Displaying items by tag: jp morgan

Wednesday, 18 July 2018 10:07

JP Morgan Warns Investors to Go on the Defensive

(New York)

Investors look out, it is time to go on the defensive, at least according to JP Morgan. The top strategist at JPMorgan Asset & Wealth Management, Michael Cembalest, has just told investors that the growing trade war and its threat to markets and the economy means investors need to be very worried. Cembalest points out that this will be the first sustained rise in tariffs across the global economy in 50 years and it is a profound shift away from decades of historical precedent. If the US proceeds with a further $200 bn tariff package on top of its $34 bn package, then markets could be in for a wild ride, says JP Morgan. They advise to focus on consumer staples and tech stocks.


FINSUM: This is a pretty stark warning from JP Morgan and it does make sense. Because there is little recent precedent for trade war, the market may not be accurately pricing the threat it poses.

Published in Eq: Large Cap
Tuesday, 17 July 2018 09:21

A New Boom Time for Financials

(New York)

US financial shares might be in for a quick ride higher. Bank of America’s earnings came in 33% higher than last year, leading to a blowout for the sector. The news followed strong earnings from JP Morgan and Citi. BAML’s shares rose over 4% on the news with one analyst commenting that the numbers were “almost all you could have hoped for”. Rising interest rates were a key factor in the increasing earnings, as banks earned more from net interest margins.


FINSUM: These are great numbers, but they may only be temporary. Consumers have not yet started demanding higher interest payments on savings, but once they do (and we think they will), then banks’ net interest margins will start shrinking again.

Published in Eq: Large Cap
Tuesday, 01 May 2018 02:22

JP Morgan Says Market Will Collapse

(New York)

JP Morgan has just put out a guide which may be very interesting to investors—a manual for how to navigate the end of easy money. The bank thinks the equity market’s response to earnings has been very worrisome lately, and they are very bearish. The bank recommends that in 2019, investors go underweight equities and long gold and long duration as the economic cycle ends and real rates “collapse”.


FINSUM: This is an extraordinarily bearish outlook from JP Morgan, and it seems mostly dictated by weakness in equity prices lately. Investors should take this warning seriously.

Published in Macro
Monday, 02 April 2018 09:40

The Coming Bank Rally is a Myth

(New York)

There is some speculation that bank stocks may be set to go on a tear. Rising rates are usually good for banks. They cause bond volatility, which boosts trading income, and they boost net interest margins, which raises interest income. However, so far this year, things have been weak. Barron’s also adds a solid point—insiders are not buying bank stocks. It has been two years since Jamie Dimon bought his company’s stock, and BAML top brass have been notably absent too. That seems to reflect a lack of conviction on the part of management.


FINSUM: The lack of buying from management is a troubling sign for us, as they certainly have the best insight into the future of the company. It is odd though, as ostensibly things look very positive.

Published in Eq: Large Cap
Friday, 09 March 2018 10:20

Amazon Poised to Launch Robo Advisor

(New York)

Advisors look out. The big bang moment in wealth management might be about to happen. That moment might be when Amazon launches its own robo advisor, taking the concept to the masses in a way that has not been done before. Amazon is already getting involved in finance with its pursuit of checking accounts and ecommerce retailer Overstock.com is launching its own robo. One wealth management commentator put it this way, saying “Advisers have their head in the sand; they are in denial … Many think this won’t affect them or their clients … There were probably a large number of buggy manufacturers that were saying the same thing in 1910”. Amazon has a mountain of using data on people’s spending habits, which could give them a leg up.


FINSUM: It seems like only a matter of time before Amazon moves in this direction. There is still good margin to be had in this space, which makes it ripe for Amazon.

Published in Wealth Management
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