SCHW - The Charles Schwab Corporation

NYSE - NYSE Delayed Price. Currency in USD
49.19
+0.24 (+0.49%)
At close: 4:01PM EST
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Previous Close48.95
Open48.81
Bid49.21 x 1000
Ask49.10 x 3100
Day's Range48.67 - 49.24
52 Week Range34.58 - 50.97
Volume7230530
Avg. Volume10,080,725
Market Cap63B
Beta (3Y Monthly)1.41
PE Ratio (TTM)18.15
EPS (TTM)2.71
Earnings DateJan. 14, 2020 - Jan. 20, 2020
Forward Dividend & Yield0.68 (1.39%)
Ex-Dividend Date2019-11-07
1y Target Est50.62
  • Schwab buys Ameritrade for $26 bln
    Reuters Videos

    Schwab buys Ameritrade for $26 bln

    A $26 billion deal that could shake up the brokerage sector: Charles Schwab is buying its smaller rival TD Ameritrade, creating a behemoth. The combined company will boast $5 trillion in assets, controlling up to 70% of investment account assets. Analysts say the deal will likely be scrutinized by regulators but still get the nod. Startups like Robinhood have disrupted the discount brokerage industry, gobbling up market share. As a result, Schwab became the first big brokerage to eliminate trading fees last year, and Fidelity, Ameritrade and E-Trade Financial have since followed suit. Through the deal, analysts say TD Ameritrade clients could gain access to Schwab's services like wealth and asset management and banking, while Schwab customers could see improvements in trade technology and educational investing tools. Schwab is forking over a 26% premium based on Ameritrade's closing price the day before CNBC reported on the takeover talks last week. Schwab and Ameritrade say the deal will add up to 15% in earnings per share in the third year after the deal closes. Investors showed their approval, sending shares of both brokers up in early trading Monday. The companies expect to close the deal in the second half of next year.

  • How a Chat With Chuck Schwab Inspired an S&P 500 Call for 3,950
    Bloomberg

    How a Chat With Chuck Schwab Inspired an S&P 500 Call for 3,950

    (Bloomberg) -- In a recent surprise encounter, BTIG’s Julian Emanuel met Charles Schwab. It took just 20 minutes of chatting for the finance legend to spur a bold call from the Wall Street strategist: A 25% gain for stocks in 2020.It’s not his base case, but BTIG’s chief equity and derivatives strategist says it’s possible that the S&P 500 Index surges to 3,950 next year, driven in part by the fee war that’s swept the asset management industry. It was just after Charles Schwab Corp. cut commissions to zero when Emanuel and the brokerage’s founder met.“His enthusiasm over the whole idea that this was another step in the democratization of markets for the public, it was so profound and it really hit me,” Emanuel said in an interview. “To me, his belief in the benefits of markets and investing seem to be stronger than ever. That really focused our attention on the potential.”The logic goes like this. For much of the past decade’s bull market, investors have remained under-invested, preferring the safety of cash over the risk of equities. But history shows that typically near the end of cycles, “the public investor falls in love” with risk assets, often “resulting in a parabolic move higher,” Emanuel wrote to clients this week. To him, zero-fee trading could be the spark that ignites the rush even after the 25% gain so far this year.Charles Schwab said it would cut commissions on trades for stocks, options, and exchange-traded funds to zero in October, sending shares of its competitors spiraling. TD Ameritrade Holding Corp. did too the same day (although Schwab later agreed to buy the broker), and E*Trade Financial Corp. made the move the day after.In the month that followed, clients opened 142,000 new brokerage accounts at Schwab, a 31% jump from the prior period.“If you’re going to have more account openings, those people aren’t buying bond funds,” Emanuel said by phone. “People are starting to pay incrementally more attention. The move to zero fee online trading is one of those things that makes is so incredibly easy.”His discussion with Chuck Schwab reminded Emanuel of rule changes in the past that weren’t expected to have outsize effects on stocks, but did. Take the turn of the century, when a move by the U.S. Securities and Exchange Commission that ordered stock prices be reported in decimals instead of fractions led to higher trading volumes. Or in 2007, when the regulator removed the so-called Uptick Rule, introducing new market dynamics, he said.To Ryan Nauman, a market strategist at Informa Financial Intelligence’s Zephyr, the connection makes sense. But a 25% gain from the S&P 500’s current levels seems a bit lofty considering risks including U.S.-China trade war, a presidential election and geopolitical tensions abroad will likely persist.“If there is less cost, trading should pick up and you’d assume trading to the upside,” Nauman said by phone. “That definitely could help drive markets. I’m not quite that optimistic though. There’s just too many headlines out there.”But Kelly Bogdanova, vice president and portfolio analyst for RBC Wealth Management’s Portfolio Advisory Group, says investor mindsets have changed, and memories of the financial crisis are still fresh. That means the public could grow more bullish in surveys and the like, yet not cut loose on savings and deploy cash into the market.“When the crisis occurred and then the country started to come out of it, a lot of households changed their behavior, paid down debt and then accumulated savings,” Bogdanova said. “So while there’s a lot of savings on the sidelines, we may not be at the point where those savings gets freed up to flow into the market heavily because people are still in the mindset of being cautious.”To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.netTo contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Rita NazarethFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bank of America Expands Free Trading to Legions of Merrill Edge Customers
    Bloomberg

    Bank of America Expands Free Trading to Legions of Merrill Edge Customers

    (Bloomberg) -- Bank of America Corp. is expanding commission-free trading -- again.The lender said it will give unlimited free stock trades to all customers on its Merrill Edge Self-Directed platform, seven weeks after handing that perk to members of its Preferred Rewards loyalty program. The move, announced in a statement Monday, follows Charles Schwab Corp.’s decision to eliminate charges and acquire TD Ameritrade Holding Corp. for about $26 billion. It all underscores fierce competition in the discount-brokerage business.“Everyone is aggressive right now, because the question is: How do you prove value, how do you attract clients?” Aron Levine, Bank of America’s head of consumer banking and investments, said in a phone interview. “We want to make sure that all clients who are interested in our platform have access to it in a comparable way to the rest of the industry.”As other firms face pressure to bulk up through mergers, Bank of America will focus on boosting activity among its existing clients, Levine said. The company has about 66 million consumer and small business clients.“We look at a client holistically,” Levine said. That means the lender can make money on customers’ broader financial activities, including banking, credit cards and mortgages, rather than focusing purely on brokerage revenue. Any lost revenue from the latest move will be marginal, given 87% of trades were already commission-free, he said.To contact the reporter on this story: Lananh Nguyen in New York at lnguyen35@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Traders Are Already Bracing for a Wild Week Ahead
    Bloomberg

    Traders Are Already Bracing for a Wild Week Ahead

    (Bloomberg) -- Investors face a crush of events next week that could sweep away the biggest hurdles to a full-blown race into riskier assets, if things line up just right.Over the second half of the week, possible catalysts for a Treasury market sell-off will arrive in close succession: Policy decisions from the U.S. and euro-zone central banks are expected to offer no fresh hints of easing in the cards, and the U.K. election could finally pave a more resolute course for an exit from the European Union.Treasuries were already on the ropes Friday, thanks to a U.S. payrolls report that surpassed analysts’ expectations. That pushed the S&P 500 to the brink of a record high, drove market pricing for a full Federal Reserve rate cut to the end of 2020, and thrust the 10-year yield toward the upper end of its recent range, at around 1.84%.The events ahead will determine the macroeconomic backdrop heading into the new year, but the question for investors is how much of the real action next week is already baked in. For Kathy Jones at Charles Schwab & Co., the more pressing issue remains U.S.-China trade talks. The big catalyst for risk appetite and significantly higher yields in one of the last actively traded weeks of the year would be a credible signal that the U.S. will forgo the additional tariffs it’s threatening to impose on Chinese goods on Dec. 15, she said.“We do have a confluence of things next week and there’s a good likelihood that yields will rise -- but will they just rip higher?” said Jones, chief fixed-income strategist at Charles Schwab. “You’d need some really surprisingly good news on the trade war.”Global growth headwinds from trade friction have helped pull benchmark U.S. 10-year yields down about 80 basis points in 2019, driving Treasuries to a 7.3% return this year through Dec. 5. It’s shaping up to be the best annual performance since 2011.Some SwayAnd in Jones’s view, economic numbers could still have sway.Treasuries could take a hit ahead of the week’s high-profile events if the consumer price index reading due Dec. 11, the same day as the Fed decision, shows an annual increase faster than the expected 2%. That could unsettle the widely held view that inflation pressures are nowhere near strong enough to fit the Fed’s stated criteria for a rate hike. But there’s also potential for yields to fall should the Dec. 13 retail sales figures counter the market’s conviction that the U.S. consumer is holding up.While the data may fall short of alarming the Fed’s inflation hawks, it’s clear from Chairman Jerome Powell’s recent statements that his view of the economy is biased toward optimism -- as a glass “more than half full.”There hasn’t been much in comments from Fed speakers to suggest they’ve downgraded projections for interest rates -- which will be updated Wednesday -- since September. At the time, the “dot plot” of policy makers’ views suggested that the majority see the next move as a hike rather than a cut, and most expect rates to remain on hold or move higher in 2020.Whichever way traders see the risks tilting through year-end, the coming week could be one of the last good opportunities of the decade to jump into the fray, before clearing out for the holidays.What to WatchMuch of the potentially market-moving action in the week ahead is offshore, with the European Central Bank’s decision and the U.K. election. But markets will also be looking for signs of movement in trade talks ahead of the Dec. 15 U.S. tariff deadlineThe FOMC’s meeting tops the domestic agenda:Dec. 11: FOMC rate decision and Powell press conferenceDec. 13: New York Fed’s John Williams discusses topics in monetary policyHere’s the economic calendar:Dec. 10: NFIB small business optimism; nonfarm productivity; unit labor costsDec. 11: MBA mortgage applications; consumer price index; real average earnings; monthly budget statementDec. 12: Producer price index; jobless claims; Bloomberg consumer comfort; household change in net worthDec. 13: Import/export prices; retail sales; Bloomberg U.S. economic survey; business inventoriesAnd the auction schedule:Dec. 9: $42 billion of 13-week bills; $36 billion of 26-week bills; $38 billion 3-year notesDec. 10: $24 billion of 10-year notesDec. 12: 4-, 8-week bills; 30-year bond re-openingTo contact the reporter on this story: Emily Barrett in New York at ebarrett25@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Mark Tannenbaum, Nick BakerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Business Wire

    Schwab Adds Industry Veteran Tom Bradley to Advisor Services Leadership Team

    Charles Schwab announced that industry veteran Tom Bradley will join its Advisor Services business.

  • Broker wars go crypto as Thiel-backed startup BlockFi offers free trades
    Yahoo Finance

    Broker wars go crypto as Thiel-backed startup BlockFi offers free trades

    New Jersey-based BlockFi is extending their services to allow customers to trade their cryptocurrencies with zero fees attached.

  • Business Wire

    Schwab Report: Self-Directed 401(k) Balances Hold Steady; Millennials Allocate More to ETFs and Cash Than Gen X, Boomers

    According to Charles Schwab’s SDBA Indicators ReportTM, an industry-leading benchmark on retirement plan participant investment activity within self-directed brokerage accounts , Millennials allocated a larger percentage of their portfolios to ETFs and cash than did other generations during the third quarter of 2019, while mutual funds remained the largest holding in the accounts of all generations ...

  • The Man You Brought Tech and Humor to the Brokerage Business
    Bloomberg

    The Man You Brought Tech and Humor to the Brokerage Business

    (Bloomberg Opinion) -- Talk about timing: Masters in Business sat down with Joe Ricketts, founder of TD Ameritrade Holding Corp., on Nov. 12 and 10 days later Charles Schwab Corp. offered to buy TD for $26 billion (Ricketts still owns more than 8% of the company).TD Ameritrade has its roots in First Omaha Securities, a Midwest retail brokerage firm that Ricketts started in 1975. First Omaha introduced a series of technological firsts that helped drive its rise: It was the first to advertise a toll-free telephone service for investors to call and place buy and sell orders, and it was the first to provide price quotes and accept orders via touch-tone phone. Not so novel today, but big innovations more than 30 years ago. In 1995, the company became the first brokerage firm to handle online trading over the internet.In an attempt to cut through the clutter, Ricketts tried to use humor to reach potential clients. Ameritrade became famous for its slack stick dot-com-era TV advertising. The best known was the “Let’s Light This Candle” ad, featuring Stuart the office boy as the main character. It became a viral meme before such things even existed. First Omaha bought lots of other regional brokers, eventually going public in 1997 and later merging with TD Waterhouse in 2006. Now it's TD that's being bought.Ricketts is the author of "The Harder You Work, the Luckier You Get: An Entrepreneur’s Memoir." His family trust has owned the Chicago Cubs since 2009; the team won the World Series in 2016, its first championship in 108 years. His favorite books are here; a transcript of our conversation can found here.You can stream/download the full conversation, including the podcast extras on Apple iTunes, Overcast, Spotify, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.Next week, we speak with Ben Horowitz, founding partner of famed venture capital firm Andreessen Horowitz, and author of "What You Do Is Who You Are: How to Create Your Business Culture."To contact the author of this story: Barry Ritholtz at britholtz3@bloomberg.netTo contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • The Zacks Analyst Blog Highlights: Merck, Lilly, Charter, Alibaba and Charles Schwab
    Zacks

    The Zacks Analyst Blog Highlights: Merck, Lilly, Charter, Alibaba and Charles Schwab

    The Zacks Analyst Blog Highlights: Merck, Lilly, Charter, Alibaba and Charles Schwab

  • Baystreet

    TSX Dips on Lower GDP Growth

    Canada's main stock index fell on Friday as the economy expanded at a slower pace in the third quarter, ...

  • Moody's Affirms TD Bank's Ratings, Outlook Remains Stable
    Zacks

    Moody's Affirms TD Bank's Ratings, Outlook Remains Stable

    TD Bank's (TD) minimal exposure to risks and TD Ameritrade's recent deal impress Moody's.

  • Top Research Reports for Merck, Eli Lilly & Charter Communications
    Zacks

    Top Research Reports for Merck, Eli Lilly & Charter Communications

    Top Research Reports for Merck, Eli Lilly & Charter Communications

  • Will the TD Ameritrade Buyout Send TD Bank (TSX:TD) Stock Higher?
    The Motley Fool

    Will the TD Ameritrade Buyout Send TD Bank (TSX:TD) Stock Higher?

    With TD Bank's (TSX:TD)(NYSE:TD) biggest subsidiary about to be bought out, is its stock a buy?

  • Moody's Affirms Schwab, TD Ameritrade Ratings, Outlook Stable
    Zacks

    Moody's Affirms Schwab, TD Ameritrade Ratings, Outlook Stable

    Moody's affirms the ratings of Schwab (SCHW) and TD Ameritrade (AMTD), following the announcement of the all-stock deal between the two.

  • Schwab's Buyout of TD Ameritrade to Shake Up Online Brokerage
    Zacks

    Schwab's Buyout of TD Ameritrade to Shake Up Online Brokerage

    Schwab's (SCHW) deal to buy TD Ameritrade (AMTD) is likely to be accretive to earnings and lead to cost synergies. It is expected to pave way for more consolidations in the online brokerage space.

  • TD Ameritrade deal was 'executed brilliantly' by Charles Schwab: Expert
    Yahoo Finance

    TD Ameritrade deal was 'executed brilliantly' by Charles Schwab: Expert

    Charles Schwab announced on Monday it will buy rival TD Ameritrade in a deal valued at roughly $26 billion.  

  • Developed Stocks Hit a Record as Merger Mania Tops $70 Billion
    Bloomberg

    Developed Stocks Hit a Record as Merger Mania Tops $70 Billion

    (Bloomberg) -- A buyout frenzy is taking hold of boardrooms from Tokyo to San Francisco, and it’s adding fuel to a record-breaking rally across the world’s major stock markets.More than $70 billion of deals has already been announced this week, with Charles Schwab Corp.’s $26 billion buyout of discount brokerage TD Ameritrade Holding Corp. leading the pack. Luxury goods giant LVMH, Swiss drugmaker Novartis AG and Japanese conglomerate Mitsubishi Corp. are among a slew of companies which have also announced multibillion-dollar transactions.For investors, the sudden burst of activity is being seen as a vote of confidence in the outlook as recession fears ebb and the U.S. and China edge toward a trade deal. The S&P 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index all closed Monday at records, and the MSCI World Index of developed-market stocks was trading at an all-time high on Tuesday.“The recent M&A explosion reflects an undeniable economic optimism,” said Brock Silvers, managing director at Adamas Asset Management in Hong Kong. “The U.S. enjoys both low inflation and unemployment, while the Fed looks dovish, and trade talks are rumored to be nearing an initial success. Investment capital is plentiful and cheap.”That cheap cost of funding is the common denominator across the deals, which have motives ranging from industry consolidation to diversifying into new markets. Policy makers across the world have been cutting interest rates in a bid to shore up economic growth, and the Federal Reserve and European Central Bank have even been forced to expand their balance sheets.Given the low cost of borrowing, it’s surprising there hasn’t been even more merger and acquisition activity, according to Rhett Kessler, senior fund manager at Sydney-based Pengana Capital Group Ltd., which oversees about A$3 billion ($2 billion).For all the optimism spurred by the flurry of dealmaking, there are reasons for caution. Merger and acquisition activity typically tends to peak along with the business cycle, meaning some market participants will read this as a late-cycle signal. Meanwhile deals like Schwab’s purchase of TD Ameritrade are symptoms of structural industry changes, rather than the health of the economy.Investor exuberance beyond the U.S. appears more measured. While the Stoxx Europe 600 is at about the highest since May 2015 and Japan’s Topix Index touched the strongest level this year on Tuesday, both lag the performance of the S&P 500 in 2019.There were at least 10 deal announcements worth $1 billion or more on Monday, according to data compiled by Bloomberg. Here’s a rundown of the key details:Industry ConsolidationCharles Schwab, the San Francisco-based brokerage, announced it would acquire TD Ameritrade, amid a collapse in investing costs as providers embrace $0 feesCanada’s Kirkland Lake Gold Ltd. announced a C$4.9 billion ($3.7 billion) all-share agreement to buy Detour Gold Corp.EBay Inc. is selling its ticket marketplace StubHub to European rival Viagogo for $4.05 billion in cashBranching OutLVMH, the luxury giant that already sells everything from Louis Vuitton bags to Dom Perignon champagne, is adding the 182-year-old U.S. jeweler Tiffany & Co., known for its robin’s egg blue boxesNovartis AG agreed to buy Medicines Co. and its promising heart drug for $9.7 billion, the latest move in the Swiss drugmaker’s push to amass novel treatments for complex conditionsCanadian convenience-store giant Alimentation Couche-Tard Inc. offered A$8.6 billion ($5.8 billion) for fuel retailer Caltex Australia Ltd., sweetening its bid for about 2,000 sites as it seeks to broaden a global expansionJapan Goes AbroadAsahi Kasei is buying Veloxis Pharmaceuticals for $1.3 billion, the latest of a series of deals by Japanese drugmakersMitsubishi Corp. and Chubu Electric Power Co. are expected to buy Eneco of the Netherlands after being selected as the preferred bidders. The deal may help Japan shift toward renewables\--With assistance from Michael Hytha, Fion Li and Samuel Potter.To contact the reporters on this story: Christopher Anstey in Tokyo at canstey@bloomberg.net;Angus Whitley in Sydney at awhitley1@bloomberg.net;Jinshan Hong in Hong Kong at jhong214@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Tom Redmond, Michael PattersonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Investing.com

    Top 5 Things to Know in the Market on Tuesday

    Investing.com -- More happy talk from China on trade, while Fed Chairman Jerome Powell sees the economy's glass as "more than half full" (so no more rate cuts for now). Elsewhere, eBay keeps up the flurry of M&A; activity and the UN takes a swipe at countries for failing to live up to their Paris Accord pledges. Here's what you need to know in financial markets on Tuesday, 26th November.

  • In a $0 Fee World, Charles Schwab Muscles Its Way to the Top
    Bloomberg

    In a $0 Fee World, Charles Schwab Muscles Its Way to the Top

    (Bloomberg) -- For decades, Charles Schwab Corp. quietly plotted to unleash its ultimate weapon against rivals: $0 fees.Schwab considered eliminating charges in the 1990s after the advent of online trading, and again in the 2000s during the financial crisis, according to a person with knowledge of the matter. Each time, it dismissed the idea as too risky -- a danger to its own bottom line.But with investing costs collapsing across Wall Street, the San Francisco-based firm finally took the leap in October -- and, in a matter of weeks, it drove a major rival into its arms.On Monday, days after reports of a possible acquisition first surfaced, Schwab formally announced that it would acquire TD Ameritrade Holding Corp. in an all-stock deal valued at roughly $26 billion.The deal caps a year of off-again-on-again negotiations and cements Schwab’s position in the industry it pioneered a half-century ago.For TD Ameritrade, one of Schwab’s keenest rivals, the tie-up is an acknowledgment of a stark, new reality: One of finance’s most basic businesses, stock trading, has become so mundane that brokers are giving it away for free.Schwab played its hand deftly. First, it sent shockwaves through its industry -- and sent TD Ameritrade stock into a tailspin -- by abruptly announcing last month that it would allow customers to trade stocks and exchange-traded funds for free. Then, it reentered talks that culminated in Monday’s announcement.Chief Executive Officer Walt Bettinger was blunt in early November, telling Schwab clients that discount brokers were headed for a shakeout. But as recently as last week, the company’s Chief Financial Officer, Peter Crawford, was holding his cards close in discussions with industry executives.“What a poker player,” Matt Witkos, head of global distribution at Eaton Vance Corp. in Boston, said of Crawford. “It was pretty shocking.”Falling CostsTradecraft aside, Schwab and TD Ameritrade are both responding to the tectonic shifts in their business. Price competition extends beyond commissions to investment products, too: Fidelity Investments is now charging nothing at all for a handful of its funds.Pressure has been intensifying: In the 1970s, Schwab charged about $70 for a stock trade. By the 1990s, the price had dropped to as little as $30, and in the mid-2000s it cost about $13. After Schwab’s move in October, it was free.The race to zero, after so many years of resistance, partly reflects a generational shift. While many baby boomers are accustomed to paying fees, younger people have come to expect free trading from a new crop of competitors such as Robinhood Financial.Schwab’s TD Ameritrade deal, expected to close in the second half of 2020, would create a formidable giant with $5 trillion in assets. The company would be so large that some analysts have said the deal might draw antitrust scrutiny.Bettinger, the CEO, flicked away those concerns on a call with analysts Monday.“We have numerous competitors, many of which are far larger than us today and far larger than a combined organization,” he said, naming Fidelity and Vanguard Group among the bigger challengers. “They’re going to continue to come right after us, as they are now in all aspects of the business.”Toronto-Dominion Bank, which owns 43% of TD Ameritrade, initially reached out to Schwab, people familiar with the matter said.Schwab’s eliminating of fees prompted TD Ameritrade and other rivals to follow suit. In the wake of the move, TD Bank again reached out to Schwab to restart the discussions, according to one of the people familiar with the matter.Representatives for TD Bank declined to comment.The marriage of Schwab and its smaller Midwest rival left independent advisers and competitor firms scrambling to decode how the combined company will transform the brokerage business, which has already undergone considerable upheaval in recent years.Schwab worked its way up the food chain by leaning into the “discount” part of the discount brokerage business, fueling more than a decade of expansion.The firm got its start in the 1970s by undercutting Wall Street firms that would charge hundreds of dollars per order. It thrived on comparatively low-cost trading into the 1990s, moving online to compete with upstarts including E*Trade Financial Corp.But Schwab lost its way in the early 2000s, charging more than competitors for trading and juggling disparate business lines. To reverse course, founder Charles Schwab returned to the helm and refocused on one thing: cheap fees. That decision to reconnect to the discount ethos helped it grow to its dominant position today.“The logic of Schwab has been -- will always be -- to reduce commissions,” said Robert Burgelman, professor of management at the Stanford Graduate School of Business, who’s followed Schwab for two decades and written case studies on the company.Schwab was able to kneecap its competitors last month with zero fees in part because it relies less on trading for income.Its other business lines include adviser services and its own low-cost investment products. And the firm earns most of its revenue from reinvesting customer cash through its bank division. When falling interest rates threatened that income stream, Schwab announced in September that it was cutting 3% of its staff or about 600 jobs.Monday’s announced deal puts additional heat on E*Trade, which was long thought to be a potential acquisition target for TD Ameritrade. After falling 9% on the day news of Schwab’s move broke, E*Trade’s shares rose more than 3% on Monday.“Frankly, if I’m on the E*Trade board I’m certainly feeling a sense of urgency to find a buyer,” said Thomas Bradley, former president of TD Ameritrade.An E*Trade spokesman didn’t respond to a request for comment outside normal business hours.Some advisers were on edge about the tie-up. Those who use Schwab to safeguard assets wonder if they’ll be able to maintain the same level of service, especially for smaller clients.“Less competition can lead to less negotiating power,” said Matt Cosgriff, a wealth management group leader at BerganKDV.Roger Ward, principal wealth adviser at TrueWealth Management in Atlanta, said that Schwab’s dominant position in the industry made Monday’s announcement almost inevitable.“When they change course it can take time,” he said of the 20,000-person company. “But when they get on the desired course, they are financially strong enough and culturally motivated enough to roll over smaller contributors like TD Ameritrade.”\--With assistance from Suzanne Woolley, Michael McDonald, Matt Turner and Doug Alexander.To contact the reporters on this story: Annie Massa in New York at amassa12@bloomberg.net;Matthew Monks in New York at mmonks1@bloomberg.net;John Gittelsohn in Los Angeles at johngitt@bloomberg.netTo contact the editors responsible for this story: Sam Mamudi at smamudi@bloomberg.net, David GillenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • US STOCKS-Wall Street sets records on trade progress optimism
    Reuters

    US STOCKS-Wall Street sets records on trade progress optimism

    Each of Wall Street's three major averages kicked off the trading week by closing at records on Monday as signs pointed to progress between the United States and China on a trade truce, while a round of merger deals also helped buoy sentiment. Gains on Monday were broad with only the defensive consumer staples and utilities S&P sectors in the red.

  • Stock Market Live Updates: Stocks rally on deals, S&P 500 and Nasdaq have record closes
    Yahoo Finance

    Stock Market Live Updates: Stocks rally on deals, S&P 500 and Nasdaq have record closes

    Headlines moving the stock market in real time.

  • US STOCKS-Trade optimism fuels S&P, Nasdaq to records
    Reuters

    US STOCKS-Trade optimism fuels S&P, Nasdaq to records

    The S&P 500 and the Nasdaq indexes climbed to new record highs on Monday as signs indicated the United States and China were moving closer to a trade truce, while a host of merger deals also helped buoy sentiment. Gains on Monday were broad with only the defensive consumer staples and utilities S&P sectors in the red.

  • US STOCKS-S&P 500, Nasdaq hit new highs as chips climb on trade optimism
    Reuters

    US STOCKS-S&P 500, Nasdaq hit new highs as chips climb on trade optimism

    The S&P 500 and the Nasdaq indexes hit fresh record highs on Monday as a report that the United States and China were nearing a trade truce sparked a rally in Apple and semiconductor stocks, with sentiment also buoyed by a raft of blockbuster deals. Gains in trade-sensitive chip stocks, including Applied Materials Inc and Lam Research Corp, helped lift the Philadelphia Semiconductor index 2.28% after a Chinese state-backed tabloid said Beijing and Washington were "very close" to an initial pact.

  • Why merging may be better than trying to grow in 2019
    Yahoo Finance

    Why merging may be better than trying to grow in 2019

    Companies have to look to mergers to boost growth, analysts say

  • Bloomberg

    Schwab's Mammoth Deal Has to Win Over the Little Guy, Too

    (Bloomberg Opinion) -- It’s official: Charles Schwab Corp. has agreed to buy TD Ameritrade Holding Corp. for $26 billion in an all-stock transaction. Now the question on Wall Street is whether the acquisition, which would create a behemoth with $5 trillion in assets, will come under scrutiny from antitrust regulators. There are a number of arguments for an antitrust review. For one, Schwab is the market leader in safeguarding assets managed by registered investment advisers, holding about half the market. By purchasing TD Ameritrade, it would add another 15% to 20% share, according to a note from Keefe, Bruyette & Woods. The deal also could allow Schwab to boost fees on other services, or reduce interest paid to investors on their accounts. Effectively, the company eliminated commissions for U.S. stocks, exchange-traded funds and options, but that headline-grabbing move could very well mask hidden charges elsewhere.Bloomberg News’s Felice Maranz and David McLaughlin compiled a roundup of analysts’ expectations. Cowen analyst Jaret Seiberg suggested regulatory scrutiny could stretch into the third quarter of 2020. UBS’s Brennan Hawken sees “a lot of execution risk.” Bank of America Corp.’s Michael Carrier said Toronto-Dominion Bank’s 43% stake in TD Ameritrade could cause “some complications,” including tougher regulatory approval.While the potential hurdles are very real and Wall Street’s concern about them are valid, I’d add another concern: namely, that combining Schwab and TD Ameritrade could be considered “anti-trust” in a different way.One of Schwab’s main competitors, Fidelity Investments, was quick to release a statement on Monday that piggybacked on some of these concerns, noting that "acquisitions of this size can be long, complex, and unsettling.” Kathy Murphy, president of Fidelity’s Personal Investing business, added this:“Unfortunately for investors, the combination of Charles Schwab and TD Ameritrade means they will likely be doubling down on revenue practices that directly disadvantage investors, including paying extremely low cash sweep rates and taking significant payment for order flow. These practices can easily outweigh any benefit of $0 online commissions.”Schwab’s path forward most likely lies in expanding its reach in financial advisory services. That’s a highly personal industry by nature. Sure, some people are willing to take financial planning into their own hands, or use algorithms to help them invest. But even with the internet democratizing all aspects of society, it still feels like the average person would want to have someone holding their hand as they lay out a strategy to buy a house, or send children to college, or save most efficiently for retirement. When it comes to bond markets, for instance, it’s clear that a good chunk of investors don’t have a good handle on what fixed income is all about.   Walt Bettinger, Schwab’s chief executive officer, said in a statement that the combined firm will “be uniquely positioned to serve the investment, trading and wealth management needs of investors across every phase of their financial journeys.” It’s an open question, though, whether Americans prefer to use a massive institution as a one-stop shop. As Cowen’s Seiberg pointed out, there’s something of a growing “anti-big business” sentiment focused on large banks and technology companies. Schwab would seem to be the cross-section of both of those targets.Many details on Schwab’s acquisition and the potential synergies are still to come. But industry consolidation and the growing emphasis on technological innovation will clearly put increased pressure on its small and mid-sized competitors. For those firms, “the risk is that they lose market share, including in smaller communities where more personal brick-and-mortar financial services are harder to come by,” according to Bankrate.com senior economic analyst Mark Hamrick. I’ve written before about how finance industry professionals can easily get lured into sweeping generalizations. In the case of discount online brokers, the line is that no-fee trading is a big win for the consumer. “I’ve been on that pursuit, that mission basically for almost 40 years,” Charles Schwab (the founder) said after the company’s move to zero commissions. “We just hope more people will come and enjoy the benefits that Schwab provides.”If successful, this combination will almost surely bring more investors under Schwab’s tent. It’s up to the company to convince them that even as an industry giant, it’ll always keep the little guy in mind.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.