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News Scan Jan 2016

Credit Card News, Economy News, Banking Industry News - Jan 2015
  • American National Bank increased its position in JPMorgan Chase & Co. (NYSE:JPM) by 3.4% during the fourth quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 81,885 shares of the financial services provider’s stock after buying an additional 2,668 shares during the period.
  • JPMorgan Chase & Co. makes up about 2.1% of American National Bank’s investment portfolio, making the stock its 11th largest position. American National Bank’s holdings in JPMorgan Chase & Co. were worth $5,406,000 at the end of the most recent reporting period.
  • A number of other hedge funds and other institutional investors also recently modified their holdings of JPM. Eagle Asset Management increased its position in shares of JPMorgan Chase & Co. by 184.7% in the third quarter.
  • As the old saying goes, the stock market has predicted nine of the last five recessions. In other words, sharply falling stock markets are crying wolf about half the time.
  • Dyke Messinger, who runs a small manufacturing company in Salisbury, N.C., thinks stock investors have been overreacting during this sell-off. "It is bizarre to me when we see what we believe is good core strength in the U.S. market," he says.
  • Messinger's market is the construction industry. His company, Power Curbers, manufactures machines that contractors use to build curbs and gutters for housing developments and commercial buildings.
  • Now, there are certainly exceptions to that rule. For example, if you pay an $89 annual fee on a credit card and you get $150 worth of value from it – in the form of cash back, free baggage checking, airport lounge access, companion tickets and other such perks – then by all means, keep the card with the annual fee. The math clearly works for you.
  • The truth, however, is the math doesn’t work for most people. After the first year when all the associated sign-up bonuses are in the rearview mirror, most people don’t get enough value from the perks associated with their credit card to justify paying an annual fee. Not to worry, though. There is a variety of credit cards out there for the annual fee-averse among us.
  • We took a look at some of the top cards on the market that don’t feature annual fees. While there are plenty of compelling cards that waive their annual fee for the first year and then charge one in subsequent years, we aren’t featuring those in this story. Here are cards that never have an annual fee – in the first year and beyond:
  • Average rates on new card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.
  • Two cards included in the weekly rate report advertised slightly higher rates this week. However, the changes were too small to affect the national average. As a result, the national average remained fixed at 15.12 percent. The changes were big enough, though, to lift the average APRs of several card categories.
  • The minimum APR on the Credit One Visa Platinum card rose from 17.9 percent to 18.15 percent. The card's maximum rate increased from 23.9 percent to 24.15 percent.
  • According to the latest Fed data, foreign central banks sold $12 billion in the first week of the year and another $34.5 billion in the week ending January 13. As a result, total foreign central bank holdings fell to just $2.962 trillion. Foreign holdings are now below the prior low in November when China was dumping U.S. Treasuries to try to stem crashes in both their yuan currency and stock markets.
  • The U.S. dollar strengthened by +6.2 percent over the last year against a basket of world currencies and +6 percent against the Chinese yuan currency. Most people assume a strong U.S. dollar means China’s manufacturing will be more competitive.
  • But that assumption fails to consider the fact that multi-national operating in China and their state-owned-enterprises have been borrowing in U.S. dollars to lock in interest rates that were about 4 percent cheaper than from China banks. China’s 6 percent devaluation means “dollar-loans” must be paid off with 6 percent more in Chinese yuan.
  • Illegal immigration is beyond belief," declared Donald Trump at the sixth Republican presidential primary debate on Thursday evening. He's got a plan to fix it, though the ramifications might not be all that great for the economy.
  • Tackling immigration has been among the billionaire businessman's top priorities in his presidential bid. He first made waves on the issue in his campaign announcement speech in June, calling Mexican immigrants criminals and rapists and pledging to build a wall on the southern border.
  • His plans have cost him a handful of business deals, but they might cost the United States much more.
  • The vast number of U.S. banks won't experience appreciable change in accounting from new rules on financial instruments issued by the Financial Accounting Standards Board, accounting professionals in the banking industry, a bank analyst at a rating agency, and standard-setting sources tell Bloomberg BNA.
  • The new FASB accounting standards update, issued Jan. 5, doesn't amend existing standards for recognizing and measuring loans and investments in debt securities.
  • Shift in FASB Thinking: However, major-player banks will welcome the advent of a notable change in generally accepted accounting principles that especially affects holdings in debt instruments measured under what is called “the fair value option.”
  • You may have read news reports about these thumbnail-sized metallic squares that now appear on the front of many credit cards. You might have also noticed that the credit card terminals at the checkout counter of your favorite retailer look a little different these days.
  • Even so, there's a good chance that you and your neighbor still don't have a chip card in your wallet yet. A CreditCards.com survey found that just 40 percent of credit cardholders had a chip card as of Oct. 1. That number has surely grown, but it’s still far below industry expectations.
  • That's probably going to change in 2016. Chances are your credit card issuer has plans to replace your old-school magnetic stripe credit card with a chip card in the next few months. If you want to know when, call the 800 number on the back of your card and ask your issuer.
  • U.S. payrolls surged in December and the job count for the prior two months was revised sharply higher, showing the economy on solid ground despite a troubling international backdrop.
  • Nonfarm payrolls increased by 292,000 last month, the Labor Department said on Friday, as hiring got a boost from unseasonably warm weather. The unemployment rate held steady at a 7-1/2-year low of 5 percent even as more people entered the labor force, a sign of confidence in the job market.
  • The robust employment data helped soothe fears about the economy's health, and suggested recent weakness would largely be contained to the manufacturing and export-oriented sectors, which have been hit by a strong dollar and anemic global demand. Efforts by businesses to whittle down an inventory glut and spending cuts by energy companies have also inflicted pain.
  • Auto makers on Tuesday reported strong U.S. sales in December, indicating that 2015 would smash records, and most forecasters said the new year will be even better.
  • For full year 2015, General Motors Co said industry sales will top the previous record of 17.35 million vehicles in 2000 as low gasoline prices, easy credit and moderate economic growth boosted the industry.
  • GM said December sales will end at 17.8 million vehicles on a seasonally adjusted annualized basis. In a Thomson Reuters poll, 38 economists and analysts forecast December sales at 18.1 million vehicles.
  • Earnings season is right around the corner for big bank stocks, and Deutsche Bank analyst Matt O’Connor recently outlined four key themes that bank investors should be watching this earnings season:
  • 1. Bank of America Corp BAC, Citizens Financial Group Inc CFG 0.47%, JPMorgan Chase & Co. JPM 0.17% and PNC Financial Services Group Inc PNC 0.14% should benefit the most in Q1 from rising short rates.
  • 2. The banking industry will likely see M&A activity throughout 2016.
  • The first week of 2016 has brought sinking temperatures and stocks–and now weaker estimates of economic growth for the fourth quarter.
  • Before Monday, the U.S. economy appeared to have ended 2015 on solid, though unspectacular, footing. Many economists were estimating that the nation’s gross domestic product–or the sum of all goods and services produced–grew at an annual pace of roughly 2% in October through December. That would match the third quarter’s pace and fall roughly in line with average growth throughout the current expansion.
  • But those estimates are falling, due to weak readings Monday morning on the nation’s manufacturing and construction activity, two key drivers of economic growth.