JPM - JPMorgan Chase & Co.

Fed 'prepared to adjust' balance sheet to prevent repo market flare-up

Fed Chairman Jerome Powell said Wednesday that the Fed could "adjust the details" of its balance sheet policies and repo operations to prevent another flare-up in money markets.

China’s Unfazed Yuan Traders Bet Tariffs Won’t Be Hiked

(Bloomberg) -- China yuan traders are undaunted by Sunday’s looming start of fresh U.S. tariffs even as investors elsewhere are piling into protection.As President Donald Trump’s Dec. 15 deadline for more duties on Chinese imports draws closer, one-week risk reversals -- a measure of demand for bearish yuan bets relative to bullish calls in the options market -- have been at their lowest since July. And while volatility gauges for the currency have jumped in the past week, they remain well below levels reached in August, when the yuan weakened through 7 per dollar for the first time since 2008 amid trade worries.An unusual sense of tranquility has descended on China’s financial markets the past month, in part on investors awaiting clearer insight on the state of the U.S.-China trade fight amid a near-daily dose of headlines.While the offshore yuan weakened slightly Wednesday after White House trade adviser Peter Navarro said he has “no indication” whether the looming tariffs will be implemented as scheduled, market sentiment was supported by people familiar with the discussions saying that Chinese officials expect the duties to be delayed.Yuan traders anticipate the same, said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. in Singapore. “Volatility spikes have been nothing out of the ordinary and the spot market is still calm,” he added. “I guess all the headlines about how both sides are really close to a deal have given them some comfort.”Some Chinese banks have chosen to reduce their long and short dollar positions ahead of the tariff deadline, according to three traders. Most firms have reached their year-end performance targets, so there’s no need to take fresh risk at this time, the traders added, asking not to be named as they’re not authorized to speak with the media.Amid the trade uncertainty in recent days, one-week volatility in both the onshore and offshore yuan is back to October levels. But “volatility is rising from a very low place,” said Stephen Innes, chief Asia market strategist at AxiTrader Ltd. “It’s cheap relative to the risks that lie ahead.”Read: JPMorgan’s Dimon Says He Expects U.S.-China Phase-One Trade DealThe yuan has traded in a roughly 1% range the past month, sticking close to the 7 per dollar level. Citigroup Inc. told its clients last week that while it doubted new tariffs will be enacted Dec. 15, the yuan could weaken to 7.2 to 7.35 per dollar in offshore trading if the levies get priced into the market. It’s currently around 7.03.Meanwhile, the volatility spread between the onshore and offshore yuan has widened to the most since October. That’s largely on dwindling mainland trading momentum ahead of year-end, said Frank Zhang, deputy general manager for global markets at Bank of Hangzhou Co.(Adds current level for yuan in eighth paragraph)\--With assistance from Ran Li.To contact Bloomberg News staff for this story: Livia Yap in Shanghai at lyap14@bloomberg.net;Qizi Sun in Beijing at qsun62@bloomberg.netTo contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Kevin Kingsbury, Fran WangFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Wall Street Watchdog Joins Banks in Fretting About Zombie Libor

(Bloomberg) -- “Zombie Libor” and “Libor apocalypse” are probably phrases that send chills down the spines of Wall Street traders. It turns out the terms are also triggering anxiety among swaps regulators.U.S. Commodity Futures Trading Commission Chairman Heath Tarbert said Wednesday that his agency is tracking the threat of the London Interbank Offered Rate not entirely going away when banks are no longer required to provide submissions used to calculate it. That could lead to a situation in which the benchmark still exists, but isn’t a legitimate borrowing rate.“To avoid a potential zombie Libor apocalypse, various proposals are currently being discussed,” Tarbert said in a speech. “We are monitoring these discussions and look forward to responding to any proposals in due course.”Libor is used to set rates on hundreds of trillions of dollars worth of financial products. If every bank stops submitting data at the end of 2021, it will probably die. But many on Wall Street are concerned that the panel of contributors won’t shrink all the way to zero, leaving the index alive but a bad representation of lending rates. That, and the harm it might do to derivatives markets, is what Tarbert is trying to avoid.To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.netTo contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Gregory Mott, Nick BakerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

JPMorgan to revamp wealth management business: WSJ

Bank of Japan Expects Sizable Impact From Abe’s Economic Package

(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Bank of Japan officials see a sizable impact from government stimulus announced last week, raising the likelihood that the bank will upgrade its economic forecasts for the first time in a year next month, according to people familiar with the matter.Japan Leans on Fiscal Stimulus to Keep Recession at BayThe possibility of higher growth projections would likely strengthen a building view among economists that the BOJ will stand pat on key policy measures at its meeting next week and for some time to come, barring unexpected developments in U.S.-China trade talks, markets or economic data.The BOJ doesn’t revise its growth projections until January, when it next issues quarterly forecasts.The package announced last week by Prime Minister Shinzo Abe includes 13.2 trillion yen ($121 billion) of fiscal measures to support an economy facing an export slowdown, typhoon damage and the fallout from a recent sales tax hike. While the economy grew in the first three quarters with the support of domestic demand, it is forecast to shrink 2.6% in the last three months of the year.Officials at the BOJ expect the government’s stimulus to boost growth from the next fiscal year starting in April, the people said. The central bank’s projections are likely to be largely in line with the government’s view, according to some of the people.The government said its fiscal measures will boost growth by 1.4 percentage point over time, but hasn’t made clear the specific impact for the next fiscal year.Economists have cast doubt on the government’s figure for boosting growth, but they largely agree that the package makes it easier for the BOJ to hold off on extra stimulus. Analysts at banks including Barclays Plc and JPMorgan Chase & Co. are telling clients they should no longer expect the BOJ to ease anytime next year.When the Abe administration introduced economic stimulus measures in 2016, the BOJ raised its growth forecast for the following fiscal year to 1.3% from 0.1%.(Adds more comments and details throughout.)To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net;Sumio Ito in Tokyo at sito58@bloomberg.netTo contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Jason Clenfield, Paul JacksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Should iShares Morningstar Large-Cap Value ETF (JKF) Be on Your Investing Radar?

Style Box ETF report for JKF

Morgan Stanley Slashes 2% Jobs Amid Tough Operating Backdrop

Morgan Stanley (MS) is reducing workforce to control expenses as its top line is likely to be under pressure in the coming days.

JPMorgan seeks $1 billion for mezzanine debt fund - Bloomberg

JPMorgan declined to comment. Mezzanine debt, a hybrid of debt and equity financing, gives the lender the right to convert to an equity interest in the company in case of default, after other senior lenders are paid. Often unsecured, it typically demands a much higher yield than senior debt.

Stock Market Live Updates: Wall Street ends choppy week on a high note after 'wild' November jobs report

Headlines moving the stock market in real time.

JPMorgan Seeks $1 Billion for Mezzanine Debt Fund

(Bloomberg) -- JPMorgan Chase & Co. is raising money for a mezzanine fund through its asset- and wealth-management arm, according to people with knowledge of the matter.The firm is looking to raise as much as $1 billion from investors for a fund that would focus on providing financing to companies using a hybrid of equity and debt, said one of the people, who asked not to be identified because the information isn’t public. The bank has already raised a significant portion of its target, one of the people said.The decision caps years of discussion about how to bridge a gap in the asset manager’s alternatives offerings after JPMorgan spun out the credit manager formerly known as Highbridge Principal Strategies in early 2016, leaving it without a mezzanine fund, said one of the people. At the time, JPMorgan considered raising its own fund but shelved the plans because it didn’t want to compete with HPS while it maintained a minority stake in Highbridge’s private-equity business, the person said.A JPMorgan spokeswoman declined to comment.The new fund is part of a strategy to boost the bank’s $150 billion alternatives business as investors increase allocations to private equity, real estate and private credit offerings. Mezzanine funds invest in the riskier portion of the capital structure in exchange for higher returns.Still, fundraising for mezzanine strategies has taken a hit as managers have struggled to put cash to work amid competition from other products like unitranche financing, according to a November report from Ernst & Young.Earlier this year, JPMorgan changed the focus for its $2 billion multistrategy Highbridge fund -- converting it into a credit-only vehicle.Mezzanine financings are typically used in private debt deals to midsize companies that are too small to tap capital markets.\--With assistance from Alan Goldstein.To contact the reporters on this story: Michelle F. Davis in New York at mdavis194@bloomberg.net;Lisa Lee in New York at llee299@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

AutoZone, Oracle, Costco, Adobe Systems and JPMorgan are part of Zacks Earnings Preview

AutoZone, Oracle, Costco, Adobe Systems and JPMorgan are part of Zacks Earnings Preview

Fiverr Languishes Below IPO Price as First Chance to Sell Nears

(Bloomberg) -- Fiverr International Ltd.’s initial zing has almost entirely faded since its June IPO, with the stock falling for six straight days to below its IPO price as insiders’ and early investors’ first chance to sell looms on Tuesday.The biggest stakeholders include Viola Private Equity’s Jonathan Kolber, Deer VII & Co., Accel London III Associates, Square Peg Group, and co-founder and chief executive officer Micha Kaufman, according to data compiled by Bloomberg. But post-IPO stock weakness, with shares off the June high of $44 by more than 52%, make it less likely shareholders will walk away.Fiverr chief Kaufman was unavailable to respond to queries.The operator of an online marketplace for software services had the fourth-best debut of this year’s 239 IPOs, rising a whopping 90% from offer to its first close. That ranks just behind Beyond Meat Inc., Adaptive Biotechnologies Corp., and Cortexyme Inc., each of which has done better hanging on to initial gains. Underwriters on the Fiverr IPO were JPMorgan, Citi, BofA, UBS, Oppenheimer, Needham, and JMP Securities.Analysts appear split, with four buy, three hold and no sell ratings on the stock, according to data compiled by Bloomberg. But with price targets ranging from $22 to $34, they seem to agree that debut highs are unlikely to be seen again anytime soon. To contact the reporter on this story: Crystal Kim in New York at ckim426@bloomberg.netTo contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Scott SchnipperFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

BB&T-SunTrust Merge to Form 6th Biggest Bank Truist Financial

Truist Financial, the sixth largest bank in the country, is likely to give significant competition of other big banks.

What Is Really to Blame for the Repo Market Blowup

(Bloomberg Opinion) -- The Bank for International Settlements — the central bank of central banks — has weighed in with its analysis of what went wrong in mid-September when the U.S. repurchase market all of a sudden dried up (for the first time in a decade). It looks like it has missed the point.While pointing the finger at a raft of different reasons and players, notably hedge funds, BIS doesn’t really answer the salient questions: Why haven’t the elevated funding rates that arose in September gone away and what can be done to prevent something like the original event from happening again?There are obvious quick fixes with which the U.S. Federal Reserve and Treasury have responded swiftly, such as ensuring extra liquidity on tax deadline or auction payment days. But the wider problem is that the post-crisis regulation of banks has become too rigid, and that is going to need addressing at some point.The repo market is the plumbing of the financial system where government securities are lent and borrowed for periods ranging from overnight to several months. This constant access to liquidity greases the wheels of government securities and the wider credit markets. Since the global financial crisis, cash has always been plentiful, so when repo rates all of sudden jumped as high as 10% in September, it was a rude awakening.The Fed has been in full firefighter mode ever since — along with the U.S. Treasury — to try to make sure the spike in rates isn’t repeated over the critical year-end funding period. But short-term liquidity is no substitute for a proper long-term fix. With a Dec. 16 tax payment day looming (a day on which cash is naturally drained from the banking system), and with the repo rate over the year end more than double the Fed rate of 1.5%-1.75%, this is not proving to be a temporary problem.It is in fact a confluence of systemic issues; it’s not just down to the too-swift reduction of the Fed’s bond holdings from the Quantitative Easing programs or a sudden abundance of new Treasury bonds for sale.Similarly trying to blame hedge funds for their arbitraging activities misses the point: This is meant to be the world’s most liquid money market. Extending the overnight secured repo market to longer-term dates could rapidly ease much of this funding bottleneck.The biggest four U.S. lenders own more than 50% of the Treasuries in the banking system but only one-quarter of all cash reserves. They have to hold this level of U.S. government bonds as high-grade collateral to satisfy regulatory requirements, but that restricts how much they offer into the repo market even when rates are temptingly high. This is a phenomenon that Jamie Dimon, JPMorgan Chase & Co’s chief executive officer, has been quick to point out. Another question is why the rest of the U.S. banking system has backed away from the repo market? Again, this is down to regulation and market structure, which has made the repo market a less efficient use of banks’ capital. Regulatory measures put in place by the Dodd-Frank Act need revisiting.To contact the author of this story: Marcus Ashworth at mashworth4@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

Previewing the Q4 2019 Earnings Season

Previewing the Q4 2019 Earnings Season

Chesapeake Jumps 16% on $1.5B Term-Loan Facility Securement

With term-loan proceeds, Chesapeake (CHK) will finance its tender offer for unsecured notes that were issued by its affiliates.

Major Regional Bank Stocks Outlook Rosy on Decent Loan Rise

Major Regional Bank Stocks Outlook Rosy on Decent Loan Rise

Software Developer JFrog Hires Banks for 2020 IPO

(Bloomberg) -- JFrog Inc., a technology company that makes tools for software developers, has hired Morgan Stanley and JPMorgan Chase & Co. to lead its initial public offering next year, according to people familiar with the matter.JFrog could seek a valuation of $2 billion or more in a U.S. listing, said the people, who asked not to be identified because the matter is private.Plans for an IPO aren’t final and JFrog could decide to remain private, the people said.Representatives for JFrog, Morgan Stanley and JPMorgan declined to comment.JFrog was co-founded in 2008 by former Israeli Air Force Major Shlomi Ben Haim, who remains its chief executive officer, according to the company’s website. The Sunnyvale, California-based company raised $165 million in a funding round last year that included investors Insight Venture Partners, Spark Capital, Battery Ventures and Dell Technologies Capital, according to a statement.Software companies have delivered some of this year’s best IPO returns thanks to their steady business models. Globally, shares of companies such as Zoom Video Communications Inc., Crowdstrike Holdings Inc. and Datadog Inc. have risen an average of 38% from their IPO offer prices this year, according to data compiled by Bloomberg.IPOs this year by consumer-facing internet-related companies including Uber Technologies Inc. and Lyft Inc. haven’t fared as well. Shares of those companies have fallen an average of 7.5% from their offer prices, the data show.To contact the reporter on this story: Crystal Tse in New York at ctse44@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.