- Some large banks and credit card stocks may be more volatile over the next week after the Federal Reserve's stress test hit the capital of some financial institutions more than they expected, Bloomberg reports, citing a note by Morgan Stanley's Betsy Graseck.
- Numbers may not "tell the whole story," Graseck writes, referring to comments Goldman Sachs (NYSE:GS) made after the test results were released.
- GS's tested supplementary leverage ratio was the lowest of the banks tested at 3.1, just above the minimum of 3.0 to pass. Next lowest was Morgan Stanley (NYSE:MS) at 3.3, then State Street (NYSE:STT) at 3.7.
- GS -0.26% in premarket trading; MS -0.38%, STT -0.19%.
- GS said its models "diverged" from the Fed's; it expects to discuss the results with regulators.
- Graseck says GS sees "reasonable possibility" of getting close to $5B-$6B in 2018 total buybacks.
- She sees potential winners in the stress test: Ally Financial (NYSE:ALLY), BB&T (NYSE:BBT), Bank of New York Mellon (NYSE:BK), Huntington Bancshares (NASDAQ:HBAN), Northern Trust (NASDAQ:NTRS), and US Bank (NYSE:USB).
- Previously: U.S.'s largest banks would be able to lend in `severe' global recession: Fed (June 21)
Bank stocks likely to be more volatile on stress test results: Morgan Stanley
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| Symbol | Last Price | % Chg |
|---|---|---|
| GS | - | - |
| The Goldman Sachs Group, Inc. | ||