The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Toyota Motor

Dec 02, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Dec. 2, 2013 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the JPMorgan Chase & Co. (NYSE: JPM-Free Report), Bank of America Corporation (NYSE: BAC-Free Report), Citigroup Inc. (NYSE: C-Free Report), Wells Fargo & Company (NYSE: WFC-Free Report) and Toyota Motor Corporation (NYSE: TM-Free Report).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

Will Banks Charge a Fee for Deposits?

If the Federal Reserve has its way, Americans might soon have to pay for keeping their cash with banks. With the overall economic recovery remaining sluggish and high unemployment rate, the Fed is mulling over a policy shift that might spur growth.

The policy change, if implemented, could lead banks to charge fees from their clients for deposits.

With the Fed contemplating tapering its monthly $85 billion bond-buying program, the major U.S. banks including JPMorgan Chase & Co. (NYSE: JPM-Free Report), Bank of America Corporation (NYSE: BAC-Free Report), Citigroup Inc. (NYSE: C-Free Report) and Wells Fargo & Company (NYSE: WFC-Free Report) believe that the regulator will have to find other avenues to stimulate economic growth. This might include further lowering of interest rates for banks for keeping money with the Fed.

At present, the benchmark interest rate for the banks for keeping the excess money overnight with the Fed is 0.25%. Reportedly, the banking regulator is thinking of lowering this rate to 0.00%. Currently, banks hold nearly $2.4 trillion of excess reserves with the Fed for earning a substantial risk-free return.

Currently, banks are breaking even for keeping deposits as they are required to pay a small premium to a government insurance program. If the Fed lowers the rate to 0.00%, then banks will have to pass on this extra charge to the clients, who keep deposits with them.

Moreover, this will discourage banks from keeping additional reserves with the Fed, which is what the regulator wants. It anticipates such a move will encourage banks to purchase securities from the market or provide more loans.

Additionally, investment managers will have to find other ways to utilize this money and earn revenues. One way is to invest in high yield risky assets. However, this might again lead to a whole lot of trouble for the overall economy.

Amid the speculations, the major concern is how clients would react to such a policy change. If there is a mass withdrawal of deposits, the primary purpose of the Fed to go ahead with the policy shift would fail. Further, this will lead to the collapse of the banking system as a whole.

In order to prevent such a scenario, the Fed is walking a tightrope. The regulator might set up a separate facility where banks can deposit a portion of the cash to generate a small but positive return. This way it will perhaps serve both the purposes.

Whether the Fed finally goes ahead with the tapering and implements a 0.00% interest rate on deposits remains to be seen. The reaction of the backs and their customers is a significant factor as the customers would not want to pay for keeping their hard earned money with banks.

Toyota Production Up 16%

Toyota Motor Corporation's (NYSE: TM-Free Report) total worldwide production increased 16.1% year over year to 913,973 units in Oct 2013. While production in Japan improved 10.1% to 368,341 units, production outside Japan surged 20.5% to 545,632.

This is the second consecutive month that Toyota delivered improved production both in and outside Japan. In fact, production outside Japan reached a record high. The production figure includes the production of passenger cars, trucks and buses by Toyota as well as its subsidiaries Hino Motors, Ltd. and Daihatsu Motor Co., Ltd.

Total sales in Japan increased 9.3% to 183,765 units, driven by a 33% surge in sales of Hino and an 11.8% increase in sales of Toyota. Sales in Japan increased for the second consecutive month, although the combined market share of Toyota, Hino and Daihatsu declined 3.2 percentage points to 43.6%.

Sales of Toyota minivehicles in Japan increased 11.1% year over year to 3,225 units in October. The market share of Toyota in Japan declined 1.6 percentage points to 31.9% including minivehicles and 2.4 percentage points to 49.7% excluding minivehicles.

Meanwhile, exports increased 6.6% year over year to 172,503 units, driven by a 127.6% surge in exports of Daihatsu to 783 vehicles, while Hino exports rose 1.8% to 7,881 units. Toyota exports increased 6.6% to 163,839 vehicles in October, driven by higher exports to North America, Latin America, Asia, Oceania and Africa.

Toyota's exports increased for the second consecutive month, while the combined exports increased for the third consecutive month.

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