Displaying items by tag: jp morgan

Thursday, 09 May 2019 11:34

JPM Weighs-in on the Trade War

(New York)

Investors are currently worried about the trade war between China and the US. Tensions have reached a new peak this week after threats from President Trump regarding hiking the tariff rate to 25%. This big development, and the trade war generally, prompted JP Morgan CEO Jamie Dimon to weigh in this week. “The odds of something bad happening [in trade negotiations] is now double. Whatever you thought they were — 2%, 5%, 10% is probably doubled. That’s why the market is reacting to it because they’re not just afraid of the direct effect, they’re afraid if it reverses global trade, it reverses global growth and hurts trade around the world”. All that said, he sees an 80% likelihood a deal will occur because smart people on both sides will make it happen.


FINSUM: We agree with Jamie. Both sides have a lot on the line and we think everyone will eager to seal a deal, even if a modest one, and move on. Perhaps that is western-centric thinking though.

Published in Eq: Total Market
Thursday, 18 April 2019 13:50

Buy JPM and Goldman on the Cheap

(New York)

If you want to pick up some great bank stocks at a great discount, now is the time to do it. Despite great earnings, JP Morgan still looks inexpensive. Goldman Sachs does too. Both banks saw big trouble in their trading divisions in the first quarter, which has led to some attractive valuations. The problem for investors is that markets that keep doing what they have will not be bullish for the banks (i.e. low volatility), so options strategies may be the best way to play the situation.


FINSUM: Nothing would be better for this trade than if there was another big market disturbance that drove a bunch of volatility, which is quite good for trading revenue.

Published in Eq: Financials
Monday, 15 April 2019 13:22

Goldman’s Profits Tumble

(New York)

Goldman Sachs investors took it on the chin this week. Earnings numbers just released look pretty grim, especially as compared to some other banks, like JP Morgan, which had good showings. The bank got hit by a triple whammy of lower trading revenues, weaker private equity profits, and lower fees from investment banking, all of which conspired to bring earnings down by 20% in the first quarter. David Solomon, CEO, is promising the company is undertaking a “front to back” performance review of Goldman’s businesses.


FINSUM: This looks particularly poor because JP Morgan was able to achieve the highest ever quarterly profit of a US bank during the same period.

Published in Eq: Financials
Monday, 08 April 2019 13:13

JP Morgan Makes Big Wealth Management Push

(New York)

JP Morgan looks like it is about to push further into wealth management. JP Morgan has always had a solid wealth management practice, but one much smaller than wirehouses or other large broker-dealers. However, the firm has now announced that it is planning to grow headcount in the area by nearly 20%, adding over 1,000 new advisors. According to CEO Jamie Dimon, “We are expanding our footprint to capture more of the opportunity across the U.S. wealth management spectrum — from mass affluent ($500,000 to $3 million) to high-net-worth ($3 million to $10 million) to ultra-high-net-worth ($10 million or greater)”.


FINSUM: Wealth management is a very good business if you can get assets, and it seems like JP Morgan is waking up to the fact that it has a better opportunity in the area than it formerly realized.

Published in Wealth Management
Thursday, 04 April 2019 13:47

JP Morgan Warns of Volatility to Come

(New York)

JP Morgan is telling investors to get ready for a “new normal” of volatility. The bank’s CEO, Jamie Dimon is warning investors that global headwinds and liquidity constraints because of tighter regulations will mean there are bigger price swings in markets from now on. Dimon cited the Fed’s policy change, Germany’s slowdown, Brexit, and the US-China trade war.


FINSUM: We are so tired of this argument that tighter bank regulation hurts liquidity and leads to bigger market swings. Bank-provided liquidity is the great myth of the post-Dodd-Frank era. When markets get tough, bank trading desks often step away from the market, meaning liquidity vanishes just when you need it most.

Published in Eq: Total Market
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