MarketsJul 1, 2024
Wall Street Giants Tease Higher Dividends After Passing Fed Stress Tests
Banking Resilience
Daniel Schoester
America’s banking elite is once again proving that “the house always wins.” Despite commercial real estate (CRE) anxieties, Wall Street juggernauts flexed their financial muscles in the Fed’s annual stress tests. All 31 mega-banks passed with flying colors, setting the stage for dividend hikes and share buyback plans.
- Wells Fargo, Bank of America, and Citigroup raised their dividends by 14%, 8%, and 5.7%, respectively — while JPMorgan Chase hiked its dividend and announced a share buyback.
- The Financial Select Sector SPDR Fund now has a 1.59% dividend yield, and further hikes could attract more investors as earnings season approaches.
A tale of two banks: While Wall Street thrives, regional banks struggle, highlighting a growing sector divide. This is emphasized by their stock returns, with returning 10% over the past six months, eclipsing the −7% return of the SPDR S&P Regional Banking ETF during the same time. David doesn’t seem to be beating the goliath, and all eyes will be on these financial powerhouses as we enter earnings season.
