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Mastercard extended its collaboration with The Clearing House today to allow customers and businesses to use real-time payments. Mastercard will be the exclusive instant payments software provider for The Clearing House’s (TCH) RTP network, according to a news release from Mastercard. TCH’s RTP network has been gaining traction since the launch of FedNow, with more […]
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The Reserve Bank of India said there will be no transactions and settlements in government securities (primary and secondary), foreign exchange, money markets and Rupee Interest Rate Derivatives on January 22, 2024.
This comes in the wake of the Maharashtra Government declaring January 22, 2024 as a public holiday to observe “Shree Ram Lalla Pran Pratishtha Din” (Ram temple consecration) under Section 25 of the Negotiable Instruments Act, 1881.
Settlement of all outstanding transactions will accordingly get postponed to the next working day — January 23, 2024, per a RBI statement.
The 3-day Variable Rate Repo (VRR) auction (which infused ₹50,007 crore liquidity into the banking system) conducted on Friday with date of reversal on January 22, 2024 will now be reversed on January 23, 2024.
The 3-day VRR auction for ₹1.25 lakh crore that was to be conducted on January 22 has been cancelled. Instead, a 2-day VRR auction for ₹1.25 lakh crore will be conducted on January 23, 2024.
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In 2023, financial institutions continued to look to third-party vendors for innovative solutions to enhance their offerings. A December report by Scottdale, Ariz.-based bank and fintech advisory company Cornerstone Advisors of Arizona said U.S. banks are most eager to partner in the following three areas: Payments and money movement; Fraud and risk management; and Mobile […]
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Nvidia Corp. is raking in billions in cash, but one analyst thinks the chip maker could throw $100 billion more onto the pile if it started to look more like Salesforce Inc.
Nvidia
NVDA,
might unlock even more cash by developing businesses that expand recurring revenue, according to BofA Securities analyst Vivek Arya. The company has suffered some boom-and-bust cycles in recent years, and another bust could be smoothed by developing longer-term software contracts akin to those of Salesforce
CRM,
, Workday Inc.
WDAY,
and ServiceNow Inc.
NOW,
which generate recurring revenue from their customers.
Arya sees a pathway for Nvidia to rake in $100 billion in incremental free cash flow over the next two years if it can bulk up its own recurring-revenue options.
Read: Apple’s stock needs to get ‘unstuck’ — and its innovation rut may not be helping
“While NVDA has a solid lead in AI, hardware-oriented businesses are not valued as highly as visibility tends to be limited,” Arya wrote. Nvidia generates only about $1 billion, or 2%, of its sales from software and subscriptions. Arya doesn’t think the company can get much higher than $5 billion with its software and subscription offerings unless it turns to acquisitions.
Nvidia has shown some openness to deals that would beef up its intellectual property and software offerings, Arya notes, as it tried to buy British chip designer Arm Holdings
ARM,
before facing regulatory pushback.
“We envision [Nvidia] considering more enhanced partnerships/M&A of software companies that are helping traditional enterprise customers deploy, monitor and analyze [generative AI] apps,” he wrote. Nvidia “is already serving them via on-premise hardware and/or its DGX cloud service, but we believe greater direct recurring software/service channel could be more impactful.”
The addition of more recurring-revenue streams could help Nvidia’s “relatively depressed trading multiple,” in Arya’s view. Nvidia shares trade at a 20% to 30% discount to its “Magnificent Seven” peers on the basis of price to earnings as well as enterprise value to free cash flow, even though the company’s compound annual growth rate on the top line is three times what it is for those other tech giants.
The discount is “partly due to uncertainty in [calendar 2025] growth prospects, and partly due to a very hardware-dependent business unlike other large-cap software/internet peers that have recurring-revenue profiles,” he wrote.
Arya has a buy rating and $700 price objective on the stock.
See also: Amazon’s stock could be helped by this secret weapon in 2024, BofA says
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(Updated with Friday’s closing prices.)
The 2023 rally for stocks in the U.S. accelerated as more investors bought the idea that the Federal Reserve succeeded in its effort to bring inflation to heel.
The S&P 500
SPX
ended Friday with a 24.2% gain for 2023, following a 19.4% decline in 2022. (All price changes in this article exclude dividends). Among the 500 stocks, 65% were up for 2023. Below is a list of the year’s 20 best performers in the benchmark index.
This article focuses on large-cap stocks. MarketWatch Editor in Chief Mark DeCambre took a broader look at all U.S. stocks of companies with market capitalizations of at least $1 billion, to list 10 with gains ranging from 412% to 1,924%.
The Fed began raising short-term interest rates and pushing long-term rates higher in March 2022 by allowing its bond portfolio to run off. That explains the poor performance for stocks in 2022, as bonds and even bank accounts because more attractive to investors.
The central bank hasn’t raised the federal-funds rate since moving it to the current target range of 5.25% to 5.50% in July, and its economic projections point to three rate cuts in 2024.
Investors are anticipating the return to a low-rate environment by scooping up 10-year U.S. Treasury notes
BX:TMUBMUSD10Y,
whose yield ended the year at 3.88%, down from 4.84% on Oct. 27 — the day of the S&P 500’s low for the second half of 2023.
Read: Treasury yields end mostly higher but little changed on year after wild 2023
Before looking at the list of best-performing stocks of 2023, here’s a summary of how the 11 sectors of the S&P 500 performed, with the full index and three more broad indexes at the bottom:
| Sector or index | 2023 price change | 2022 price change | Price change since end of 2021 | Forward P/E | Forward P/E at end of 2022 | Forward P/E at end of 2023 |
| Information Technology | 56.4% | -28.9% | 11.5% | 26.7 | 20.0 | 28.2 |
| Communication Services | 54.4% | -40.4% | -7.6% | 17.4 | 14.3 | 21.0 |
| Consumer Discretionary | 41.0% | -37.6% | -11.4% | 26.2 | 21.7 | 34.7 |
| Industrials | 16.0% | -7.1% | 8.0% | 20.0 | 18.7 | 22.0 |
| Materials | 10.2% | -14.1% | -4.9% | 19.5 | 15.8 | 16.6 |
| Financials | 9.9% | -12.4% | -3.4% | 14.6 | 13.0 | 16.3 |
| Real Estate | 8.3% | -28.4% | -21.6% | 18.3 | 16.9 | 24.7 |
| Healthcare | 0.3% | -3.6% | -3.3% | 18.2 | 17.7 | 17.3 |
| Consumer Staples | -2.2% | -3.2% | -5.4% | 19.3 | 20.6 | 21.4 |
| Energy | -4.8% | 59.0% | 51.8% | 10.9 | 9.8 | 11.1 |
| Utilities | -10.2% | -1.4% | -11.4% | 15.9 | 18.7 | 20.4 |
|
S&P 500 SPX |
24.2% | -19.4% | 0.4% | 19.7 | 16.8 | 21.6 |
|
Dow Jones Industrial Average DJIA |
13.7% | -8.8% | 3.8% | 17.6 | 16.6 | 18.9 |
|
Nasdaq Composite COMP |
43.4% | -33.1% | -3.5% | 26.9 | 22.6 | 32.0 |
|
Nasdaq-100 NDX |
53.8% | -33.0% | 3.5% | 26.3 | 20.9 | 30.3 |
| Source: FactSet | ||||||
A look at 2023 price action really needs to encompass what took place in 2022 for context. The broad indexes haven’t moved much from their levels at the end of 2022 (again, excluding dividends). We have included current forward price-to-earnings ratios along with those at the end of 2021 and 2022. These valuations have declined a bit, which may provide some comfort for investors wondering how likely it is for stocks to continue to rally in 2024.
Here are the 20 stocks in the S&P 500 whose prices rose the most in 2023:
| Company | Ticker | 2023 price change | 2022 price change | Price change since end of 2021 | Forward P/E | Forward P/E at end of 2022 | Forward P/E at end of 2021 |
| Nvidia Corp. |
NVDA, |
239% | -50% | 68% | 24.9 | 34.4 | 58.0 |
| Meta Platforms Inc. Class A |
META, |
194% | -64% | 5% | 20.2 | 14.7 | 23.5 |
| Royal Caribbean Group |
RCL, |
162% | -36% | 68% | 14.3 | 14.9 | 232.4 |
| Builders FirstSource Inc. |
BLDR, |
157% | -24% | 95% | 14.2 | 10.7 | 13.3 |
| Uber Technologies Inc. |
UBER, |
149% | -41% | 47% | 56.9 | N/A | N/A |
| Carnival Corp. |
CCL, |
130% | -60% | -8% | 18.7 | 41.3 | N/A |
| Advanced Micro Devices Inc. |
AMD, |
128% | -55% | 2% | 39.7 | 17.7 | 43.1 |
| PulteGroup Inc. |
PHM, |
127% | -20% | 81% | 9.1 | 6.3 | 6.2 |
| Palo Alto Networks Inc. |
PANW, |
111% | -25% | 59% | 50.2 | 38.0 | 70.1 |
| Tesla Inc. |
TSLA, |
102% | -65% | -29% | 66.2 | 22.3 | 120.3 |
| Broadcom Inc. |
AVGO, |
100% | -16% | 68% | 23.2 | 13.6 | 19.8 |
| Salesforce Inc. |
CRM, |
98% | -48% | 4% | 28.0 | 23.8 | 53.5 |
| Fair Isaac Corp. |
FICO, |
94% | 38% | 168% | 47.1 | 29.3 | 28.7 |
| Arista Networks Inc. |
ANET, |
94% | -16% | 64% | 32.7 | 22.3 | 41.4 |
| Intel Corp. |
INTC, |
90% | -49% | -2% | 26.6 | 14.6 | 13.9 |
| Jabil Inc. |
JBL, |
87% | -3% | 81% | 13.5 | 7.9 | 10.3 |
| Lam Research Corp. |
LRCX, |
86% | -42% | 9% | 25.2 | 13.5 | 20.2 |
| ServiceNow Inc. |
NOW, |
82% | -40% | 9% | 56.0 | 42.6 | 90.1 |
| Amazon.com Inc. |
AMZN, |
81% | -50% | -9% | 42.0 | 46.7 | 64.9 |
| Monolithic Power Systems Inc. |
MPWR, |
78% | -28% | 28% | 49.1 | 27.3 | 57.9 |
| Source: FactSet | |||||||
Click on the tickers for more about each company.
Don’t miss: Nvidia tops list of Wall Street’s 20 favorite stocks for 2024
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In a strange flashback to the demise of Bed Bath & Beyond Inc., WeWork Inc.’s stock soared on its over-the-counter debut this week, just days after the office sharing company filed for chapter 11 bankruptcy protection.
WeWork
WEWKQ,
filed for Chapter 11 in New Jersey on Monday and the beleaguered company’s stock was halted before the open that day. The New York Stock Exchange started the delisting process for WeWork that same day.
Trading resumed over the counter on Wednesday, with WeWork shares ending their first session as an OTC stock up 91.5%.
A similar scenario happened when shares of Bed Bath & Beyond began trading over the counter in May after the Nasdaq started the delisting process for the bankrupt home-goods retailer and sometime meme-stock darling. Despite Bed Bath & Beyond’s well-documented woes, the stock ended its first session as an OTC stock up 30.4%. Bed Bath & Beyond’s shares were canceled in September.
In June Overstock.com acquired Bed Bath & Beyond’s intellectual property, and began operating as Bed Bath & Beyond, before changing its corporate name to Beyond Inc.
BYON,
Like Bed Bath & Beyond, WeWork has continued to attract investor attention even as the company’s problems mounted. In mid-September WeWork’s stock saw a record run-up amid meme stock chatter, just weeks after WeWork warned that it may not be able to stay in business.
Related: WeWork files for bankruptcy, capping a stunning downfall
Users on social media noted the activity in WeWork’s share price this week, with Twitter user @asunapg warning Thursday that the OTC markets are “much more volatile and often a death trap for a lot of companies.”
“Here we go again” tweeted @B2Investor Friday, with popcorn and clown emojis.
WeWork’s stock ended Thursday’s session down 21.3% and the stock is down 12.7% Friday, compared with the S&P 500 index’s
SPX
gain of 1.3%.
Related: Why investors gamble on shares of bankrupt companies — Bed Bath & Beyond, for example
Tom Bruni, head of content at StockTwits, a social platform for investors and traders, told MarketWatch that, from what he is seeing, there doesn’t seem to be broad interest in the stock.
“Unlike Bed Bath & Beyond and others where it seemed possible to restructure and continue operating, the current situation for WeWork is mainly a math equation,” he told MarketWatch. “It’s looking most likely that it’ll be bought out, the question is at what price and how much cash (if anything) does that leave for common shareholders to receive? The consensus right now is that all value from its 52 million shares of common stock will be wiped out.”
Set against this backdrop, short covering could be driving the stock price up in the short term, according to Bruni. “Many market participants don’t want to risk being squeezed by unexpected good news, so they’d rather take their gains than ride it all the way down to zero,” he said. “Should that high short interest start to create sustainable upside momentum (more than a few days), then we’d likely see other traders get involved on the long side.”
“But for now, with earnings season in full swing, there’s plenty of volatility and news elsewhere for investors/traders to focus on,” he added.
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Shares of real-estate names plunged Tuesday following a jury ruling that has the potential to shake up the way people purchase homes.
A Missouri jury earlier Tuesday deemed that the National Association of Realtors, HomeServices of America and Keller Williams colluded to inflate or maintain high commission rates. Jefferies analyst John Conaltuoni said in a note to clients that a judge could issue an injunction preventing commission sharing on MLSs, or multiple listing services, which would hurt the buyer-agent business.
Shares of Opendoor Technologies Inc.
OPEN,
plunged 9% on Tuesday, while shares of Zillow Group Inc.
ZG,
Z,
fell 7%, shares of Redfin Corp.
RDFN,
dropped 6% and shares of RE/MAX Holdings Inc.
RMAX,
declined 4%.
Conaltuoni thinks the recent ruling could bring big changes to the Participation Rule, which is an NAR requirement for seller agents to disclose the compensation being offered to buyer agents when they list through an MLS. The Participation Rule could soon get banned or turn optional, in his view.
Such a ban “would cause negotiations about buyer agent commissions to occur when an offer is presented, since there would no longer be an avenue to communicate splits up front,” he wrote. “This would eliminate the seller’s incentive to compensate buyer agents, which would force them to seek compensation directly. Shifting the burden of payment to buyers would likely meaningfully reduce their use of agents given most already struggle to cover closing costs.”
Conaltuoni further commented that were the rule to become optional, the “status quo” likely would continue.
Read: Why aren’t homeowners selling their homes? It’s not just the ‘lock-in effect’
What would these developments mean for Zillow, which reports earnings Wednesday afternoon? He flagged that nearly two-thirds of the company’s revenue comes from its Premier Agent business, which itself is primarily made up of revenue from buyer agents. “[A] reduction in their usage would force [Zillow] to pivot to offering products for seller agents and create near-term headwinds to revenue,” he wrote, while cutting his price target on Zillow’s stock to $48 from $60.
Bernstein’s Nikhil Devnani wrote that Zillow “is NOT part of this case and not directly impacted by the ruling,” but there’s the potential for repercussions down the line.
“Premier Agent is built around buyer commissions,” Devnani said. “And a reduction to commission rates (which could happen if cooperative compensation were outright banned in the worst case scenario) would create challenges for industry revenue growth, in our view. Maintaining the current structure with more transparency would have less impact we believe. It would need a stronger decoupling of who pays for buyer and seller agents.”
While Redfin shares dropped Tuesday along with other names, Chief Executive Glenn Kelman put out a blog post titled: “Change Comes to the Real Estate Industry.”
“The judge may take days or weeks to decide what structural changes the jury’s verdict will entail,” he wrote, and appeals could take years.
But traditional brokers “will undoubtedly now train their agents to welcome conversations about fees, just as Redfin has been doing for years, especially when advising a seller on what fee to offer to buyers’ agents,” he continued. “Rather than saying that a fee for the buyers’ agent of 2% or 3% is customary or recommended, agents will say that a buyers’ agent fee, if one is offered at all, is entirely up to the seller. This is as it should be.”
RBC Capital Markets analyst Brad Erickson wrote after the ruling that just over half of Redfin transactions come from the buyside. Its stock and Zillow’s “partially reflected these risks coming in,” in his view.
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Updated Oct. 26, 2023 12:05 am ET
With China’s property bust threatening to sink the country’s economic recovery, Xi Jinping is looking for someone to blame.
After putting the billionaire founder of Evergrande, a heavily indebted property firm, under investigation for possible crimes, Beijing is expanding its probes to include bankers and financial institutions that facilitated developers’ risky behavior, people familiar with the matter say.
Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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Payments behemoth Mastercard has joined forces with JPMorgan Chase to provide customers with a pay-by-bank option.
Pay-by-bank can be used by billers for recurring payments like rent, utilities, health care and tuition, among others, according to an Oct. 20 Mastercard release.
The capability taps into Mastercard’s open banking technology to allow consumers and businesses to safely share their data to easily access a variety of financial services, a Mastercard spokesperson told Bank Automation News.
Telecom service provider Verizon will be the first to use this payment channel for its customers, according to the release, and Mastercard expects more billers to join the payment channel in the coming months.
The card giant is not the only FI getting into pay-by-bank; Bank of America is also exploring expanding its pay-by-bank offering in the United States, although it is already available in the United Kingdom.
JPMorgan Payments has selected identify verification platform Trulioo to help crack down on fraud and other financial crimes.
Vancouver, Canada-based Trulioo will provide JPMorgan with its Person Match and Identity Document Verification solutions to verify a person’s identity and provide business verification, according to a recent JPMorgan release.
“We chose the platform because of its breadth of personally identifiable data sources, impressive match rates and global footprint,” Ryan Schmiedl, managing director and global head of payments trust and safety at JPMorgan, said in the release. “Trulioo has the trusted authentication and verification experience we want to offer clients and additional layers of protection from fraud during the onboarding experience and beyond.”
Trulioo uses data points from 190 countries, including personally identifiable information, government documents, biometrics and business names in order to verify users for its bank customers, Trulioo Chief Product Officer Michael Ramsbacker told BAN.
Machine learning is utilized by the identity verification company’s platform for document auto-capture and AI-driven face detection.
Trulioo raised $394 million in series D round in June 2021 for a $1.75 billion valuation. AmEx Ventures, Citi Ventures and Blumberg Capital participated in the funding round.
Mastercard selected the cross-border payments company Remitly to provide customers with more options to make remittance payments.
Customers can use Mastercard Send, a payment solution by Mastercard, to add their debit card as a payment option on the Remitly app, and receivers of the payment can access their money through multiple channels including mobile wallets, direct deposit or cash pickups, an Oct. 19 Mastercard release stated.
Last October, Remitly teamed with Visa to provide real-time payment options for Canadian customers to send payments to 100 countries using Visa Direct.
Wealthtech giant Envestnet is teaming up with four fintechs:
Envestnet Data & Analytics will provide secure account linking, open banking and multichannel payment rails to provide more financial wealth management tools to customers, according to an Oct. 24 Envestnet release. The wealthtech company will also provide the fintechs with financial datasets to help them provide better financial advice to their customers.
“Data has the power to harmonize and connect all parts of a person’s financial life so that their daily monetary decisions support their long-term goals,” Farouk Ferchichi, group president at Envestnet Data & Analytics, said in the release.
Visit Bank Automation News’ Transactions Database, which lists the technology selected or acquired by companies in the financial services industry, with a specific focus on technology that enhances automation.
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