SOURCE: Five Star Equities
NEW YORK, NY--(Marketwire - Sep 11, 2012) - In the face of a global economic slowdown U.S. bank stocks have shown investors strong gains in 2012. The SPDR S&P Bank ETF (KBE) has gained 18.5 percent this year more than double the Dow Jones gain nearly 9 percent over the same period. Despite having most banks return to profitability since 2010 Moody's Investors Service says the outlook for U.S. banking remains negative. Five Star Equities examines the outlook for companies in the Banking Industry and provides equity research on JPMorgan Chase & Co. (NYSE: JPM) and Morgan Stanley (NYSE: MS).
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"Our negative outlook for the U.S. banking system reflects a challenging domestic operating environment, with prolonged low interest rates, high unemployment, weak economic growth and fiscal policy uncertainties," Senior Vice President Sean Jones said. Jones mentioned that the threat of the Euro zone crisis spreading through the global economy "undermines economic recovery in the U.S. and exposes banks to a heightened risk of shocks."
Moody's forecasts gross domestic product growth to range from 1.5% to 2.5% in 2012, followed by 2% to 3% growth in 2013.
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JPMorgan Chase & Co. is a leading global financial services firm with assets of $2.3 trillion and operations worldwide. The bank is considering lowering 2012 bonuses for their top executives, including Chief Executive James Dimon according to the Wall Street Journal. Mr. Dimon took home $23 million in salary in 2011.
Morgan Stanley Smith Barney President Greg Fleming recently met with brokers to discuss problems caused by their new technology and operations system. "There has been no mass defection threatened, we have not seen any spike in attrition by financial advisers, and we haven't seen an impact on the business," Jim Wiggins, a spokesman for Morgan Stanley said. "Wherever we can make changes to cut through some of the problems that exist and make improvements, we're doing it."
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