Bank of America, United Airlines, Retail Sales Report


Here for free by going to our special links Zappia dot com slash full Wednesday October sixteenth. Welcome to market flurry. Thanks disaster for supporting market SAP here's the easiest way to automate your work it connects all your business software and handles work for you so you can focus on the things that matter most tries could do no wrong in I mean did the sky was the limit and then you crack open the books there and it wasn't exactly as good as we thought it would that enemy and I I was working there for spell during that time and I it was so amazing to see the attitude when that acquisition was made in the enthusiast the Bank of America is investing a lot in this and it's paying off the thirty eight million digital digital users now we don't talk a lot about Zell I personally aching in digital and the success that they're realizing on the digital front I mean it's not surprising I guess but I think it just goes unnoticed because of the threats does for the longest time the narrative with Bank of America more so it seems to me than the other big banks has I mean it was unbridled enthusiasm Chris like really the feeling there was the Bank of America was taking over the world kin Lewis's results now I mean if we look back last quarter we were talking about how on the surface a lot of these banks were really dealing with a challenging environment just given the you tell me what's what's working better for Bank of America right now is at the consumer banking side or is it the investment banking side well I mean I think the number for straight environment given the uncertainty with the the ongoing trade war market volatility that results from all of this I mean banks were it seems like they had the longest hangover from the great recession Oh in part because of that horrific countrywide acquisition that they made it was a dark you but all all in all I mean the bank is performing very well consumer banking revenue was up three percent loan screwed assails data we'll get to that in a second let's start with Bank of America though third quarter profit and revenue came in slightly higher-than-expected from Bank of America never never even used cell in we have bank of America counseling in our family. Now that doesn't mean Zell isn't isn't doing well here though because when you look at the it's the nationals going to the World Series we've got some earnings we've got some I was GONNA say interesting it is interesting we've got some interesting retail sales numbers are turning in transactions Brazil they have eight point nine million users now came in just under eighty one million per bution from all sides of the business but I tell you what really struck me and going through the report here in in the accompanying presentation is the investments that there may wasn't just the investment banking side but certainly that was the the the star of the core I think I mean heck even in consumer investment accounts grew seven percent for a year ago from Iran remember don't just take your worldview in extrapolate that to the greater market so you've got your family's money with Bank of America my family it's capital Thanks for looking at chain with times yeah I agree and we we certainly saw I mean recently there was this report I think it was an accent I would tell you that it the investment banking side of the business is really performing well in in was was responsible for a lot of the the Abbey man and this is on top of the Wnba Chamber Yes Stanley Cup just a couple of years ago it makes you even wonder why why why are we in a football team here is there a football team I mean does that really qualify football at this point they're they're taking a backseat as they should yes sir dollars went through that network for the court that's almost doubled from a year ago so just because I'm not using it doesn't mean it's not the unused and I think it's a good lesson for investors the person transactions for the core that's close to double what they chalked up a year ago and when you talk about the dollar volume flowing through those networks twenty one billion we but but I mean going back to this to this investment in digital at a really want to shine a light on this because we talk a lot about square pay pal in this war on cash there are efficiencies that are being wrong out of the system here so it's not like that money is going from one bucket into another bucket I mean a lot of times that efficiency efficiency is just taught you know that's that's smart that they're that they're trying to do this and it's it's a you know all things being equal I think it's a good thing that really having a bit of a challenge there and it does it does show you the advantage that the big banks have in their scale but but I mean when you look at this quarter offer came in at a billion dollars that was a little bit higher than expected revenue was sort of even with expectations but they raised guidance for the full year people don't like companies like these when it comes to airlines most of what you're going to see people complaining about cancel flights delayed flights expensive seats getting kicked off their flight crease capacity by three and a half percent this year that that core metric their revenue per available seat mile grew one point seven percent that was in line with their forecasts it was basically like hey at one point I just said so wait is this your venom Oh and the guy was like well yeah kind of like okay it it does look like Bank of America's gaining traction stock up a little bit shares of United Airlines up a little bit this morning as well third quarter I'm willing to bet that ninety nine point nine percent of that is all just total hate people just don't like comcast right they just the customer service is horrible eighty seven nobody knows right animating everybody would would opt for safety I absolutely but I think that it's this whatever Yadda Yadda Yadda don't have comcast I can't speak to it but my point is there is this there is this vibe out there on the consumer side where another layer of uncertainty within the airline industry and it's not evenly distributed some airlines have much a much greater exposure to the seven thirty airlines are thankfully I don't know that I wanna be hopping in one of those things anytime soon in I've got a couple of flights coming up here in the near future airlines are really interesting I mean to report that was talking about this land grab out there in the payment space as the cost of of moving money around is is coming down in their companies ear and I would point out that United Airlines is doing this without the seven thirty seven Max as as most every most all major that are really capturing that and there were opportunities that these big banks were missing in part of that part of that rain two remaining part of it also it's worth remembering that because they don't have the exposure and once the seven thirty seven Max gets fixed all of a sudden united in South West have CAPAC- regulatory or or macro concerns that are beyond my control but airlines often make me think of companies like comcast creating a little a little bit more streamline market but there's no question that the big banks are trying to get in there and capture their share of that of that payment space Are Fixed in everything is getting back to normal in airlines like united are able to integrate more flights back into the road ask and what I mean by that is if you only pay attention to what people's they would consumers save you just scroll through social media search comcast customer service you know whatever that may be but when you look at it from the actual business side I mean there are a lot of reasons to actually consider investing in businesses like these and so from that perspective you could say well their earnings their profitability the potential is is probably a little bit depressed right now I mean the market clear trying to return value to shareholders in one form or another I mean I think share repurchases have have been a really good way ineffective way gotten out in front of it and instead of waiting for problems to arise I mean they've really gone through adjusted their schedules cancelled a lot of flights that we're going to be dependent on this yeah well yeah these are better run businesses buffet who hated airlines forever has bought shares of a bunch of them so I'm going to try and figure out which wants to buy I feel like it's a little bit more difficult just because again it's not that exposure to the seven thirty seven Max is not evenly distributed so Delta Airlines doesn't have the these these are companies that offer up a lot of opportunities simply because of the competitive positions in their respective spaces spaces they servers really important in but seven percent deposits up by three percent a consumer checking accounts up two point three percent total ten years so it is it they're getting on hand I've got I mean I personally have never really had any interest in investing in them they always seem a bit too capital intensive and in beholden to they do see this metric kind of hanging in that area for the rest of the year so I think they said good expectations they raise their guidance a little bit the big unknown is that seventy that we talk about Corwin core out from all of these tech Silicon Valley based company like square straight pay pal and whatnot. It's interesting Z. A. P. E. R. dot com slash fool for your free fourteen day trial that Zappia dot com slash oil so the monthly retail sales number this came out and normally I don't pay a lot of attention to them retail sales in September fell zero point I think that's you know for a number of reasons clearly the airline was scale they can invest their resources wisely fuel costs relatively low they they expect to win Kevin Max and therefore they have more planes that are grounded so in a way it makes it a little bit harder to sort of judge if you're looking at all the airlines and thinking and that that's a little surprising to me well and I think that's all also based on a forecast of I think there was something around two tenths of a point expand it's enough to get it on the show today well yes and as we point out from time to time this is one of those months that Zappia is really great at helping us Zap from one APP to the next and right now through November you can try Zappia free by going Zappia dot com slash integrate them all because when you're going from zoom video to slack to Google docs and back again you can lose track that's just like a day in a life here three percent that certainly doesn't seem like a big number but it's the largest amount since February and I think I have this right that e commerce sales fell month over month there's a little bit more than others you think about incorporating back to school shopping in August and September that's the second most important time of the year for retailers and Haitian because clearly the market's assuming at some point they will it's a matter more of win that that really is kind of a guessing game it's it's very difficult to say there really knows that and so then you have to try to make a judgment as to how much credit is the market giving it four when the time comes that the seven thirty seven issue just a few months back I think we're going to see trade concerns in costs playing into consumers decision making process a bit more this year versus last year one and the most recent conversation I had with someone a capital one Zell came up you know and it was just like Oh okay so I mean what was that converse either way I mean if you're looking at investing airlines I I mean united united clearly looks like a very well managed company they've been focusing for a long time here on over on a fairly consistent basis and I mean it you know they they make healthy amounts of cash long way to airlines are notoriously difficult but well run airlines can certainly uh prices because they just don't fully know exactly how this is all going to shake up an as you raise prices that typically puts a little bit of a stranglehold on consumer behavior in right I mean this that that was it doesn't sound like much on its own but when you compare that to the actual expectations it becomes a little bit more I don't want to say concerning but it's enough to and one of the most successful back to school seasons ever INS in so it's not to draw this this big it's not the paint this picture of all retailer suffering you just gotTa status quo I think it will come to find now is that this trade war is not something that's going to be ending anytime soon and I think most of that aren't really feeling perhaps as good as they won a few I mean there's some really interesting some telling data out there regarding the state of zero or even negative they're the ones that hold the most in credit card debt in so over time this really has only gotten worse ultimately today I'M NOT GONNA make a call here in saying that this is going to happen I wouldn't be surprised though if we are headed for a tougher holiday season maybe some were thinking out of retailers you're seeing a lot of businesses right now small businesses particularly that still have the uncertainty that this trade war presents the raising consumer credit card debt today in there was one there was one data point that struck me as pretty fascinating because if you look across the I think the numbers bear that out I mean if you bought shares of United Five years ago in your owning them today I mean you're sitting on fifteen percent annualized returns and your money is double over the course of the last five years in early the exposure that united or South West so like in Delta's latest quarter are like are they doing really well relative to the competition or are they just doing really well This spectrum of household wealth in in in how much credit card debt these households have households with the lowest net worth bud I mean we are we're going into a very pivotal time of the year out of back to school season now we're getting into the holiday season and I also have to factor in their level of inventory and let's face it some of them are better than others when it comes to managing their inventories yeah there's no question Eh. 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