Wed, Feb. 18, 2:49 PM
- The financial sector had begun to turn around a dismal start to the year as February brought forth a string of hawkish Fed heads suggesting a June rate hike, but the XLF is lower by 0.8% after just-released FOMC minutes suggest markets and the hawks are getting ahead of themselves. KBE -1.7%, KRE -2%
- The TBTFs: BofA (BAC -2.2%), JPMorgan (JPM -1.4%), Wells Fargo (WFC -1.6%), Ciitgroup (C -0.8%)
- The regionals: Regions Financial (RF -1.6%), KeyCorp (KEY -1.6%), PNC Financial (PNC -1.3%), BB&T (BBT -1.5%), Fifth Third (FITB -1.6%), SunTrust (STI -1.7%), First Niagara (FNFG -2.1%), M&T (MTB -1.9%), U.S. Bancorp (USB -1.3%), First Horizon (FHN -2.7%).
- Online brokerage: Schwab (SCHW -2.3%), E*Trade (ETFC -1.7%), Ameritrade (AMTD -1.1%), Interactive Brokers (IBKR -0.9%).
- Previously: FOMC minutes: June rate hike not a slam dunk yet (Feb. 18)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KCE, KRU, RWW, KBWR, RYF, KBWC, FINZ, KRS
Wed, Feb. 18, 7:35 AM
- While not necessarily looking to exit businesses like interest rate trading, prime brokerage, and the so-called delta-one equities desk, new regulatory/capital rules have made them less profitable, and Daniel Pinto, CEO of JPMorgan's (NYSE:JPM) corporate and investment bank, is looking at ways to boost efficiency, reports Bloomberg.
- JPMorgan isn't the only one eyeing cuts, and the bank has actually gained market share since the financial crisis as competitors have pulled back. Profitability, however, is down, with ROE at the unit falling to 10% last year from 15% in 2013, and a new Fed proposal might require even more capital be allocated to the business.
Wed, Feb. 11, 3:07 PM
- Another banker exiting for greener pastures, or perhaps signaling the lender's bigger ambitions in Mexico, JPMorgan's (JPM -0.2%) head of debt underwriting for that country, Luis de la Pena, is leaving the bank today.
- JPMorgan was Mexico's 8th-largest bond underwriter in 2014 with about a 6% market share, according to Bloomberg. De la Pena had been with the bank since 2012.
Tue, Feb. 10, 2:56 AM
- In the final stages of a long-running investigation, the U.S. Department of Justice has recently informed Barclays (NYSE:BCS), JPMorgan (NYSE:JPM), the Royal Bank of Scotland (NYSE:RBS) and Citigroup (NYSE:C) that they must plead guilty to criminal charges that they manipulated the prices of foreign currencies, NYT reports.
- Last November, regulators fined five major banks a total of $3.4B for failing to stop traders from trying to manipulate the foreign exchange market, following a year-long global investigation.
- In a separate forex probe disclosed today, the NY Department of Financial Services sent subpoenas to several other banks, expanding its investigation of whether the banks' electronic trading platforms allowed them to front-run clients in the forex market.
- Previously: FT: Forex trading probe widens (Feb. 09 2015)
Fri, Feb. 6, 9:50 AM
- Financials have been mercilessly pounded in 2015 as hopes for higher interest rates looked like they might be dashed yet again, but today's blowout jobs number - firmly putting a June rate hike on the table - has brought in the dip-buyers.
- The major averages are flat, but the XLF is up 1.4%. The Regional Bank ETF (KRE +2%) and the Bank ETF (KBE +2.1%) are doing even better.
- Among the yield-starved banking names: Bank of America (BAC +3.1%), JPMorgan (JPM +2.6%), Citigroup (C +2%), Regions Financial (RF +4%), KeyCorp (KEY +3%), PNC Financial (PNC +2.9%), SunTrust (STI +2.3%), Zions (ZION +3.6%), Synovus (SNV +2.3%).
- Insurers: MetLife (MET +2%), Prudential (PRU +3.2%), Lincoln National (LNC +4.6%). AIG (AIG +1.5%).
- Trust banks: BNY Mellon (BK +2.7%) State Street (STT +1.9%), Northern Trust (NTRS +2.3%).
- Online brokers (currently getting killed on money-market fee rebates): Schwab (SCHW +4.5%), TD Ameritrade (AMTD +3.5%), E*Trade (ETFC +2.1%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Tue, Feb. 3, 1:01 PM
- This particular class-action suit has been running for six year and relates to $17.58B of MBS sold by Bear Stearns before JPMorgan (JPM +1.6%) purchased the failing investment bank. Among the plaintiffs in this case were the Public Employees' Retirement System of Mississippi and the New Jersey Carpenters Health Fund.
- A judge must still approve the settlement.
Sat, Jan. 31, 4:22 PM
- JPMorgan (NYSE:JPM) has agreed to pay $99.5M to settle its portion of an antitrust lawsuit in which investors (including hedge funds, pension funds and the city of Philadelphia) accused 12 major banks of rigging prices in the $5.3T-a-day foreign exchange market.
- The settlement follows the bank's agreement last November to pay about $1B in civil penalties to resolve related claims by U.S. and European regulators.
Thu, Jan. 29, 11:47 AM
- "We certainly recognize all the headwinds, notably on the regulatory capital side, but low-hanging fruit on capital efficiency actions should drive some ROE improvement," says the team of David Trone and Pankaj Chitrakar, and they expect better CCAR outcomes for at least a few of the names (including Citi, one would think) in a few weeks.
- As for operating results, whether they come in good or not so good this year hinges on whether the Fed hikes or not. That forecast sounds a lot like 2014, 2013, and 2012, but the two note the likelihood of higher rates appears far higher this year.
- They maintain Buy ratings on Citigroup (C +0.1%), Morgan Stanley (MS +1%), Goldman Sachs (GS +1%), Bank of America (BAC +0.7%), and JPMorgan (JPM +1.1%), with Citi, Goldman, and Morgan Stanley their top picks.
- Previously: Financials go on sale in January (Jan. 24)
Wed, Jan. 28, 7:02 AM
- Frank Gong was appointed to the role less than a year ago, after Fang Fang - CEO for China investment banking at JPM - was forced out amid an investigation into the bank's hiring practices in that country.
- Fang was replaced by Brian Gu and Jing Zhao, who became co-CEOs of investment banking in China.
Tue, Jan. 27, 1:31 PM
- JPMorgan (JPM -0.6%) looks like it was on the right side of the action when the SNB shocked the markets 10 days ago by abandoning its support of the euro/franc floor.
- Bloomberg's Julia Verlaine reports the Bank of Dimon made between $250M and $300M as the franc soared higher following the move.
- The profit at JPMorgan comes as other lenders - reportedly Deutsche Bank, Barclays, and Citigroup - lost hundreds of millions in the tumult.
- Previously: Banks lose millions on SNB move (Jan. 16)
- Previously: Citi reportedly loses more than $150M on Swiss franc move (Jan. 16)
Sat, Jan. 24, 4:48 PM
- The financial sector is off to a worse start to the year than even the energy names, with the XLF down 3.9% YTD vs. the XLE's 3.2% decline. The S&P 500 is roughly flat. The SPDR KBW Bank ETF (NYSEARCA:KBE) is off 7.5%, and the Regional Bank ETF (NYSEARCA:KRE) is lower by 6.9%.
- Q4 earnings results haven't been wonderful, but financial names had been savaged well before those reports started coming out. Instead there's a difficult regulatory regime that won't quit, and - for now - it's looking like "wait'll next year" for the rising interest rates that were supposed to drive profit margins higher. The 10-year/2-year spread - already pretty low at 150 basis points to start the year - has narrowed to 137 bps.
- A partial roll call of banks: Bank of America (NYSE:BAC) -12.1% YTD, Citigroup (NYSE:C) -10.1%, JPMorgan (NYSE:JPM) -9.4%, Morgan Stanley (NYSE:MS) -9.4%, Regions Financial (NYSE:RF) -14.7%, KeyCorp (NYSE:KEY) -4.5%, PNC Financial (NYSE:PNC) -5.4%, Bank of New York (NYSE:BK) -9.1%, Capital One (NYSE:COF) -6%, Discover (NYSE:DFS) -13.6%.
- Other spread-starved sector names: MetLife (NYSE:MET) -9.8%, AIG (NYSE:AIG) -8%, Prudential (NYSE:PRU) -10.8%, Schwab (NYSE:SCHW) -9.9%.
- Some of what's working in financials: Blackstone (NYSE:BX) +6.7%, E*Trade (NASDAQ:ETFC) +1.2%, WisdomTree (NASDAQ:WETF) +12.3%, Legg Mason +2.8%.
Thu, Jan. 22, 4:48 PM
- The JPMorgan (NYSE:JPM) boss received $20M in 2014, equal to 2013, but last year's pay included a cash bonus of $7.4M - his first cash bonus in three years. Bonuses in 2012 and 2013 were limited to stock as the board slapped Dimon on the wrist for presiding over the London Whale mess.
- For all 2014, Dimon received $1.5M in salary, $11.1M in restricted stock, and the aforementioned $7.4M cash bonus.
- JPMorgan common stock gained 7% last year, lagging the S&P 500's Financials Index by 600 basis points.
Wed, Jan. 21, 2:54 PM
- Though it was not JPMorgan's (JPM +0.3%) intention to do so, rules a federal appeals court, the bank clearly authorized counsel to file papers in 2008 making a loan to GM unsecured instead of secured.
- While secured creditors were repaid in full during GM's bankruptcy, unsecured creditors took losses.
- This particular case deals with JPMorgan unintentionally releasing a lien on GM fixtures and equipment. During bankruptcy proceedings, JPMorgan initially won its argument that the security interest was still in effect, but the appeals court today reversed that decision, noting the paperwork had been reviewed by the bank managing director responsible for the loan, as well as counsel.
Wed, Jan. 21, 9:09 AM
- The Global Credit Index business - a 12-person unit focused solely on trading credit index products like CDS and ETFs - is the first of its kind at a major investment bank, says JPMorgan (NYSE:JPM). It's been set up in response to a boom in customer demand for trading indexes instead of individual bonds, where liquidity has been drying up.
- Credit ETFs are a $197B market today vs. $58B five years ago, says the bank, and indexes now make up 42% of the CDS market vs. 29% in 2010, according to the Depository Trust and Clearing Corporation.
Tue, Jan. 20, 2:25 AM
- Fidelity Investments and eight other big money managers, including BlackRock (NYSE:BLK), BNY Mellon (NYSE:BK), JPMorgan (NYSE:JPM), and T. Rowe Price (NASDAQ:TROW), are close to launching a dark pool.
- The project is aimed at creating a private trading venue for the benefit of mutual fund shareholders in an effort to reform trading by cutting costs and weeding out high-frequency traders.
- Despite coming under increased regulatory scrutiny, dark pools have recently seen a major jump in trading volume.
- Previously: Nasdaq considers joining the dark side (Jan. 12 2015)
Wed, Jan. 14, 9:20 AM
- Touting the benefits the bank gets from its platform, scale, and franchise, JPMorgan (NYSE:JPM) boss Jamie Dimon scoffs at the idea (thanks to a Goldman report) his bank should be broken up. CFO Marianne Lake earlier: "You don't undertake major surgery when generating strong returns."
- Webcast and presentation
- On the sharp drop in oil prices, Dimon doesn't have too much concern. While certain companies and real estate in oil boom areas will get hurt, the overall effect on the economy will be mixed as falling oil prices puts more money in consumers' pockets. Banks with heavy exposure to energy will take lumps, but JPMorgan has the size and diversity to shrug things off.
- Dimon: I'm surprised when people are surprised by moves in commodity prices. "Commodity prices have been on the move my whole life."
- Previously: Dimon: "Banks are under assault" (Jan. 14)
- Previously: Trading slump, legal charges hit JPMorgan results (Jan. 14)
- Previously: JPMorgan Chase EPS of $1.19 (Jan. 14)
- Shares -3.1% premarket amid a broad slump in equity prices
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