Medicare Agent News: Banks Turn a Corner

Wednesday, April 19, 2023

Banks Turn a Corner

By Alex Eule | Wednesday, April 19

The Banks Are Okay. Another busy day of corporate news was met with calm on Wall Street. Even notable earnings reports from Netflix, United Airlines, Morgan Stanley, and a key regional bank didn't move the needle by the end of the day, with the S&P 500 finishing down one third of a point, or 0.01%. Traders have settled into the idea of a quarter-point rate increase next month, and earnings have been fine. The result is a collective yawn.

There are still meaningful things happening, though. Shares of Western Alliance Bancorp, which last month was seen among the list of teetering regional banks, reported earnings last night and said that business was doing fine: "Since March 20th, our deposit flow stabilized and returned to a healthy growth trajectory," CEO Kenneth Vecchione told investors.

"Since the collapse of three competitor banks in mid-March our team has worked relentlessly to meet our clients' banking needs," the CEO said, noting that the bank was moving ahead with a "renewed perspective." Western Alliance shares soared 24% on the earnings news.

Wells Fargo analyst Timur Braziler said Western Alliance's results "took existential risk off the table."

The iShares U.S. Regional Banks ETF, which became a proxy for last month's banking turmoil, ended the day up 3.2%. San Francisco-based First Republic was the best performing stock in the S&P 500, rising 12% on the day, though it's still down 88% this year.

Morgan Stanley added to the list of Wall Street banks managing to do just fine, as well, even with dealmaking and IPOs in decline. For the first quarter, Morgan Stanley beat analyst estimates for both profit and revenue.

Shares of Netflix finished the day down 3.2% after it reported first-quarter results in line with estimates, but offered a slightly disappointing second quarter forecast. Some analysts still saw reason to be optimistic about the streaming giant, though. UBS analyst John Hodulik upgraded shares to Buy after the report, writing that Netflix could be the "main beneficiary of easing competition" as other streaming firms focus on profitability.

Among the positives UBS cited were Netflix's coming password crackdown, "which we believe will drive 5%+ upside to revenues in short order."

Netflix says it will begin to enforce stricter rules around account sharing in the U.S. starting this quarter. In some other countries, Netflix has already been charging $8 per user to add additional logins to existing accounts, a crackdown it gently calls "paid sharing."