JP Morgan Fed by the Fed 🏦

by 15 Jul, 2020

JP Morgan Fed by the Fed

JP Morgan does stocks and bonds, but its fixed-income traders made $7.3 billion last quarter – a figure so high that even if its stock traders made zip, the bank would still have eclipsed its all-time record for live-action trading revenue. JP Morgan is up 10% already this week!

The awesome earnings report perplexed some investors. JPM’s bond traders did great despite zero interest rates and a migration out of bonds into stocks, but we have to remember that the Federal Reserve is in the market for distressed debt to suck that risk out of our financial system. 

It almost guarantees a higher bid than whatever JP Morgan’s asking price is for a junk bond (business on a silver platter!).

The banks do best when consumers invest and consume more, adding to the number of loans that need issuing. JP Morgan has the whole financials sector beat under CEO. Jamie Dimon, during an era that on paper, shouldn’t be lucrative at all. We’re still in a technical recession!

It’s all about Q3 and Q4 now. JP’s $10.5 billion loan-loss provision points to low expectations in the near-term, but would you bet against the number one bank? 

Its competitors include Morgan Stanley, Goldman Sachs, Wells Fargo (which report yesterday as well but missed), and Bank of America, all battling it out for Wall Street dominance. Their second-quarter numbers get revealed tomorrow. Quick draw!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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