very competitive market,” Zhu said. “Other brokers will have to follow in order to maintain existing client base or to acquire new clients.”Huatai Securities rose as much as 2.3% in early Hong Kong trading. It has gained about 13% so far this year on the back of surging trading volumes amid a boom in China’s market. Charles Schwab’s move to go to zero fees in October quickly shook up the U.S. industry, with domestic discount rivals and even mutual fund giants such as Vanguard and Fidelity following suit. Charles Schwab sealed a $26 billion takeover of rival TD Ameritrade Holding Corp. just a month later.But Hong Kong has features that will make it hard for many brokers to match Huatai. One issue is that they can’t make up for lost income through order flow payments. U.S. brokers are able to provide free trading partly because of this practice, in which they sell customer orders to wholesale market makers who profit off the bid and offer spread.Louis Mak, chief executive officer of low-fee broker I-Access Group Ltd, said passing on retail client trades is considered controversial by many in the industry in Hong Kong. The city only has one stock exchange as well, making it hard for brokers to reap compensation as their U.S. counterparts can from multiple bourses.“That’s why throughout the years Hong Kong brokers’ fee war are genuine price wars,” said Mak, whose firm won’t follow Huatai in offering zero trading fees.Other competitors look at it as a gimmick that’s hard to replicate and that could also be met by suspicion from long-time customers.“They would question how the company could stay afloat with such high rents and fixed costs in Hong Kong,” said Edmond Hui, CEO of Bright Smart Securities. Charging a commission of 0.0668% on trades, Hui is also not budging on the level for his 338,000 clients across the city.Commission income is sizable in Hong Kong. Last year, the city’s brokers earned HK$19.9 billion in such fees, which was down 18% from the previous year. Trading has picked up this year though, stoked by volatility from the coronavirus, helping to ease some of the pain. The average trading commission in Hong Kong is about 0.073%, according to data collected from nine of the most popular brokers.Some 23 of the city’s brokers have ceased trading this year, exceeding last year’s record 22.Big global banks that handle much of the trading in the city are unlikely to be affected since they handle mostly institutional customers.Kenny Wen, a Hong Kong-based wealth management strategist at Everbright Sun Hung Kai Co., is also skeptical that fees can go much lower, saying that the top tier brokerages will need to compete by offering better services and more research support.The small brokerages are “already offering very low commission rates and I don’t think they have much room to cut them further,” he said.(Updates with Huatai shares in the sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Market participants are bracing for the start of what will likely be the weakest corporate earnings season since the global financial crisis, as the coronavirus pandemic and measures to contain it hit business activity especially hard in the second quarter.
Schwab Intelligent Portfolios Premium wins Hybrid Advice Offering category in Aite Group’s 2020 Digital Wealth Management Impact Innovation Awards.
Schwab announced an integration with Google, enabling Google Assistant users to easily and securely access certain Schwab account & portfolio updates
The Charles Schwab Corporation ("Schwab") announced that it has completed its asset acquisition of Wasmer, Schroeder & Company, LLC.
Last week I went over some of the names that I cut loose to raise funds to eventually apply elsewhere, but now it's time to go over some of the other investments I sold, including Sonos (NASDAQ: SONO), Charles Schwab (NYSE: SCHW), and Sleep Number (NASDAQ: SNBR). There's still a lot to like in Sonos. There will be challenges, and last week Sonos announced that it would be eliminating 12% of its workforce as well as shutting down its New York retail store and a half-dozen satellite offices.
(Bloomberg) -- While frenetic buying by retail investors gets all the press for driving the recovery in stocks, the beachhead established by newly minted Robinhood day traders was always a tenuous one. Now Wall Street is getting excited about a potentially bigger and more powerful force that is led by older Americans with more money.It’s a case stock bulls are increasingly drawn to after a stellar second quarter fizzled out in a disappointing June. Equity strategists are eying the intentions of a more affluent middle-aged set that remained mostly unmoved by the frenzy that broke out in chatrooms and elsewhere in April and May, scene of the fastest S&P 500 rally in nine decades.For all the bullishness among the Robinhood crowd, there’s still among older generations a healthy dose of pessimism, a sentiment that appeals to contrarians. Evidence of their skepticism surfaced as money flowed out of equity funds last quarter, vehicles that JPMorgan Chase & Co. says are preferred by older hands. Cash at retail brokerages like Charles Schwab Corp. remain near a record high and the latest survey from the American Association of Individual Investors showed bears outnumbered bulls by a ratio of 2-to-1.“The older generations of U.S. retail investors has been so far more cautious on equities than the new generation,” JPMorgan strategists led by Nikolaos Panigirtzoglou wrote in a note. “The equity buying by retail investors will likely strengthen as the older cohorts, which have so far preferred to extract any remaining value in credit via buying corporate bond funds, will switch later in the year into equity funds.”As everyone knows by now, small-time day traders, armed with stimulus money and possibly in search of distraction with casinos and sports leagues closed, rose up as a formidable force in the rally that began in March and lifted the S&P 500 by 44%. Their presence on the free investing app Robinhood dominated headlines, as favored industries like airlines and hotels roared back in the rebound.According to data compiled by Vanda Research on account openings, to date most of the new money has gone into Robinhood. The platform opened 3 million new accounts from January to early May, more than double the combined openings of Schwab, Interactive Brokers Group Inc. and E*TRADE Financial Corp.One thing researchers have noticed is the demographics of those buyers, which varies depending on their point of entry. The average age of Robinhood investors is around 30, at least 15 years younger than the typical user at TD Ameritrade and Charles Schwab.JPMorgan analysts say there’s reason to believe older users will soon be forced to loosen their own purse strings when it comes to stocks, particularly if the recovery lasts and investors have to embrace more risk taking.At Schwab, clients generally still favor bonds over stocks, according to Liz Ann Sonders, the firm’s chief investment strategist. At the same time, she says, new accounts are skewing toward a younger demographic, a trend that bodes well for the market.“In the last cycle, there was an assumption that we’re never going to get younger folks interested in investing,” Sonders said in an interview on Bloomberg Television. “If we step back and try to find the glass half full here, it is hopeful that we’re attracting younger people to the whole notion of investing.”Read: Wall Street Fixates on a College Side Project Tracking RobinhoodThe direction of retail money has never mattered more than now, in a market where corporate repurchases are dwindling and Goldman Sachs anticipates household demand to step into the void left from a dearth of buybacks. While the frenzy among Robinhood traders has sparked some comparison between today and the dot-com bubble, the broader orientation of retail participation is much less exuberant.Take fund flows. Investors have pulled $7 billion out of mutual and exchange-traded funds that focus on equities since the market’s bottom in March, according to data from Investment Company Institute. That brought the total withdrawals for 2020 to $84 billion.Mike Wilson, chief U.S. equity strategist at Morgan Stanley, notes persistent skepticism among the firm’s rich clients, who are mostly older and may be more sensitive to the Covid-19 health risk. Another source of concern for this cohort, he says, is the uncertainty over the presidential election, but this too shall pass once the economy finds its footing, he said.“We don’t think retail money has been driving the rally but see potential for this as the recovery path becomes clearer,” Wilson wrote in a note. “While it’s unlikely either of these issues will be completely resolved in the near term, we think they will and simply add to the wall of worry that may lead to positive inflows later this year.”And the older generation has abundant money to put to use. Client cash at brokerage firms has stayed elevated despite a second-quarter rally that’s the best since 1998. At Schwab, cash accounted for 14% of client assets in May, a level that before March would have surpassed any time since at least 2014.“Boomers and Gen X investors have plenty of dry powder to buy stocks in the next three to six months,” said Ben Onatibia, a strategist at Vanda. “Keep tracking millennials but don’t forget boomers.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Not everyone in the market is buying hand over fist. Interactive Brokers founder and chairman Thomas Peterffy joins Yahoo Finance to discuss markets.
(Bloomberg) -- More than $8 billion is on the move in Charles Schwab Corp.’s exchange-traded funds, stirring speculation the firm could be adjusting the packaged strategies it offers clients as markets gyrate amid the pandemic.Over the past seven trading days, $4.6 billion has exited from a group of four ETFs including Schwab’s fundamental equity and intermediate-maturity Treasury funds. The firm’s emerging-market equity and inflation-focused bond offerings were among four products to rake in $3.9 billion at the same time.Schwab is the biggest holder of all of the funds, according to the latest available filings.The size of the flows -- more than half of the funds posted at least one record daily flow in the period -- and the broad range of ETFs involved is stirring speculation that Schwab is shifting exposure in its model portfolios.Such prefabricated packages of ETFs offer a one-stop solution to a client’s investment needs. Instead of spending time selecting individual funds, investors can pick a portfolio aligned with their goals and risk tolerance.It’s unclear how much cash follows such models, but it’s thought that when one makes a strategic shift, billions of dollars can move between ETFs.A Schwab spokeswoman declined to comment on whether the flows were a result of model portfolio reallocations, but acknowledged that the firm’s ETFs are used by a variety of such investments throughout the industry. Schwab’s own models run the spectrum from conservative income all the way to aggressive growth, according to its website.It’s not the only theory, however. Some strategists observe that pension fund withdrawals, a brightening outlook for emerging-market assets, or the lurking risk of an inflation uptick could be driving money in and out of the ETFs.Here are five views on what’s behind the Schwab flows:James Pillow, managing director at Moors & Cabot Inc.:With Schwab the largest holder in most of those funds, it probably is them. It makes sense. They were material contributors to equity exposure back in March. Those positions have had significant runs since then, so this looks like some well-earned profit taking. It is likely that pension funds holding these positions are adding to the withdrawals, as many are forced to reallocate some of the recent equity gains. Moving that liquidity to fixed income will keep them within their respective strategic asset allocation.Nate Geraci, president of investment-advisory firm the ETF Store:These certainly look like model portfolio shifts. The one note I’ll add is I think the interest in SCHP may be a bit broader. Given unprecedented government stimulus and Federal Reserve programs, I think some investors are seriously considering inflation for the first time in years. TIPS can serve as an excellent hedge and SCHP is meaningfully less expensive than its nearest competitor TIP.Matt Maley, chief market strategist at Miller Tabak + Co.:It seems like a model portfolio. It could be a move because of the dollar. There’s growing concern the lower dollar is going to raise commodity prices, and the lower dollar obviously is very positive for emerging markets. I wonder if some of this is because some of these individual traders who have become so active are starting to move toward individual stocks. Instead of just buying ETFs, they are saying “I could get a bigger move out of an individual stock.”Athanasios Psarofagis, ETF analyst for Bloomberg Intelligence:Given Charles Schwab is itself the largest holder of each of these products, it is likely the flows are driven by an internal model allocation change.Todd Rosenbluth, CFRA Research’s head of ETF and mutual fund research:This seems like a change in the asset allocation of some possibly in-house models and preferred usage of Schwab’s traditional beta-based ETFs and fundamental-based ETFs. The shift has been away from developed international equities with FNDF and small cap FNDA to emerging markets FNDE. But in addition, large cap SCHX has seen inflows while fundamental FNDX has outflows. FNDX has a value tilt and more exposure to financials and less exposure to information technology stocks than the more core focused SCHX.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Charles Schwab ranks 1 in the large plan segment in the J.D. Power 2020 U.S. Retirement Plan Participant Satisfaction Study.
The Charles Schwab Corporation announced that it has completed the asset acquisition of Motif’s technology and intellectual property.
(Bloomberg) -- Rich hedge fund managers are talking about it. So are not-so-rich millennials. And fast-twitch gamers, and bored sports fans and -- in all likelihood -- some 15-year-olds you know.The “it” is Robinhood Financial’s trading app, which is throwing jet fuel on the speculative fires of coronavirus-era equity markets. Not since the dot-com mania of the 1990s, when starry-eyed day traders dreamed of online riches, has a brokerage platform drawn such a frenzied following. Skeptics warn the hype could set up home-bound novices for disaster.The rush of newbie investors flocking to Robinhood has sparked controversy over how much they’re influencing markets, and whether it’s appealing to those seeking to gamble at a time when casinos are closed and major sporting events are canceled.Robinhood drew more scrutiny this week after a young user’s death, which his family has called a suicide based on a note he left.Alexander Kearns, 20, killed himself after his Robinhood account showed a negative balance of more than $700,000, according to a series of tweets by his relative Bill Brewster. The figure may have been temporary and would have been updated when stocks underlying his assigned options settled to his account, according to Brewster. But Kearns believed it reflected how much leverage he had, according to the note, which was provided to Bloomberg by his family.Robinhood pledged to change elements of its options trading platform on Friday, in response to Kearns’s death. Its co-founders said they would alter how buying power is displayed in the app, and consider additional eligibility requirements for users seeking to employ more advanced options strategies. They also said Robinhood would make a $250,000 donation to the American Foundation for Suicide Prevention. “We are personally devastated by this tragedy,” according to the blog posting written by Baiju Bhatt and Vlad Tenev.“It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood,” they said. “We recognize this profound responsibility, and we don’t take it lightly. Our aspiration is to innovate, lead, and go beyond the status quo.”Trading LossesSome responses to Brewster’s posts show traders grappling with losses in the value of their holdings, while others have highlighted that even teenagers seem to be dabbling in the app.“They’re not super finance-savvy,” Brewster said of Kearns’s family in a phone interview this week. “I don’t even know that they would have known the questions to ask.”Robinhood’s popularity reflects one aspect of modern investing culture, said Alex Caswell, a wealth planner at RHS Financial. It fits into a community that includes everything from Reddit’s Wall Street Bets forum “where everything is seen as one big casino” to FinTwit (financial Twitter), and Barstool Sports’s Dave Portnoy livestreaming his day trading to millions of fans.“There is a culture that has been built around Robinhood,” Caswell said. “That culture doesn’t necessarily just come from the fact that Robinhood exists, rather Robinhood makes that culture easier to exist.”Confetti and RapMenlo Park, California-based Robinhood encourages stock market newcomers with an irreverent tone and mobile-friendly trading system. The app shows confetti shooting when a user makes a trade, and features lists of the most popular stocks on its platform. A business news podcast Robinhood airs, “Snacks Daily,” has used rap lyrics to issue legal disclaimers (“The snacks you’re about to hear ain’t food -- it’s ear candy/They don’t reflect the views of the Robinhood family.”)A Reddit page for Robinhood users has more than 300,000 members who share memes and “really dumb” questions. In April 2019, the page had about half as many members. There’s also a server for the app’s users on Discord, an online communication application originally built for gamers.Robinhood has learning tools listed on its website, and potential investors must complete an eligibility questionnaire before they can trade options. Users must be at least 18 years old to apply for an account.Applications go through a customer identification process that validates names, ages and Social Security numbers, among other details, according to a person familiar with Robinhood’s procedures.Half of Robinhood’s new customers this year have said they are first-time investors, according to the company. More than 2 million new accounts opened in the first quarter, exceeding the number of new users at Charles Schwab Corp., TD Ameritrade Holding Corp. and E*Trade Financial Corp. combined during that period.To accommodate the influx, Robinhood’s customer support team has grown by more than 40% this year, according to the person familiar with the company’s operations. By the end of 2020, it expects to have more than twice the support staff it had in January.Read more: Wall Street Fixates on a College Side Project Tracking RobinhoodBhatt and Tenev, Stanford University classmates, founded Robinhood in 2013 and started selling trading software to hedge funds after graduation. Two years after moving to New York, the pair returned to California to launch Robinhood, which is now worth about $8 billion. Both are billionaires.Earlier this year, as the coronavirus pandemic sparked violent swings in equities worldwide, Robinhood’s trading platform repeatedly failed, leaving millions of customers in the dark. Some pulled their accounts and went to competitors. On Thursday, Robinhood was down temporarily.As much as Robinhood portrays itself as an outsider in the financial world, it earns money in staid, traditional ways. The company relies on the same financial machinery that Schwab, E*Trade and other decades-old trading platforms do.Because the company doesn’t charge trading commissions -- which is now the industry standard for discount brokers -- it collects revenue in other ways. These include collecting interest income from uninvested customer cash, lending out securities and payment for order flow.Those who seek out Robinhood may crave a non-traditional trading experience and are likely to embrace the platform no matter what, said Cait Lamberton, a professor of marketing at the University of Pennsylvania’s Wharton School.“You don’t go to Robinhood unless you want what they’re offering,” she said. “People simply won’t show up who might be dissatisfied with the offer.”(Adds Robinhood changes and statement in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Charles Schwab is honored to congratulate Daniel Berger on his victory at the 2020 Charles Schwab Challenge. With his win, Berger captured the iconic Leonard Trophy and will have his name etched in stone on the Wall of Champions at Colonial Country Club. The victory, and the tournament, marked the PGA TOUR’s successful return to competition after a three month pause and a poignant next chapter for the storied event in Fort Worth.
Fractional shares, which allow someone to own just part of a stock, have exploded in popularity over the last few months.