JPM - JPMorgan Chase & Co.
| Previous close | 95.82 |
| Open | 102.07 |
| Bid | 0.00 x 1200 |
| Ask | 0.00 x 1200 |
| Day's range | 98.80 - 102.58 |
| 52-week range | 76.91 - 141.10 |
| Volume | 38,106,521 |
| Avg. volume | 28,104,456 |
| Market cap | 308.876B |
| Beta (5Y monthly) | 1.18 |
| PE ratio (TTM) | 11.39 |
| EPS (TTM) | 8.90 |
| Earnings date | 14 Jul 2020 |
| Forward dividend & yield | 3.60 (3.76%) |
| Ex-dividend date | 02 Jul 2020 |
| 1y target est | 105.67 |
- Bloomberg
Leveraged Loans Dodge Existential Threat In New York Court
(Bloomberg) -- The $1.2 trillion leveraged loan market’s biggest players can breathe a collective sigh of relief -- at least for now.A New York judge last week dismissed a claim that a leveraged loan JPMorgan Chase & Co. and other Wall Street banks sold in 2014 could be considered a security and, as such, be subject to the same disclosure requirements as stock and bond offerings.The suit was one of the most consequential threats faced by the market for risky corporate loans during its decades-long emergence from an arcane corner of bank lending into a major asset class whose size now rivals junk bonds.The market’s main industry group and some practitioners had warned of dire consequences if loans were to be considered securities, including for collateralized loan obligations, which have become the largest buyers of the debt. They said issuing the debt would become more cumbersome and expensive, potentially depriving borrowers of needed capital.“Declaring syndicated term loans to be securities would have upended the expectations of borrowers and lenders and wreaked havoc in the large, and vitally important, market for those loans,” Elliot Ganz, general counsel for the Loan Syndications and Trading Association, said in a statement on Tuesday.Bond SimilaritiesLoans typically require lighter disclosure than bond offerings and can be arranged more quickly. They have become one of private equity firms’ favorite avenues to finance leveraged buyouts and are widely used by mid-sized companies, often as their only type of borrowing aside from bank debt.The standardization of terms across borrowers, a gradual weakening of investor protections and the growth in secondary trading of loans, however, have increasingly likened the debt to bonds over the past several years.QuickTake: How Leveraged Loans Are (and Aren’t) Like Junk BondsCritics say the loan market has grown riskier amid little oversight. Concerns have centered around the lack of public disclosures on financial information and other material events, which typically can only be accessed by pre-approved lenders. Some worry this information asymmetry makes loans less liquid during sell-offs.In its ruling, the court said that the investors who purchased the loan from JPMorgan and the other banks were sophisticated enough to know the debt would not be covered by securities laws.“It would have been reasonable for these sophisticated institutional buyers to believe that they were lending money, with all of the risks that may entail, and without the disclosure and other protections associated with the issuance of securities,” District Judge Paul G. Gardephe wrote.The suit stems from a $1.8 billion loan that JPMorgan and others arranged for Millennium Health LLC -- then owned by private-equity firm TA Associates -- and sold to investors in 2014. Within a matter of months, lenders saw the value of their loan plunge as the company disclosed that federal authorities were investigating their sales, marketing and billing practices. Millennium Health ultimately filed for bankruptcy.Investors in the loan later claimed through their trustee that the banks had misled them at the time the loan was syndicated by omitting information they had about the investigation. The defendants argued that loans aren’t securities, a loan syndication is not a securities distribution, and asked the court to dismiss the suit.The plaintiffs have the right to appeal the dismissal of the securities claims to the 2nd Circuit Court of Appeals, according to the LSTA.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Zacks
JPMorgan (JPM) CEO Expects Economic Rebound to Start in Q3
JPMorgan (JPM) CEO, Jamie Dimon, is of the opinion that there might be a good chance of a fast economic recovery starting from the third quarter of 2020.
- Investing.com
Stock - Wall Street Opens Higher as Cyclicals' Recovery Gains Strength
By Geoffrey Smith
- Motley Fool
JPMorgan Chase to Again Book Heavy Credit Provisions in Q2
JPMorgan Chase (NYSE: JPM), for one, will see a relatively weak bottom line in the company's current Q2 of fiscal 2020. In an industry conference on Tuesday in New York, in answer to an analyst's question on credit-loss provisioning, the bank's CEO Jamie Dimon said this could easily be "roughly equivalent" to the steeply increased level of Q1. For banks, that quarter was marked by heavier provisioning nearly across the board.
- Yahoo Finance
'This is a kitchen sink quarter': Strategist
On Tuesday the S&P 500 traded above the 3,000 level for most of the session and the Dow crossed 25,000 for the first time since early March. But one strategist warns a pause and digestion in the markets is likely.
- Bloomberg
Bank Stocks Are Either Cheap or Signal More Pain
(Bloomberg Opinion) -- Something strange happened in the U.S. stock market on Tuesday.No, it wasn’t that the S&P 500 crossed 3,000 for the first time in almost three months, generating a yelp of joy from the White House and groans from Wall Street veterans who remain perplexed at the seeming disconnect between financial markets and the American economy.Rather, the most unusual part of the latest rally is that bank shares clearly led the advance. As of last week, Bloomberg’s 18-company S&P 500 Banks Index was down more than 40% in 2020, trailing the broader stock market by an almost unprecedented degree since the coronavirus pandemic shut down the world’s largest economy. However, the index soared 9% on Tuesday, far and away a bigger gain than any of the other 23 industry groups. A simple ratio of this bank index to the broad S&P 500 shows the extent to which financials have been beaten down so far in 2020 relative to other segments of the stock market. The gauge fell on May 13 to a level seen only twice before in data going back three decades, both in March 2009. The banks swiftly rebounded in the following months as the U.S. recession officially drew to a close in June of that year.As investors weigh the drastic gains on Wall Street against the backdrop of widespread unemployment and shuttered small businesses on Main Street, the performance of bank stocks may prove to be a crucial barometer of whether markets can sustain their exuberance. Few analysts dispute that shares of financial companies are cheap on a relative basis — but sometimes prices are depressed for good reasons. Inexpensiveness alone isn’t a compelling enough reason to expect banks to bounce back as they did in 2009. Instead, perhaps more than any other industry, a lasting rally will come down to investors’ conviction in a sharp and sustained economic recovery.Investors have a few obvious reasons to be wary of U.S. banks. For one, long-term interest rates are near record lows while traders have started to wager on negative short-term rates, even as Federal Reserve officials repeatedly question the policy. All this points to lower net interest income, a crucial metric that reflects the spread between what a company earns on its loans and what it pays on its deposits. Meanwhile, large banks have already halted share buybacks, and minutes from April’s Federal Open Market Committee meeting revealed that policy makers are debating whether they should also restrict their ability to pay dividends to shareholders during the pandemic.Whether those downsides merit a $1 trillion wipeout, akin to the 2008 financial crisis, is not so clear cut. As Bloomberg News’s Lu Wang and Felice Maranz reported, at that time the financial industry’s earnings worsened for eight consecutive quarters, but analysts only expect profit declines to last half as long this time around. Banks are broadly considered to be well capitalized — certainly much more than they were 12 years ago when they had to be bailed out by the government. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon expressed confidence in mid-April, when the outlook was even more uncertain than today, that the biggest U.S. bank can handle “really adverse consequences.” He said on Tuesday that the U.S. could see a “fairly rapid recovery.”“The government has been pretty responsive, large companies have the wherewithal, hopefully we’re keeping the small ones alive,” he said at a virtual conference hosted by Deutsche Bank AG.It’s far too soon to declare an “all clear” on the economy, but it’s starting to look as if actions from the Fed and Congress at least helped the U.S. clear the low bar of avoiding the worst-case scenario. The numbers are still awful, especially when it comes to unemployment, but data released Tuesday showed an unexpected increase in new-home sales in April compared with those a month earlier. Broadly, Citigroup Inc.’s economic surprise index is off its lows, indicating that recent figures aren’t quite as bad as analysts expected.“The economic data have been so darn grim lately with job losses in the tens of millions that the green shoots of optimism from better consumer confidence and new home sales are welcome,” Chris Rupkey, chief financial economist at MUFG Union Bank NA, wrote on Tuesday. “We still can’t see a V-shaped recovery, but at least this is looking like the shortest recession in history which will be measured in months not years.”If that’s the case, investors will likely look back on the past few weeks as a time when bank stocks became far too cheap compared with other parts of the market. Yet Tuesday’s seemingly huge rally still leaves financial companies worth far less than before the pandemic, and it seems reasonable to expect they’ll remain that way for a while. After all, it’s anyone’s guess just how many loans will end up going bad and saddle banks with losses. There are far more moving parts to JPMorgan’s bottom line than that of, say, Netflix Inc., which fell 3% on Tuesday, the most in almost a month.It’s never a good idea to read too much into one optimistic trading day, especially coming out of a U.S. holiday weekend in which many Americans probably got a taste of “normal” pre-pandemic activities. But on its face, Tuesday looks as if it could be something of a turning point for bank shares. The follow-through will indicate if they were just too cheap to pass up, or if the economy truly is on the mend.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Yahoo Finance
NYSE president: 'While we are reopening, it is not back to business as usual'
The iconic New York Stock Exchange floor is back open for business. Here is what New York Stock Exchange President Stacey Cunningham told Yahoo Finance.
- Bloomberg
BOE Isn’t Close to Implementing Negative Rates, Haldane Says
(Bloomberg) -- One of the Bank of England’s key policy makers played down the possibility of an imminent cut in interest rates below zero, saying that “reviewing and doing are different things.”Andy Haldane, the BOE’s chief economist who more than a week ago said officials were assessing negative rates, added Tuesday that policy makers weren’t ruling any options out “as a matter of principle.”“Currently we are in the review phase,” he said in an webinar hosted by the Confederation of British Industry Tuesday. His comments prompted traders to push back bets on negative rates to August of next year, compared with December 2020 last week.The scale of the recession triggered by the coronavirus pandemic has fueled a debate about the possibility that the U.K. could be the next advanced economy to introduce negative rates. BOE Governor Andrew Bailey told lawmakers last week that he has changed his view “a bit” on the subject but that the policy had received “pretty mixed reviews” elsewhere.The BOE has already cut its benchmark rate twice this year to 0.1%. Economists say taking it below zero is probably last on its list of preferred measures, with many predicting an increasing in the size of the central bank’s bond-buying program next month.Haldane said that BOE would look at negative rates’ impact on the financial sector, where they would squeeze margins between lending and deposit rates, and how they would affect confidence in the economy.The central bank could opt for a partial response by cutting the borrowing rate paid for by banks for loans taken out under its Term Funding Scheme, according to Allan Monks, an economist at JPMorgan. That could be similar to the ECB’s decision to ease the terms of its bank lending facilities.Still, that probably won’t be the BOE’s next step, he said.“If the BOE were to introduce negative rates following a review, we think it would do it transparently via the policy rate,” Monks said. “It would be simpler to communicate, probably more effective, and would deliver banks with cheaper funding at the same time.”Haldane also said economic output probably won’t bounce back as quickly as it plunged and may not return to pre-virus levels until the end of next year.Prime Minister Boris Johnson said Monday England’s outdoor markets and car showrooms will be able to reopen from June 1. All other non-essential retail outlets will be expected to be able to reopen from June 15 if the government can control the spread of the virus.“There will be, understandably, a period of prolonged caution in spending by both households and companies,” he said. The government should focus on instilling confidence to get people spending, he said, as the U.K. now appears to experiencing the paradox of thrift.Going off of the BOE’s latest projections, jobs might not return to their pre-coronavirus levels until 2022 or the following year, he said. “This is a sort of V, but it’s a fairly lopsided V” with risks to the downside, he said.(Updates to add JPMorgan comments from seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Business Wire
JPMorgan Chase & Co. Declares Quarterly Coupon on Alerian MLP Index ETN
JPMorgan Chase & Co. announced today the quarterly coupon amount for the Alerian MLP Index ETN (NYSE Arca: AMJ). The table below summarizes the coupon amount for the Alerian MLP Index ETN (the "Notes").
- Bloomberg
JPMorgan Says Central Bank Digital FX a Danger to U.S. Power
(Bloomberg) -- As the idea of central bank digital currencies starts to gain traction, the U.S. in particular needs to pay attention or risk losing a major aspect of its geopolitical power, according to JPMorgan Chase & Co.“There is no country with more to lose from the disruptive potential of digital currency than the United States,” analysts including Josh Younger, head of U.S. interest-rate derivatives strategy and Michael Feroli, chief U.S. economist, wrote in a report. “This revolves primarily around U.S. dollar hegemony. Issuing the global reserve currency and the medium of exchange for international trade in commodities, goods, and services conveys immense advantages.”Overall, there’s a reasonable case to be made for central banks to introduce digital currencies, the analysts wrote, though they’re unlikely to have the transformative impact some have hoped.Read more: China’s Central Bank to Run Simulations of Digital Currency UseJPMorgan doesn’t see the greenback being toppled as the world’s reserve currency anytime soon. But the analysts wrote that “more fragile” aspects of dollar dominance, including in trade settlement and the SWIFT messaging system, could be at risk. Even an aligned power like the European Union might want to reduce U.S. sway over global payment systems, the analysts said. They pointed to SWIFT suspending access for some Iranian banks in 2018, which arguably might have been a violation of EU laws.Carney Urges Libra-Like Reserve Currency to End Dollar DominanceIf other countries were able to circumvent the SWIFT system and the dollar’s domination, it would be much more difficult for the U.S. to carry out its goals in sanctions and terrorist-financing enforcement, the report said.“Offering a cross-border payments solution built on top of a digital dollar would, particularly if designed to be minimally disruptive to the structure of the domestic financial system, be a very modest investment to protect a key means to project power in the global economy,” they said. “For high-income countries and the U.S. in particular, digital currency is an exercise in geopolitical risk management.”Chairman Jerome Powell said in February that the Federal Reserve was undertaking broad work looking at the issues with regard to a digital currency, while making no commitments. (Adds deck headlines.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Zacks
Is JPMorgan Diversified Return U.S. Mid Cap Equity ETF (JPME) a Strong ETF Right Now?
Smart Beta ETF report for JPME
- Bloomberg
This Recovery Is Doomed Before It Even Begins
(Bloomberg Opinion) -- The coronavirus recovery is in trouble before it even begins. As swiftly as the lockdowns across Asia were imposed, the process of lifting them will be slow and uneven. That means the region is months, if not years, away from any semblance of normal.Plans for full and partial reopenings in Australia, Singapore and Thailand sound reasonable in theory, but they won’t deliver the hoped-for economic bounce. These countries, deeply reliant on trade and tourism, remain largely closed to the outside world. Domestic consumers, buffeted by layoffs and wage cuts, are in poor shape to pick up the slack. Bankruptcies in Singapore were climbing even before the most stringent virus-suppression efforts. In Australia, social engagements can resume and businesses can open their doors. Yet the country is bereft of foreign tourists, new international students and immigrants — and it was workers from abroad who helped drive the 28-year boom that preceded the pandemic. The lockdown has essentially set Australia back four decades, just before Paul Hogan starred in the “Crocodile Dundee” movies, as Bloomberg News's Michael Heath wrote. That era saw a boost in tourism and freer capital markets, with moves to float the local dollar and lower tariffs.Politicians say raising the drawbridge isn't a big deal; domestic spending can make up the difference. Aussies will vacation closer to home. You can simply luxuriate in tropical Queensland resorts instead of the Maldives. But this is a big country with relatively expensive domestic air travel (one of two major carriers just collapsed amid the shutdown). With the jobless rate likely to climb to 10% soon, according to the central bank, any splurge seems frivolous. You can't just plug a labor market back in after cutting the cord.In Singapore, core economic sectors — tourism, lodging and conventions — will be among the last to restart. The government unveiled Tuesday a phased reopening after two months of lockdown. From June 2, schools will gradually welcome back students, limited family visits can occur and many businesses that don't interact with the public can resume. Large corporate gatherings, as well as sporting and cultural events, are on hold. Some activities will be shelved until a vaccine is found, or Covid-19 is no longer deemed a risk.Officials in the city-state say they are prioritizing safety and want to avoid a second wave that will further retard the recovery. While the concern is entirely justified, it comes at a cost: Singapore attracted 19.1 million visitors last year, more than three times its population. Tourism makes up about 4% of GDP, and supports a substantial hotel industry and retail scene. Yet Singapore Airlines Ltd.’s fleet remains mothballed. All this adds up to a grim economic outlook: Gross domestic product will shrink 8.5% this year, Citigroup Inc. predicted.The state of the travel industry makes optimism about Thailand’s prospects all the more puzzling. Wagers on an appreciation of its currency, the baht, appear anchored in the idea of tourists returning. With most borders shut and big economies plagued by historic levels of unemployment, where are these visitors going to come from?While caution is understandable, these awakenings don’t inspire confidence in a long and robust recovery. Global GDP will jump an annualized 37% in July to September after diving in the current quarter, says JPMorgan Chase & Co. Economies are nevertheless unlikely to regain their pre-Covid form anytime soon, and even less likely to do so uniformly. “Along with variation in the peak of containment polices, there has been equally large variation in the degree to which countries are now reversing these measures,” Joseph Lupton, the bank’s global economist in New York, wrote this week. In an effort to crank up the flow of people, countries are exploring green lanes that would prioritize visitors from nations seen to have had success tamping down the virus. That sets a low bar, and would be a step toward restoring tourism and business travel. But it’s a far cry from status-quo ante. Much of Asia rose from agricultural backwaters to urbanized hubs for manufacturing and services because they embraced globalization. An Asia disconnected from the world would be a major step back. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
Traders Beware: U.S. taps new tools to find fraud in volatile commodities market
When the U.S. Department of Justice charged a handful of JP Morgan Chase & Co traders in 2018 and 2019 with alleged commodities futures manipulation, it wasn't the first time the government had probed the bank's metals trading activities. The Commodity Futures Trading Commission (CFTC) investigated the same business as part of a similar probe of the silver market years earlier, but it was not able to build a case with the data it had at the time, according to U.S. court filings and a person with knowledge of the aborted probe. Since then, leaps in the agencies' data analysis capabilities have enabled them to detect and prosecute increasingly sophisticated forms of manipulation in the commodities futures markets which for decades have gone under-surveilled, according to ten officials and industry experts.
- Reuters
JPMorgan to use common desks to make offices easier to clean after pandemic
When JPMorgan Chase & Co staff return to offices in regions slowly re-opening from the coronavirus lockdown, some may be required to sit at common desks, or "hot desks," a temporary seating arrangement that management hopes will make it easier to clean, according to a memo seen by Reuters. The memo, sent on Wednesday to staff in Europe, the Middle East and Africa, said the bank has no timeline for returning staff to offices, but that it is working on a plan that will limit the number of staff in buildings to about 50% at any one time. A JPMorgan spokesman verified the contents of the memo.
- Bloomberg
Biggest Power Demand Plunge Since Great Depression Is Reshaping Markets
(Bloomberg) -- The global plunge in electricity demand will drag on long after nations lift stay-at-home orders, leading to the biggest annual drop since the Great Depression and fundamentally reshaping power markets.As economies struggle to recover, worldwide electricity consumption will decline 5% in 2020, the most in more than eight decades, according to the International Energy Agency. In the U.S. last week, government analysts projected the nation’s biggest drop on record. And in Europe, analysts say a full recovery could take years.The prolonged slowdown will increase economic pressure on older, uneconomic power plants -- especially those that burn coal -- and help speed the transition toward cleaner and cheaper wind and solar. It will also contribute to the biggest annual decline in greenhouse gasses from energy ever recorded.“This unprecedented drop in demand is foreshadowing the grid of the future,” said Steve Cicala, an economics professor at the University of Chicago. The world is “getting an early look at what high penetrations of renewables will do.”Part of the reason electricity consumption will not immediately bounce back when lockdowns end is that power demand largely mirrors economic activity. So generating plants won’t need to run at full tilt again until employment completely rebounds and factories operate at the same rate as before the virus.Even then, some sectors could lag for years. Demand from office buildings, for example, could be permanently depressed as companies allow people to continue working from home. Already, Twitter has told workers they can telecommute indefinitely, and JPMorgan Chase & Co. expects to keep its offices just half full for the “foreseeable future,” according to an internal memo seen by Bloomberg.Read More: JPMorgan Expects to Keep Offices Half Full After Lockdown EndsLower demand is pitting generators against each other in a fight to produce the cheapest power possible. Wind and solar farms have an upper hand in many regions because they don’t need to buy fuel. Natural gas, which is trading near historic lows, remains competitive. Coal power, which is more expensive, is shouldering the majority of the cuts as generators scale back.“Renewables will be the biggest beneficiaries,” said Joshua Rhodes, a research fellow at the University of Texas at Austin Energy Institute.As coal and oil use ebb, energy emissions are set to drop by a record 8% this year, according to the IEA. While wind and solar are producing a larger share of power, they’re not unscathed. Power auctions are being suspended in France, Brazil, Saudi Arabia and elsewhere, sapping the need for additional clean-energy projects. For the first time in two decades, the number of new wind and solar farms globally is set to decline this year, the IEA said in a report Wednesday.Read More: Renewable Power Heads for Its First Decline in Two DecadesSome of the steepest drops in electricity consumption will be in Europe, where 2020 demand is forecast to fall 8%, according to the IEA. In Germany, companies including RWE AG and Uniper SE are running coal generators less and relying more on gas plants. Electricite de France SA warned low demand will mean output from its nuclear reactors will fall by more than a fifth this year.A similar dynamic is playing out in the U.S. retail power sales across the 50 states will sink 4.5% this year, the most since the U.S. Energy Information Administration began keeping records in 1949. Coal is on pace for the first time ever to produce less electricity nationwide than renewable energy. In Asia, power consumption is forecast to rebound faster. Nations where industrial production accounts for a large chunk of the economy, such as China and India, also had some of the strictest lockdowns -- a combination that hammered demand, according to BloombergNEF analyst Ali Asghar. While the IEA sees demand in China, the world’s top energy user, falling this year, official estimates put consumption in May already above last year’s levels and on course to grow as much as 3% in 2020.Eventually, global demand for power will resume growing as nations turn more to electricity to power cars, heat homes and more, analysts said. But for now, the power sector faces a long, slow recovery.“I don’t think we are going to turn everything on tomorrow,” Melissa Lott, a senior research scholar at Columbia University’s Center on Global Energy Policy. “I don’t see how that happens.”Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News, has committed $500 million to launch Beyond Carbon, a campaign aimed at closing the remaining coal-powered plants in the U.S. by 2030 and slowing the construction of new gas plants.(Adds context in the fifth and sixth paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Humans Top Bots in Covid Crisis Electronic Bond Trading Test
(Bloomberg) -- It turns out the corporate bond market still needs traders.The algorithms that dealers use to buy and sell bonds with their customers failed in March at the height of extreme volatility from the coronavirus pandemic, according to investors and price data. The nimble analysis of flesh-and-blood traders was suddenly needed to price bonds, edging out machines that normally can trade large portions of the market without any human input.The bond market has been one of the last corners of finance to move into the digital age, slowly modernizing from the rise of electronic trading to new venues that will remove much of the interpersonal communication from the process of selling company debt. Yet even as digital platforms set record volumes in the first quarter, market watchers said the bots failed a test when Treasuries and credit spreads were so disorderly.“Good old-fashioned blocking and tackling is still very much a part of the business,”said Chris Coccoluto, head of investment-grade bond trading at Manulife Investment Management. “It was almost nice to see in a way you had to rely on your relationships.”The virus-related disruptions were profound. At the height of the volatility, Treasuries rallied to record low yields and corporate bond spreads gapped out to levels last seen in 2009. The securities are linked as the vast majority of investment-grade bonds trade at a premium to Treasuries, adding an extra layer of complexity when neither market was fully functional.While humans were able to spot the new patterns quickly, the bots couldn’t adapt because algorithms are built on historical data, said Chris White, founder of advisory firm ViableMkts LLC.“This is a reminder to a lot of people who may have been vilifying human interaction in the bond-buying process,” said White, a former fixed-income executive at Goldman Sachs Group Inc. “When things get really volatile, people become extremely valuable to the process.”Cutting RiskFor decades, banks have stepped back when prices are unpredictable and buying too much from a customer could trigger multimillion-dollar losses in just days. At the end of March, dealers cut risk-taking mainly by shutting off algorithms that were spitting out incorrect prices left and right.With Wall Street pulling back, asset managers stepped up to fill the void, according to MarketAxess Holdings Inc. data. Voice trades -- in which counterparties agree to a price over the phone, but process and hedge digitally -- rose to a record, according to Tradeweb Markets Inc.Roughly 70% of the investment-grade corporate bond market still trades with some element of human interaction, especially larger transactions over $2 million. The record credit trading volumes handled on MarketAxess, Tradeweb and Trumid Financial LLC show how traders took advantage of platforms to execute smaller, simpler transactions electronically, which in turn allowed them to focus their attention on more difficult deals that require complex analysis, said Chris Bruner, head of U.S. credit at Tradeweb.“Taking out any of the steps of manual work flow was really important in March so people could focus on risk,” Bruner said. “They were less worried about exact price, and more worried about moving an entire risk profile.”Bloomberg LP, the parent company of Bloomberg News, competes with Tradeweb, MarketAxess and Trumid in providing fixed-income trading services.Market turmoil also led to record volumes in portfolio trading, a relatively new practice that can price and sell a bundle of hundreds of bonds in minutes. Barely a concept three years ago, it is now a fast-growing part of the market. New data-analysis tools that allow prices to be fully automated are part of the reason that traders have seen their ranks greatly thinned in recent years.The events of this year may end up making bots better. JPMorgan Chase & Co. found that algorithms can in fact learn from humans in tempestuous markets. An algorithm it trained to recommend trades based on human market commentary significantly outperformed those based on only market observable features in March, strategists led by Joshua Younger said in a report dated April 23.The pace of tech innovation and disruption won’t be slowed by the events of March -- in fact, it will continue to gain speed, said James Switzer, global head of fixed-income trading at AllianceBernstein Holding LP. In March and April, his firm boosted by 500% its usage of MarketAxess’s all-to-all protocol, which allows for anonymous trading and can match investors with each other, as well as banks, on the other side of a transaction.“That’s what’s going to come out of this, a desire by the buy side to embrace all-to-all trading because we can’t always depend on dealer balance sheets,” Switzer said. “If we have to find the other side of the trade in an anonymous all-to-all fashion, we’ll do it.”Electronic powerhouses like AllianceBernstein and BlackRock Inc. have forged ahead to embrace technology. While both value having traders with market experience, they’ve also expanded recruiting criteria to include coding skills.Others like Mike Nappi, head of investment-grade credit trading at Eaton Vance, still like the old school way of getting the job done.“We don’t have a fully automated trading desk for a reason -- I want our traders to have a sense of what’s going on in the market,” Nappi said. “We’ll never live long enough to see who the winner is. But through our careers, there are going to be humans needed, just maybe not as many.”(Updates with JPMorgan report in 14th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
‘Money Explosion’ Drives Dick Bove to Upgrade JPMorgan to Buy
(Bloomberg) -- Odeon Capital’s Dick Bove upgraded JPMorgan Chase & Co. to buy from hold, citing a “money explosion” in the past few months thanks to aggressive moves by the U.S. Federal Reserve and the government, including new loan programs and the $2.2 trillion pandemic relief law called the Cares Act.Those steps have led to an “incredible amount of money around,” with “money-making opportunities for bankers,” Bove wrote in a note Wednesday. That contrasts with the likelihood of rising loan losses, capital issues and potential dividend cuts across banks, and makes JPMorgan an attractive investment, he said.Bove also flagged the bank’s “startlingly strong” operating numbers in the past 60 days, with deposits data at the end of the first quarter indicating JPMorgan has 11% of the nation’s money supply deposited in its bank, while loans industrywide grew by $825 billion, or 8.2%, with about 89.7% of the new loans in the commercial and industrial sector, he said.“The vast majority of the other banks in the country lack JPMorgan’s strengths and diversity and we remain cautious concerning their results,” Bove added.JPMorgan rose as much as 4.2% Wednesday in New York. Other big banks climbed as well, with Bank of America Corp. advancing as much as 3.5% and Citigroup Inc. as much as 4.2%. Stocks gained across the board as investors keyed in on signals the American economy will continue to reopen and retail earnings showed signs of resiliency.JPMorgan and other banks have underperformed the broader market since Feb. 20, when concern about Covid-19 began accelerating. JPMorgan has tumbled 33% since then, versus a 12% decline for the S&P 500.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Motley Fool
Got $4,000? Then Invest It in These Cheap Dow Stocks
The Dow Jones Industrial Average may be a stodgy index, but it's home to a number of attractively valued companies.
- Bloomberg
U.S. Cases Rise 1.6%; N.Y. Allows Hospital Visits: Virus Update
(Bloomberg) -- President Donald Trump called the country’s 1.5 million cases a “badge of honor” for U.S. testing efforts. New York City is struggling to meet the standards to reopen and still seeing rising hospital admissions, while Governor Andrew Cuomo hailed progress in the state capital region and Long Island.The European Union criticized Trump’s threat to permanently freeze U.S. funding to the World Health Organization, saying the virus fight requires global cooperation. Republicans are pushing for WHO Director-General Tedros Adhanom Ghebreyesus and Cui Tiankai, China’s ambassador to the U.S., to testify before the House virus oversight subcommittee. China may look to target exports from Australia over its calls for a probe into the origin of Covid-19.Brazil is now the world’s fastest-growing virus hot spot, accounting for 13% of new cases globally in the past week, while infections in India rose at the fastest pace in Asia to top 100,000. Russia’s prime minister returned to office three weeks after testing positive -- a period that saw total cases in the country almost triple to just under 300,000.Key Developments:Virus Tracker: Cases top 4.8 million; deaths exceed 322,000U.S. airlines see signs of life after April travel collapseHK unemployment rate soars; jobless claims rise in BritainCovid patients testing positive after recovery aren’t infectiousModerna to raise as much as $1.3 billion to fund vaccineCrisis brings gaming boom, adding billions to makers’ wealthSubscribe to a daily update on the virus from Bloomberg’s Prognosis team here. Click VRUS on the terminal for news and data on the coronavirus. See this week’s top stories from QuickTake here.South Korean Schools Start Reopening (6:33 a.m. HK)After an unprecedented five-month break, South Korean students are returning to their classrooms as government health officials declared that the country may have avoided a “second wave” of infections.The schools are reopening in stages, with high school seniors returning first on Wednesday and middle and elementary students slated to go back to school in the following weeks. The third-year high school students are leading the return as they now only have half a year before their annual university entrance exams in early December, education officials said.UV-Light Used to Kill Virus on N.Y. Transit (5:50 p.m. NY)New York’s Metropolitan Transportation Authority will use ultraviolet light to help remove Covid-19 from its subways, buses and commuter trains as the technology has shown to eradicate the virus from surfaces. Ridership has fallen dramatically as people work from home and avoid using public transportation. To bring riders back, the agency plans to use innovative disinfecting regimes to help sanitize its fleets and restore ridership confidence.The MTA will spend about $1 million for 150 double-headed lamps and begin next week zapping the interior of subway cars in the yard. While such technology has been used to clean hospitals and urgent-care facilities, agency officials say it’s the first time ultra-violet light is being used to kill the cornavirus on public transit infrastructure.Ohio Lifts Social-Distancing Order (4:45 p.m. NY)Ohio Governor Mike DeWine — praised nationally for his early and stringent social-distancing rules during the coronavirus pandemic — is lifting the rules he imposed on the public.“Unnecessary” travel, six feet of distancing, and other mandates are all now “strong recommendations,” he said during a Tuesday news conference in Columbus. Orders regarding social distancing in businesses and restaurants will still apply, as well as a ban on “mass gatherings,” which DeWine, a Republican, declined to define. The state’s economy is 95% re-opened.U.S. Cases Rise 1.6% (4 p.m. NY)U.S. cases rose 1.6% from the day before to 1.52 million, according to data compiled by Johns Hopkins University and Bloomberg News. That was higher than Monday’s growth rate of 1.2%, but in line with the average daily increase of 1.6% over the past week. Deaths rose 1.5% to 91,179.New York cases rose by 1,474 to 352,845, the second day in a row that new cases totaled less than 1,500, according to the state’s health department.Florida’s caseload grew by 1.1% to 46,944, according to the state’s health department. Deaths climbed 2.8% to 2,052.New Jersey cases increased 0.7%, or by 1,055, to 149,013, a pace that matched the prior seven-day average, according to Governor Phil Murphy.California cases rose 1.7%, below the average 2.37% increase over the previous seven days, to a total of 81,795. There were 32 new deaths, the fewest in more than a week.Moderna Falls on Stat Report (3:43 p.m. NY)Moderna Inc. fell as much as 12% after trade publication Stat reported the company withheld key information about its coronavirus vaccine.Stat cited the lack of a press release from the National Institute for Allergy and Infectious Diseases, its partner on the vaccine, and said Moderna didn’t release information necessary to interpret its data. Stocks surged Monday after Moderna releases positive early results of its vaccine trials.Dutch Restaurants to Reopen (2:37 p.m. NY)The Dutch government confirmed that bars and restaurants can start opening for business again next month as the country slowly lifts more restrictions to aid an economy hurting from the coronavirus outbreak.Bars and restaurants are allowed to reopen beginning at noon on June 1 for up to 30 guests excluding staff as long as they adhere to the 1.5 meter (5-foot) distance rule, Prime Minister Mark Rutte said during a press briefing in The Hague on Tuesday.Cuomo Lets Albany Region Reopen (1:09 p.m. NY)New York Governor Andrew Cuomo said the Albany area is ready to begin reopening, and Long Island is making “great progress” toward ending its lockdown, as statewide hospitalizations, intubations and new admissions and deaths for Covid-19 continue to decline. The Capital Region is the seventh of 10 regions that have met the required metrics, Cuomo said Tuesday at a press briefing. Along with Long Island, New York City and the Mid-Hudson region remain on lockdown.Nassau County on Long Island is now eligible for elective surgery and ambulatory care, Cuomo said. Statewide, 16 hospitals, including some in New York City, are beginning a two-week pilot program to allow increased visitations for family members and loved ones. Visitors are time-limited, must wear personal-protective equipment and agree to symptom and temperature checks.Ireland’s Cases Are Lowest Since March (1:09 p.m. NY)Ireland reported its lowest number of new coronavirus cases since March 15, as the country eases its restrictions to control the virus. There were 51 newly diagnosed cases, chief medical officer Tony Holohan said Tuesday. That’s the fourth day in a row fewer than 100 cases have been reported. There were 10 more deaths reported. Ireland now has 24,251 cases, with 1,561 dead.U.S.-Canada Extend Border Closure (12:40 p.m. NY)The U.S. and Canada will keep their border shut to non-essential travel for another month as efforts to prevent the spread of Covid-19 are extended.Canadian Prime Minister Justin Trudeau and President Donald Trump announced the extension of the border closure to June 21 at separate events in Ottawa and Washington. The agreement to restrict travel between the two countries, which has been in place since March 21, was due to expire this week.Greece to Lift Island Travel Ban (11:49 a.m NY)Greece will lift the ban on travel to its islands for non-residents starting May 25, Deputy Citizen Protection Ministry Nikos Hardalias said Tuesday.The country had already allowed travel to the large islands of Crete and Evvia from Monday. The country is also extending to May 31 the requirement for a two-week quarantine for all visitors arriving in Greece, the minister said.Florida Reopening Expands (11:12 a.m. NY)Florida expanded its reopening Monday, allowing restaurants and retailers to operate at 50% capacity and permitting the most populous two counties -- Miami-Dade and Broward -- to emerge from their lockdowns.Kudlow: Nobody Can Confidently Invest in China (9:52 a.m. NY)Trump’s economic adviser, Larry Kudlow, said nobody can invest confidently in Chinese companies and that the U.S. needs to protect investors from the country’s lack of transparency and accountability.Speaking on the Fox Business Network on Tuesday, Kudlow pointed to potential lawsuits related to the coronavirus, saying “until that stuff is sorted out, nobody really can invest with confidence in China.”The Trump administration is increasingly blaming China for the pandemic, while his critics accuse the president of trying to deflect attention from the U.S.’s handling of the outbreak.EU Cheers WHO’s Approval of Resolution (9:06 a.m. NY)The European Union hailed the World Health Assembly’s approval of an EU-sponsored resolution on the virus, saying the move highlights the importance of a “collective response” to the pandemic and criticized Trump’s threat to permanently cut U.S. funding for the WHO.“Strengthening multilateralism is now more important than ever,” EU foreign-policy chief Josep Borrell and Health Commissioner Stella Kyriakides said in a statement after the endorsement by the governing body of the WHO. “The role of equitable access to a vaccine in bringing the pandemic to an end is crucial.”Separately, the U.K.’s Lancet medical journal said Trump’s claim that the WHO ignored reports of a new virus spreading last year -- including an article in the Lancet -- is wrong and “damaging.”“The Lancet published no report in December, 2019, referring to a virus or outbreak in Wuhan or anywhere else in China,” the journal said in an emailed statement. “It is essential that any review of the global response is based on a factually accurate account of what took place.”Southwest Sees Signs of Life in Bookings (8:50 a.m. NY)Southwest Airlines Co. joined other U.S. carriers noting nascent signs of revival, saying that bookings in May are outpacing cancellations for the first time since March and that travel reservations for next month are showing “modest improvement.”U.S. Housing Starts Slump by Most on Record (8:34 a.m. NY)U.S. home construction starts plunged in April by the most in records back to 1959, as the nationwide lockdown hammered the housing market and broader economy.Residential starts plummeted 30.2% to an 891,000 from a month earlier, the lowest level since February 2015, according to a government report released Tuesday. The median forecast in a Bloomberg survey called for a 900,000 pace. Applications to build, a proxy for future construction, dropped 20.8%, the most since July 2008, to a five-year low.Singapore to Reopen More Businesses (8 a.m. NY)Singapore will allow more businesses to reopen on June 2 -- increasing the active proportion of the economy to three-quarters. Restrictions will be introduced in three phases provided “community” infection rates remain low during the current lockdown ending June 1 and health workers are protected, officials said at a press briefing Tuesday.The government will extend more support to businesses and their workers, with a priority on companies that remain closed on June 1, National Development Minister Lawrence Wong said. Deputy Prime Minister Heng Swee Keat is expected to announce details of a fourth stimulus package next Tuesday in parliament.EasyJet Says Hackers Accessed Data of 9 Million (7:50 a.m. NY)EasyJet Plc. said email addresses and travel data of about 9 million customers had been accessed in a “highly sophisticated” cyberattack. Credit card details for 2,208 customers had also been accessed, EasyJet said Tuesday in a statement. It said it’s closed off the unauthorized access and will contact customers over the next few days.Cyberattacks against businesses and their employees have surged this year as hackers take advantage of the disruption caused by the pandemic.Contested Jerusalem Holy Site to Reopen (7:40 a.m. NY)A contested Jerusalem site, holy to both Jews and Muslims, will reopen next week after being closed for almost two months. The Waqf, an Islamic trust that administers the site, said it will open the Al-Aqsa compound immediately after Eid al-Fitr, the holiday that marks the end of Ramadan. There are 16,650 confirmed cases of coronavirus in Israel.Separately, the Health Ministry said it will let wedding halls and other event venues reopen beginning June 14 under certain restrictions. The ministry also temporarily lifted a requirement to wear masks in public areas amid a heat wave, and schoolchildren were given a temporary reprieve from wearing them in classrooms.Chinese Tycoon Expects Vaccine Trials at Home Soon (7:10 a.m. NY)Guo Guangchang, the billionaire founder of Fosun Group, expects to soon win approvals for testing a vaccine against the new coronavirus in his home country China. In March, Guo’s Shanghai Fosun Pharmaceutical Group Co. teamed up with German partner BioNTech SE, which has already been conducting human clinical trials of the vaccine in Germany. Early-stage results should be available soon, the tycoon said.Guo declined to elaborate on when Fosun Pharmaceutical will obtain all the required approvals. The group has also been working with overseas partners in trying to find an effective medicine against the virus, but so far it hasn’t found any, he said.Walmart Sales Soar on Stockpiling (7:08 a.m. NY)Walmart Inc. posted strong quarterly sales fueled by coronavirus-related stockpiling, showing how it’s one of the few retailers that’s thriving even amid the unprecedented carnage in the U.S. retail sector. Comparable-store sales, a key retail metric, increased 10% for U.S. Walmart stores in the period, compared with the 8.6% estimate compiled by Consensus Metrix. That’s the fastest pace of growth in almost two decades. Profit in the quarter also beat expectations.The “significant uncertainty” surrounding the length and intensity of the coronavirus’s impact prompted the retailer to withdraw its full-year guidance, given just three months ago. Still, Walmart said its “business fundamentals are strong.”Earlier, Home Depot also suspended its full-year forecast citing uncertainty related to the duration of COVID-19 and its impact on the broader economy, while Kohl’s suspended its dividend and stock buyback.Dimon Says Pandemic Is a Wake-Up Call (6 a.m. NY)Jamie Dimon said he hopes policy makers use the Covid-19 crisis as a catalyst to rebuild a more-inclusive economy as the pandemic exposes stark inequalities among Americans.“This crisis must serve as a wake-up call and a call to action for business and government to think, act and invest for the common good and confront the structural obstacles that have inhibited inclusive economic growth for years,” the chief executive officer of JPMorgan Chase & Co. wrote in a memo to employees ahead of the bank’s annual shareholder meeting Tuesday.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Bloomberg
Abu Dhabi Offers More Bonds to Stockpile Cash
(Bloomberg) -- Abu Dhabi raised more money from international debt markets just weeks after a $7 billion bond sale as it takes advantage of a drop in borrowing costs to bolster its finances.The emirate sold an additional $3 billion of its three-tranche deal priced in April, according to people familiar with the matter who asked not to be identified because the matter is private. The yields on those bonds, which garnered about $45 billion in orders last month, declined on Monday to all-time lows as optimism that the worst of the oil crisis triggered by the coronavirus pandemic is over offered relief for energy-related borrowers.“For Abu Dhabi, pricing was never an issue, they are a solid credit with good sponsorship,” said Angad Rajpal, the head of fixed income at Emirates NBD Asset Management in Dubai. “It is a smart call to tap and further shore up their buffers than to draw down on the reserves.”Pricing results:135 basis points over U.S. Treasuries of similar maturity for $1 billion of debt due April 2025A spread of 150 basis points for $1 billion of bonds due April 2030For the 30-year bond tap, 3.25%Abu Dhabi, the wealthiest of the seven emirates that make up the United Arab Emirates, is rated AA by S&P Global Ratings. The cost of insuring Abu Dhabi’s debt against default for five years has fallen to about 100 basis points, from a more than 10-year high of 162 basis points in March, when crude prices collapsed.The slump in oil has put a strain on the finances of Middle Eastern energy producers, prompting Saudi Arabia, Qatar, members of the UAE and Bahrain to sell about $31 billion of bonds this year. Abu Dhabi’s Mubadala Investment Co. raised $4 billion last week.Brent crude has lost almost half its value this year, even after recovering to around $35 a barrel from an 18-year low reached last month.The need for large stimulus around the world has prompted other countries to issue more debt as well. Indonesia, Spain and Italy are among nations that have recently offered notes, as massive central bank stimulus helps global credit markets rebound from a March rout.The gradual easing of lockdowns in some economies around the world, together with additional stimulus from governments and central banks, is also buoying investor sentiment, even as many uncertainties remain about the virus and global economy.BNP Paribas SA, First Abu Dhabi Bank PJSC, JPMorgan Chase & Co. and Standard Chartered Plc are the joint lead managers for the Abu Dhabi sale.(Updates with pricing throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
- Reuters
JPMorgan directors reelected, former Exxon exec overcomes opposition
JPMorgan Chase & Co shareholders voted to reelect all of the bank's board members on Tuesday, including a former Exxon Mobil Corp CEO who drew criticism from environmental groups and New York City's comptroller and pension system leader. In April, JPMorgan said it will name a new independent director to replace former Exxon CEO Lee Raymond, 81, "by end of summer 2020." The vote showed investors were willing to go along with JPMorgan Chief Executive Officer Jamie Dimon's assertions that the bank can support green initiatives, while continuing financing deals with some fossil fuel companies.
- Bloomberg
Pandemic Seems to Last Forever. So Did Earnings Calls.
(Bloomberg Opinion) -- With the coronavirus pandemic turning the world’s economy upside down, analysts and investors have a lot of questions, and companies are doing their best to answer them. So if it feels like earnings calls were extra long these past few weeks, that’s because they were. Among the 29 members of the Dow Jones Industrial Average who normally have earnings calls and have held one since the beginning of March, 22 companies ran longer than usual by an average of about 10 minutes.Johnson & Johnson executives were the most verbose, with the company’s April 14 earnings call stretching about 1 hour and 43 minutes. That was nearly 26 minutes longer than the average of Johnson & Johnson’s previous four earnings calls. Even Walmart Inc., which doesn’t consistently hold public earnings calls, held an hour-long one on Tuesday to discuss first-quarter results. Analysts are generally grateful to have the extra information, but they, too, are noticing the longer calls. “Sorry, I was just fixing myself some dinner,” joked JPMorgan Chase & Co. analyst Steve Tusa in the middle of Emerson Electric Co.’s April 21 earnings call, which took place in the morning but stretched on a bit. “This is a pretty comprehensive conference call you’re having here.” Emerson, which isn’t a member of the Dow, included presentations by its major business heads as well as the CEO, CFO and company president. All told, the call lasted more than 2 hours, about 45 minutes longer than the recent average. It’s probably wise to stockpile snacks ahead of the next round of calls in July. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.Elaine He is Bloomberg Opinion's data visualization columnist in Europe, focusing on business and markets coverage. Before joining Bloomberg, she was a graphics editor at the Wall Street Journal and the New York Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
