JPMorgan Chase & Co.’s brokerage unit recently lured a Miami team from UBS Wealth Management USA with $4.8 million in revenue, while also picking up a solo advisor from Goldman Sachs who produced $2.3 million in Boston. The Fernandez Cabrera Group, which is led by Pedro Fernandez and Jesus (J.C.) Cabrera joined J.P. Morgan Advisors on Friday and had overseen $700 million in assets as of year-end at UBS. Fernandez and Cabrera moved along with client associate Charlene Meizoso. They report to Rick Penafiel, regional director for Boston, Miami, and Palm Beach Gardens. Fernandez started his financial career at Sanford C. Bernstein & Co. in 2004 and joined UBS in 2014. Cabrera started as a broker in 1984 at First Investors Corporation and only stayed at the company for a year. He registered again in 2012 when he joined Bernstein. In addition, Brent Herbert joined J.P. Morgan in February after overseeing around $445 million in assets at Goldman. He has 13 years of experience and joined Goldman in 2017 from Mizuho Securities. Herbert also reports to Penafiel. JPMorgan is close to two years into a campaign to double its headcount from the roughly 450 at its traditional brokerage.

Finsum:J.P. Morgan lured away a $4.8 million duo from Miami, while also adding a $2.3 million solo advisor from Goldman Sachs.

Category: Wealth Management

Keywords: JPMorgan, UBS, Goldman Sachs, recruiting

Fixed-income professionals at Franklin Templeton and its affiliates expect fixed-income investments to be a safe haven from equities volatility since the financial markets are showing signs of stress. Tracy Chen, a portfolio manager at Brandywine Global, stated that “We believed something would break, even before this banking crisis happened. Now bonds provide safe haven protection for people’s portfolios because our timeline for recession is pulled forward because of this banking stress.” She recently spoke at a webinar on fixed-income mega-trends, entitled “Navigating Rates and Risk.” She was also joined by Jennifer Johnston, senior vice president and director of municipal bond research at Franklin Templeton, and Annabel Rudebeck, head of non-US corporate credit at Western Asset. Currently, yields are around 5% for corporates, which is considered attractive when compared to the longer-term history and government issuances. Johnston added that the tax-free attributes of municipal bonds provide an extra boost, while the muni market tends to be of higher quality than the corporate market. She stated, “We do see some opportunities, particularly out long, where munis are still relatively cheaper than where they’ve been in the past.” Chen also added that “This banking stress is very unique. It’s not driven by credit risk, but by mismanagement of duration.”

Finsum:With the financial markets showing stress, bond professionals at Franklin Templeton and its affiliates believe that fixed-income instruments provide a safe haven for the current stock volatility.

On March 15th, the International Energy Agency raised its estimate for global oil demand in 2023 by another 100,000 b/d as rebounding air traffic and pent-up Chinese demand push consumption to record highs. In its latest monthly oil report, the energy watchdog said it now sees global oil demand averaging 102.02 million b/d in 2023. That’s 2 million b/d higher than in 2022. The IEA estimates that gains will accelerate over the year, rising to 2.6 million b/d year on year in the fourth quarter, from 710,000 b/d in the current quarter. In the report, IEA stated, "Global oil demand growth started 2023 with a whimper but is projected to end the year with a bang .... Rebounding jet fuel use and a resurgent China will see an overall Q1-Q4 ramp-up of 3.2 million b/d, the largest relative in-year increase since 2010 with oil use surging to 103.2 million b/d in second-half 2023." The agency attributes the rise in demand to China's economic momentum, with rebounding February Purchasing Managers' Index data and robust air traffic demand. The IEA said Chinese mobility mostly stabilized after January's "remarkable bounce." It also added that Chinese air traffic with domestic flights is now well above pre-pandemic levels. Due to this, the IEA raised its estimate for Chinese jet/kerosene demand by 60,000 b/d.

Finsum:In its recent monthly oil market report, the International Energy Agency raised its estimate for global oil demand this year by another 100,000 b/d as rebounding air traffic and pent-up Chinese demand push consumption to record highs.

Bond volatility continued to explode last week due to growing contagion fears from U.S. banks. Last Monday, after a weekend in which the U.S. government intervened to protect depositors of Silicon Valley Bank and Signature Bank, the 2-year U.S. note yield experienced its biggest one-day fall since October 20th, 1987. Outside of U.S. hours, it dropped the most since 1982. That intraday drop of close to 60 basis points even exceeded the declines during the 2007-2009 financial crisis, the September 11th, 2001, terrorist attacks, and 1987’s Black Monday market crash. Gregory Staples, head of fixed income North America at DWS Group in New York told MarketWatch that the week’s decline in the 2-year U.S. yield came as the result of “de-risking of portfolios and draining of liquidity, stemming from concerns about the health of the U.S. banking system, exacerbated by questions about the future of Credit Suisse.” The ICE BofAML Move Index, which measures bond-market volatility, surged on Wednesday and Thursday to its highest levels since the fourth quarter of 2008, during the height of the Financial Crisis. Volatility then continued on Friday over concerns around First Republic Bank. This sent Treasury yields plunging, one day after they spiked on the news of a funding deal.

Finsum:Last week, the ICE BofAML Move Index, a measure of bond-market volatility, soared to its highest levels since the 2008 Financial Crisis as banking concerns continue.

Over the past two weeks, Treasuries have been considered a safe haven for investors amid the current turmoil in the banking system. While Monday offered a quick respite as investors learned of the news that UBS is rescuing Credit Suisse in a $3.24 billion deal, yields are expected to move lower in the days and weeks ahead if the turmoil continues. Kelsey Berro, a portfolio manager in J.P. Morgan Asset Management’s global fixed-income group told Barron’s that “The direction for Treasury yields should be lower." She added that “This month’s bank-related volatility shows that high-quality bonds are working as a portfolio diversifier this year.” Rick Bensignor, managing partner of Bensignor Investment Strategies concurs. He told Barron’s that he thinks Treasury prices will go higher, pushing yields lower. He says that he “Can see the 10-year Treasury’s yield falling to 3.2% or even 3.1%, compared with 3.48% on Monday afternoon.” Bensignor expects that “There will be more banks that are going to let us know how much trouble they are in. It’s going to force people into the safety of the bond market.”

Finsum:While Monday offered a brief respite, treasuries yields are expected to move lower if the upheaval in the banking system continues, according to bond strategists.