The Federal Reserve is putting fresh limits on the U.S. banking industry after annual stress tests found that several institutions could get close to minimum capital levels in scenarios tied to the coronavirus pandemic. Big banks will be required to suspend share buybacks for the third quarter (most of them already paused repurchases in Q2) and limit dividend payments at their current level. While "all large banks remain strongly capitalized," the Fed - for the first time in the decade-long history of the stress test - is requiring banks to resubmit updated capital plans later this year. (Bloomberg)
Shares of the Nike are down nearly 4% premarket on the back of an unexpected quarterly loss and a sales decline of 38% Y/Y. Results were significantly impacted by the closings of stores during global lockdowns, though digital sales soared 75%, representing about 30% of total revenue. Expenses for shipping and returns also put more pressure on Nike's profits - gross margin came in at 37.3% of sales vs. 45.7% a year ago. (CNBC)
Shares of Albertsons will begin trading this morning on the NYSE, which was shuttered for two months because of the coronavirus pandemic. Existing shareholders raised $800M yesterday, less than anticipated, after the company’s IPO priced at $16 apiece, below its $18-$20 per share target range and valuing Albertsons (ACI) at around $9.3B. Even at that size, the listing will be one of the larger IPOs at the Big Board so far this year. (FT)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.