Finance

Bank stocks pop after Fed releases ‘easier’ 2025 stress test

Published

2 months ago

February 6, 2025

Jane Fraser, CEO of Citi, speaks during the Milken Institute Global Conference in Beverly Hills, California, on May 1, 2023.

Patrick T. Fallon | AFP | Getty Images

Bank shares rose Thursday after the Federal Reserve released parameters for its annual industry stress test showing smaller hypothetical shocks to the U.S. economy than in previous years.

While still challenging, with U.S. joblessness jumping to 10% and a 33% drop in home prices, the 2025 exam has smaller spikes in unemployment and smaller declines in stock and real estate values than previous versions, Jason Goldberg of Barclays said Thursday in a note titled “2025 Stress Test: Scenarios Easier than Past Two Years.”

The Fed will soon take steps to “reduce the volatility of stress test results and begin to improve model transparency” in the 2025 exam, the regulator said in a statement released Wednesday after the close of regular trading.

Shares of Citigroup jumped 2.9% in midday trading, while Goldman Sachs, Morgan Stanley and Bank of America each rose at least 1.5%. Big banks gained more than smaller lenders, with the KBW Bank Index rising 1.2% compared with the 0.9% gain of the S&P Regional Banking ETF.

The stress test changes bolster the case made by Wall Street analysts that big U.S. banks will face a friendlier regulatory regime under the Trump administration. Since the aftermath of the 2008 financial crisis, the biggest U.S. banks have had to undergo annual exams that test their ability to withstand a severe recession while continuing to lend to consumers and businesses.

Banks have complained for years that the annual stress tests were opaque and unfairly administered, and industry trade groups sued the Fed in December over the exam.

By making the latest iteration of the test both less challenging and more predictable, banks could hold smaller capital cushions later this year, according to Bank of America analyst Ebrahim Poonawala.

“The 2025 stress test scenario, broadly better vs last year, increases our confidence that banks should begin to see relief on regulatory capital requirements, given our expectations for a shift to a balanced, transparent, and more predictable regulatory regime,” Poonawala wrote Thursday in a note.

Finance

Conservative cable channel Newsmax shares plunge more than 70% after a dizzying 2-day surge

Published

3 hours ago

April 2, 2025

Business Finance News

A Newsmax booth broadcasts as attendees try out the guns on display at the National Rifle Association (NRA) annual convention in Houston, Texas, U.S. May 29, 2022.

Callaghan O’hare | Reuters

Shares of conservative news channel Newsmax plunged more than 70% on Wednesday as its meteoric rise as a new public company proved to be short-lived.

The stock tumbled a whopping 72% in afternoon trading, following a 2,230% surge in Newsmax’s first two days of trading after debuting on the New York Stock Exchange. At one point, the rally gave the company a market capitalization of nearly $30 billion — surpassing the market cap of legacy media companies like Warner Bros. Discovery and Fox Corp.

Newsmax was listed on the NYSE via a so-called Regulation A offering, instead of a traditional IPO. Such an offering allows small companies to raise capital without undergoing the full SEC registration process. The primary focus is to sell to retail investors, in this case It was sold to approximately 30,000 retail investors.

The public offering indeed garnered the attention from retail traders, some of whom touted the stock as the “New GME” in online chatrooms. GME refers to the meme stock GameStop, which made Wall Street history in 2021 by its speculative trading boom.

Newsmax has a small “float,” or shares available for trading. Less than 6% of Newsmax shares, or 7.5 million shares out of a total of 128 million fully diluted shares, are available for public trading.

The conservative TV news outlet has seen its ratings rise with the election of President Donald Trump and other prominent Republicans — although it still falls behind the dominant Fox News. Overall, Newsmax ranks in the top 20 among cable network average viewership in both prime time and daytime, Nielsen said.