Tue, Sep. 1, 2:47 PM
- The dream of higher interest rates is looking a little fuzzier at the moment, as China leads markets lower again, and the Fed's Eric Rosengren suggests the conditions for a rate hike have still yet to be met. If Friday's payroll number disappoints - and there's at least some reason to expect that - a Sept. move looks off the table.
- The Financial SPDR (NYSEARCA:XLE) is down 3% vs. the S&P 500's 2.3%.
- Life insurers: MetLife (MET -3.7%), Prudential (PRU -3.9%), Lincoln National (LNC -4.2%)
- Money-center banks: Citigroup (C -4.4%), JPMorgan (JPM -3.6%), Wells Fargo (WFC -3.8%)
- Regional banks: U.S. Bancorp (USB -4.3%), Regions Financial (RF -4.1%), KeyCorp (KEY -4.3%), SunTrust (STI -4.2%), M&T Bank (MTB -4.2%)
- Online brokerage: E*Trade (ETFC -4.8%), Schwab (SCHW -3.8%), Ameritrade (AMTD -3.4%)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, BTO, IAT, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KBWR, KRU, RWW, RYF, FINZ, KRS
Fri, Aug. 28, 11:10 AM
- There's plenty of precedent for the recent market action, says Morgan Stanley's Adam Parker, noting the market has dropped more than 5% 16 times since March 2009, and each time has moved on to new highs.
- His half-glass view is that the economy is in the middle of its longest expansion ever, and a less-active Fed, a nervous consumer maybe saving more, a lower oil price, and a flattish dollar all argue for continued expansion.
- Morgan's top ideas to buy on the pullback: AGN, AMZN, AAPL, AVGO, BAC, BKU, DAL, GILD, GOOG, GOOGL, HLT, JPM, KR, LEN, LMCK, MGA, MBLY, NWL, QCOM, SABR, CRM, SBAC, SBUX, BX, TMO, VRSK, WWAV, XL.
Tue, Aug. 25, 11:23 AM
- "Like the basketball player LeBron James, [JPMorgan Chase] is good at both offense and defense,” CLSA analysts Mike Mayo and Chris Spahr write as they upgrade JPM shares to Buy from Outperform with a $78 price target.
- For defense, JPMorgan (JPM +4.3%) has "a balance sheet that is the most resilient since it has been in its current form, the most stable earnings of U.S. global banks for the past decade, and a dividend level vs. the 10-year that implies stock outperformance 85% of the time," CLSA says.
- For offense, JPM "is a unique self-help story given tailwinds from expense savings" and has "historically gained market share in tougher environments."
- Banking shares are broadly higher but the upgrade seems to be giving JPM an extra boost; three analyst upgrades appear to be helping Bank of America (BAC +5.2%) in similar fashion.
Wed, Aug. 19, 3:42 PM
- The new venture - Securities Product Reference Data, or SPReD - is likely to be launched in the next six to 12 months, reports the WSJ, with each of JPM, GS, and MS investing seven figures.
- The company will pull together and clean massive amounts of reference data on financial instruments at a lower cost than what each bank would spend on its own.
- With revenue growth slow and compliance costs on the on a fast rise, banks are under pressure to find savings wherever possible. Noninterest expenses at the six largest U.S. banks by assets rose 11.9% from 2009 to 2014. Data management spending is typically in the tens of millions of dollars, but can go as high as nine figures for the largest lenders, according to Deloitte Consulting.
Wed, Aug. 19, 3:51 AM
- JPMorgan (NYSE:JPM) is in advanced talks with the SEC to pay more than $150M for steering clients to its own investment products without proper disclosures.
- Citigroup (NYSE:C) has agreed with the New York attorney general to return $4.5M in management fees charged on some 15,000 frozen accounts.
- BNY Mellon (BK) will shell out $14.8M to settle several intern-related bribery cases.
Mon, Aug. 17, 10:26 AM
- Among the reasons noted by analyst Chris Mutascio is an attractive valuation at just 9.7x his 2017 EPS estimate.
- There's also the bank's leverage to rising interest rates, and the potential for boosted dividends and buybacks.
- New regulations, says Mutascio, have "de-risked" business segments and strengthened the balance sheet - meaning greater earnings consistency through economic cycles, and thus deserving a higher P/E multiple.
- With the upgrade, JPMorgan (JPM -0.2%) is the only Outperform-rated name in KBW's 11 large bank coverage universe.
Thu, Aug. 6, 2:02 AM
- More moving out of the Big Apple? JPMorgan (NYSE:JPM) is relocating 2,150 jobs from Manhattan to Jersey City to benefit from an incentive program offered by the state of New Jersey.
- The bank, which was looking at options to expand its regional technology and operations hub, will get $19M in subsidies for the move across the Hudson.
Fri, Jul. 31, 7:52 AM
- According to Reuters, the value of merger and acquisition deals through July 30 was $436.4B, including 14 deals worth over $5B apiece. Although down from June's torrid pace of $546.8B, it still ranks as the seventh busiest month on record. Leading the pack was Teva's $40.5B purchase of Allergan's generic drugs business.
- The top investment bank in terms of the total value of transactions was Goldman Sachs (NYSE:GS), involved in 35 deals worth $148.8B, including half of the top ten. JP Morgan (NYSE:JPM) was second with 30 deals worth $116.1B while Morgan Stanley (NYSE:MS) was third with 33 deals valued at $95.9B.
- Global M&A so far this year is $2.64T, up 41% from last year. The action in the U.S. is up 66%.
- Energy and healthcare are the leading sectors. There have been 1,557 deals in energy worth $407B. Healthcare is close behind with 1,577 deals worth $395B.
- ETFs: UNG, USO, OIL, UGAZ, UCO, DGAZ, UWTI, BIB, SCO, BNO, BOIL, GAZ, DBO, DWTI, DTO, UGA, KOLD, USL, GRX, UNL, IRY, BIS, IXJ, DNO, BME, UHN, DBE, OLO, SZO, DCNG, GRN, RJN, FUE, OLEM, JJE, ONG, UBN
Wed, Jul. 22, 9:41 AM
- Rather than an attempt to steal financial data, last summer's computer hack on JPMorgan (NYSE:JPM) looks to have been part of an attempt at a stock scheme.
- The Feds yesterday announced the arrest of four men (with a 5th still at large) in connection with a series of investment frauds, and the authorities suspect some of them were involved in last summer's JPM hack.
- Though none have been charged for a role in that affair, investigators hope they'll get enough cooperation to do so at some point.
- Those arrested are suspected of a multiyear penny-stock pump-and-dump campaign, and authorities believe the theft of email addresses from JPMorgan was an attempt at finding new blood to target.
Wed, Jul. 22, 2:15 AM
- U.S. authorities have charged five people in the first cases bearing some link to last year's massive cyber attack on JPMorgan (NYSE:JPM), which exposed the contact information of 83M accounts.
- The men were accused of crimes ranging from securities fraud to money laundering - not with anything directly related to the attack on the bank - but officials confirmed there was a link.
- Four of the men were arrested in Florida and Israel, while a fifth remains at large.
- Previously: Authorities closing in on JPMorgan hackers (Mar. 16 2015)
- Previously: 83M accounts exposed in JPMorgan data breach (Oct. 03 2014)
Mon, Jul. 20, 2:55 PM
- JPMorgan (JPM +0.4%) faces the largest capital "surcharge" or 4.5% of its risk-weighted assets, with the other seven lenders falling in the 1-3.5% range.
- Citigroup's (NYSE:C) surcharge is 3.5%, BofA (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) 3%, Wells Fargo (NYSE:WFC) 2%, State Street (NYSE:STT) 1.5%, and Bank of New York Mellon (NYSE:BK) 1%. Taken together, the group's capital cushion will more than $200B larger than if the surcharge was not implemented.
- The surcharges will begin to be implemented on January 1, and fully phased in by January 2019. JPMorgan has taken steps to boost its capital levels, and Fed officials indicate the bank is about $12.5B shy of the full surcharge, reports the WSJ.
- The other lenders currently have the necessary capital.
- This new requirement comes on top of the existing base 7% common-equity capital standard necessary for most banks.
- Federal Reserve press release
Mon, Jul. 20, 12:45 PM
- With Q2 results for the nation's largest banks now all in, Dick Bove says the key takeaway is operating earnings - which eliminates taxes, and the impact from loan losses and reserve releases - are not just growing, they're jumping. By his calculation, the operating earnings for BAC, C, JPM, and WFC are up 23% for the last twelve months compared to the previous period.
- Asset quality is far better nowadays as well, he says, noting the new regulatory regime has forced lenders to hold a higher amount of government-guaranteed paper on their books. "The addition of capital, cash, and government-backed securities means that the book value of these companies is very real. Yet, at least two of the big banks sell at a discount to this value."
- More bullish points: The most onerous and costly of the new regulations are already out there, litigation - while continuing - won't be nearly as expensive going forward, M&A is on the rise, and trading activity is coming back.
- Most importantly, says Bove, is that investment psychology is shifting. "The attitude that banks are utilities that can never show earnings gains is disappearing. The view that bank asset values are overstated is gone or should be gone. The view that the government has multiple new ways to attack these companies is also disappearing."
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IAI, SEF, IYG, FXO, FNCL, FINU, RWW, RYF, FINZ
Mon, Jul. 20, 9:51 AM
- JPMorgan (JPM +0.4%) last week agreed to pay $388M to settle a suit from the Forth Worth Employees' Retirement Fund and other investors related the sale of $10B of residential MBS.
- The suit claimed the bank misled the investors about the soundness of the paper which the plaintiffs saw was worth at most $0.62 on the dollar when sold to them.
- Previously: JPMorgan's top lawyer moving aside (July 6)
Sun, Jul. 19, 7:51 AM
- JPMorgan (NYSE:JPM) has agreed to pay $388M to settle a suit by investors who claimed the bank misled them about the safety of $10B worth of residential MBSs it sold before the financial crisis.
- The lawsuit, brought by Fort Worth Employees' Retirement Fund and other investors, accused JPMorgan of misleading them about the underwriting, appraisals and credit quality of the home loans underlying the certificates.
Tue, Jul. 14, 9:35 AM
- Trading has become a much more stable business for the bank, says JPMorgan (JPM +0.5%) CEO Jamie Dimon, speaking on the conference call. "We've had only a handful of trading loss days." CFO Marianne Lake says it's too early to say how Q3 trading revenue is faring, but sounds somewhat optimistic given the tumult surrounding Greece, China, and Puerto Rico. "We generally do well in more difficult markets."
- Webcast and presentation slides
- Core loans are are growing across most of the bank's categories, says Lake, with mortgage lending growing the fastest. The most challenging area is middle market lending ... "Everyone is chasing that sector."
- Responding to a question about branch footprint (it's been shrinking), Dimon says "We are thinking about attacking a new city in a major way."
- Previously: Cost controls help push JPMorgan to bottom-line beat (July 14)
- Previously: JPMorgan Chase beats by $0.10, misses on revenue (July 14)
Tue, Jul. 14, 7:32 AM
- Q2 net income of $6.29B or $1.54 per share vs. $5.914B and $1.45 in Q1, $5.98B and $1.46 one year ago. ROTCE of 14%, flat from Q1 and from one year ago. Total noninterest expense of $14.5B drops from $14.9B in Q1 and $15.4B a year ago.
- Tangible book value per share of $46.13 up 7% Y/Y. Basel III CET1 ratio of 11%.
- Consumer & Community Banking net income of $2.5B up a hair from one year ago on revenue of $11B down from $11.5B. Net interest income of $6.9B down 2% as spreads continue to compress. Mortgage banking net income of $584M down 20%. Noninterest expense of $6.2B down from $6.5B.
- Corporate & Investment Bank net income of $2.3B vs. $2.1B a year ago, on revenue of $8.7B vs. $9.3B. Adjusting for business simplification and Markit IPO gain, markets revenue fell 1%, and fixed income markets revenue fell 10%. Equity markets revenue gained 27%.
- Commercial Banking net income of $525M down form $677M a year ago. Asset Management net income of $451M vs. $569M. AUM of $1.8T up 4%.
- Conference call at 8:30 ET
- Previously: JPMorgan Chase beats by $0.10, misses on revenue (July 14)
- JPM +0.8% premarket
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