DEEP DIVE



a sign in front of a building: D.A. Davidson senior analyst David Konrad recommends buying shares of Morgan Stanley and J.P. Morgan Chase because of their varied business mixes, strong capital and an expected decline in credit costs.


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D.A. Davidson senior analyst David Konrad recommends buying shares of Morgan Stanley and J.P. Morgan Chase because of their varied business mixes, strong capital and an expected decline in credit costs.

(Updates article with comments from David Konrad of D.A. Davidson about Morgan Stanley’s deal to acquire Eaton Vance and loan-loss provisioning activity.)

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Bank stocks typically drop during recessions. This time around, with the big players well-capitalized, largely free from the worst of loan loss set-asides and benefitting from a rebounding economy, investors may be looking at an opportunity staring them in the face.

And the biggest banks have clear advantages: fees from investment banking and asset management. (Below are tables showing expected and historical provisions for loan losses, non-interest income, earnings per share and analysts’ ratings for the largest dozen U.S. banks.)

The hot space — asset management

Morgan Stanley (MS) has been making moves to become a premier asset manager. On Thursday, the firm said it would acquire Eaton Vance Corp. (EV) for $7 billion in cash and stock. Eaton Vance had $507 billion in assents under management as of July 31, and Morgan Stanley said the merger would bring assets under management for its Morgan Stanley Investment Management unit to $1.2 trillion.

Just on Oct. 2, Morgan Stanley completed its acquisition of discount broker E-Trade Financial. At that time, the bank said the firm’s total assets under management (AUM) had risen to $3.3 trillion. That makes for a pro forma total of $3.8 trillion in AUM, assuming the Eaton Vance acquisition is completed following regulatory approval.

A Twitter posting from Stephanie Link of HighTower Advisors underlined how hot the asset management business is:

By Carolina Mandl

SAO PAULO, Oct 5 (Reuters)Private equity firms Warburg Pincus WP.UL and Gavea Investimentos are planning an initial public offering by Grupo GPS, a Brazilian facilities services provider in which they are key stakeholders, two sources familiar with the matter said.

Part of the proceeds of the offering, which are expected to reach 3 billion reais ($537.44 million), will go to the two private equity firms, with the rest going to the company for possible investment purposes, one of the sources added.

The company has hired investment banking units of Goldman Sachs GS.N, Itau Unibanco ITUB4.SA, BTG Pactual BPAC11.SA, Citigroup Inc C.N, Morgan Stanley MS.N and Bank of America Corp BAC.N to manage the IPO, according to the sources.

Founded in 1962, GPS has more than 86,000 employees and 2,400 clients, according to its website. It provides services such as cleaning, security, logistics and catering for companies.

If successfully listed, GPS will be the first facilities company listed on Brazil’s stock exchange, B3 SA.

Warburg Pincus and Gavea acquired minority stakes in GPS in 2015 and 2017, respectively.

The company, which has bought up a series of smaller rivals, consolidating an extremely fragmented sector, posted net income of 192 million reais last year.

GPS would be the third Brazilian company in which Warburg Pincus has a stake to go public this year, following pet store chain Petz PETZ3.SA and logistics company Sequoia Solucoes Logisticas SEQL3.SA, whose IPO is expected to price later on Monday.

($1 = 5.5820 reais)

(Reporting by Carolina Mandl in Sao Paulo Editing by Matthew Lewis)

(([email protected]; +55 11 5644 7703; +55 11 97116-3806;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



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Norwegian Cruise Line (NYSE:NCLH) and its cruise brethren are among the most repudiated names against the novel coronavirus backdrop, but there are signs the stormiest seas could be behind Norwegian Cruise Line stock.



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An 8% gain for the week ending Sept. 30 is a starting point, but there’s plenty more work to be done. Although NCLH stock more than doubled off its March lows, it needs to more than triple to reclaim its pre-pandemic highs.

In the essence of full disclosure, I’m not the biggest fan of cruises or the related equities, but my bias doesn’t belong here. What’s more important is that Wall Street is warming to this downtrodden industry.

Some analysts use the phrase “inflection point” regarding the cruise industry, implying that while the road ahead won’t be bump-free for Norwegian and friends, operators are getting further and further removed from the March/April brink and are positioned to benefit as consumer spending and travel patterns normalize.

NCLH Stock Has Near-Term Catalysts

On the final trading day of September, Norwegian Cruise Line stock jumped 3.3% on above-average volume after reports surfaced that the White House stood in the way of the Centers for Disease Control and Prevention extending in a big way a no-sail order keeping cruise ships docked.

That directive expired on Sept. 30 and CDC Director Robert Redfield reportedly wanted to extend it to February 2021, but the Trump Administration apparently said “No, take an extension to Oct. 31 and like it.” Extending the no-sail order to the end of October isn’t material to Norwegian and its rivals because the operators already agreed to not sail from domestic ports next month.

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“We believe cruise executives will be meeting with White House officials

LOS ANGELES, Sept. 29, 2020 /PRNewswire/ — The red flag fire warnings have sparked fierce fires in Northern California, forcing local authorities to issue mandatory evacuation orders for residents. Mercury Insurance is ready to assist homeowners and renters insurance policyholders who have had to leave their homes in response to the Glass Fire, another mandatory fire-related evacuation order, or whose property has suffered fire damage.

Mercury representatives are available to help address covered claims while following social distancing procedures. Representatives are also available to arrange temporary housing and provide assistance with living expenses if policyholders are forced to leave their homes in response to mandatory evacuation orders. Residents evacuating their homes should make sure they have the necessary supplies to keep themselves and their family safe during the evacuation.

“Follow mandatory evacuation orders to get yourself and family to safety, immediately,” said Christopher O’Rourke, Mercury’s vice president of property claims. “It’s important to follow these orders and you can trust that Mercury has you covered. Policyholders who were forced to leave their homes due to mandatory evacuation orders should contact their agents or call the Mercury Claims Hotline at (800) 503-3724 for help. They should keep their receipts for any additional living expenses as a Mercury homeowners or renters insurance policy can help them recoup this money.

“Mercury also recommends that policyholders report losses as soon as possible, so we can begin to assist with the rebuilding process.”

Wildfire home hardening, firescaping and preparedness tips on how to mitigate damage, as well as frequently asked questions are readily available in Mercury’s Resource Center.

If a claim needs to be filed, O’Rourke advises policyholders follow a few simple procedures to help speed up the process.

When filing a claim

  • Contact Mercury immediately to report your loss.
  • Be