Oct 2, 2019

Commission fees fall, taking stock prices with them

Dion Rabouin, author of Markets
Expand chart
Data: FactSet; Chart: Axios Visuals

After seeing its stock price plunge 26% in Tuesday trading, brokerage firm TD Ameritrade announced it would offer free stock, ETF and options trades, starting Thursday.

Threat level: Investors are worried that the race to the bottom, now clearly in full swing, will blow a hole in the profitability of online brokerage companies. Shares of the companies already were struggling this year.

  • Charles Schwab — the largest of the publicly traded brokers with 12 million customers — made the same offer to clients earlier in the day, sparking a massive selloff among the top brokerage firms.
  • Interactive Brokers cut fees to zero on stocks and ETFs last week.

By the numbers:

  • Schwab's stock fell 9% on the day.
  • E-Trade's stock dropped 16%.
  • Interactive Brokers' stock lost 9%.

Of note: TD Ameritrade makes a particularly large (25%) share of its revenue from commission fees, according to analysts at investment bank JMP Securities.

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Biden formally secures Democratic presidential nomination

Joe Biden speaks at Delaware State University's student cente on June 5. Photo: Jim Watson/AFP via Getty Images

Former Vice President Joe Biden became the formal Democratic presidential nominee on Friday evening, per AP.

The big picture: Biden has been the presumptive frontrunner to take on President Trump since Sen. Bernie Sanders suspended his campaign in early April.

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Illustration: Sarah Grillo/Axios

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Scoop: German foreign minister to travel to Israel with warning on annexation

Heiko Maas. Photo: Michael Kappeler/picture alliance via Getty Images

German Foreign Minister Heiko Maas is expected to travel to Israel next week to warn that there will be consequences if Israeli leaders move forward with plans to annex parts of the West Bank, Israeli officials and European diplomats tell me.

Why it matters: Israeli and European officials agree that if Israel goes ahead with unilateral annexation, the EU will respond with sanctions.