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Banks Roughed Up Again on Shutdown Day 8: Financial Losers

Some analysts think the government has a bit more wiggle room than that, assuming the Republican-led House of Representatives and the Democrat-led Senate fail to come to an agreement by the date given by Lew.

In Deutsche Bank's morning market research note on Tuesday, the firm's analyst team wrote "We believe the Treasury can fund the government until the end of the month, up to October 31."

President Obama in remarks at the White House Tuesday said he was "happy to talk" with House Republicans over the political parties' disagreements on the federal budget, but added that "having such a conversation, talks, negotiations, shouldn't require hanging the threats of an economic shutdown or economic chaos over the heads of the American people," according to

In other words, Obama continues to require Congress to raise the federal debt limit before he negotiates any spending cuts.

Bank of New York Mellon

Shares of Bank of New York Mellon have returned 17% this year. The shares trade for 11.7 times the consensus 2014 EPS estimate of $2.54. The consensus 2013 EPS estimate is $2.29.

The company is scheduled to announce its third-quarter results on Oct. 16, with analysts on average estimating net income of $673 million, or 58 cents a share, declining from $818 million, or 71 cents a share, the previous quarter, and $720 million, or 61 cents a share, a year earlier.

Analysts expect a significant decline in trading revenue for large-cap banks, as investors were shy during the months leading up to the Federal Open Market Committee's meeting in September, when the committee left the Federal Reserve's "QE3" policy unchanged, with monthly long-term bond purchases of $85 billion.

In his third-quarter earnings preview for trust banks, Jefferies analyst Ken Usdin on Oct. 3 wrote "There is little chance of offsetting the weaker revenues with cost controls given several expense headwinds: the annual merit increase, a rebound in the "other" line and less help from the efficiency plan."

Usdin rates Bank of New York Mellon a "hold," with a $34 price target.

BK Chart BK data by YCharts

Interested in more on Bank of New York Mellon? See TheStreet Ratings' report card for this stock.


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
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