Wed, 23rd August 2017

Anirudh Sethi Report


Archives of “jpmorgan chase” Tag

JPM Develops A.I. Robot To Execute High Speed Trades, Put Humans Out Of Work

With high-margin FICC revenues stuck in a secular decline across the financial industry, banks are forced to extract as much profit as possible from existing product lines. Which explains why JPMorgan will soon be using a “first-of-its-kind robot” to do away with carbon-based traders altogether and execute trades across its global equities algorithms business using a “robot”, after a recent trial of JPM’s new artificial intelligence (AI) program showed it was “much more efficient than traditional methods of buying and selling“, the FT reports.

JPMorgan, the world’s biggest bank by revenue, believes it is the first on Wall Street to use AI with trade execution and said it would take rivals 18 to 24 months and an investment of “multiple millions” to come up with similar technology.

 The AI — known internally as LOXM — has been used in the bank’s European equities algorithms business since the first quarter and will be launched across Asia and the US in the fourth quarter, Daniel Ciment, JPMorgan’s head of global equities electronic trading, told the Financial Times.

In the latest victory for robot kind over humans, LOXM’s job will be to execute client orders with maximum speed at the best price, “using lessons it has learnt from billions of past trades — both real and simulated — to tackle problems such as how best to offload big equity stakes without moving market prices.”

Overnight US Market :Dow closes back above 20,000, Nasdaq hits record

Banks and other financial companies led stocks higher on Wall Street Friday as President Trump prepares to scale back financial industry regulations. Buyers were also encouraged by a pickup in hiring in January. Small-company stocks, which stand to benefit more than others from stronger economic growth, make sharp gains.

The Dow Jones industrial average jumped back above the 20,000 level as the blue-chip index rose 186.55 points, or 0.9%, to close at 20,071.46. The Standard & Poor’s 500 index gained 16.57, or 0.7%, to 2297.43, moving within one point of its record closing high of 2298.37. The Nasdaq composite index added 30.57, or 0.5%, to set a new record closing high of 5666.77.

The Russell 2000 index of smaller-company stocks climbed 1.5% to 1,377.84. Smaller, domestically-focused companies may have more to gain than their larger peers from faster growth in the U.S. The Russell made large gains at the end of 2016 based on those hopes.

The stock market rally kicked off early after the government reported that U.S. employers added 227,000 jobs in January, higher than last year’s average monthly gain of 187,000 and a sign that President Donald Trump has inherited a robust job market. The unemployment rate ticked up to a low 4.8% from 4.7% in December, but for a good reason: More people started looking for work. The percentage of adults working or looking for jobs increased to its highest level since September.

Financial firms rose after President Donald Trump took his first steps aimed at scaling back regulations on the industry. He signed an order that directs the Treasury Secretary to look for potential changes to the Dodd-Frank law, which reshaped financial regulations after the 2008-09 financial crisis and created the Consumer Financial Protection Bureau.

The order doesn’t have any immediate impact, but suggests Trump is intent on reducing regulations, which could boost profits for financial companies and banks.

Dow components Visa (V) and Goldman Sachs (GS) jumped 4.6%, JPMorgan Chase (JPM) added 3.1% and American Express (AXP) gained 2%. Smaller banks, which could find it easier to lend money if regulations are cut, also traded higher.

Overnight US Market :Dow closed +39 points

Stocks closed higher Friday but pulled back from earlier highs after three big U.S. banks reported quarterly profits that topped forecasts, boosting hopes on Wall Street that third-quarter earnings will be better than feared and mark the end of the so-called earnings recession.

Powered by upbeat bank earnings, the Dow Jones industrial average rose 39 points, or 0.4%, to 18,138 after being up as much as 160 points earlier. The broad Standard & Poor’s 500 stock index was up less than 0.1% to 2133 and the Nasdaq composite added less than 0.1% to 5214.

Before the opening bell, JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo(WFC), which is embroiled in a crisis over fraudulently opening customer accounts, all posted profit and sales numbers that exceeded analyst expectations. Bank shares were mixed after sharp early gains. Shares of JPMorgan were down 0.3% and Citigroup stock was 0.3% higher. Wells Fargo was flat.

Wall Street is hoping the S&P 500 will break a string of four straight quarters of contracting profit growth when the third-quarter earnings season is complete.

Alcoa kicks off earnings season with Q3 miss,Now Pre-Opening down -4%

Alcoa, the US aluminium company, on Tuesday kicked off earnings season on a gloomy note, disclosing weaker than expected quarterly profits and revenues that sent its shares sliding.

The New York-based company said that its third quarter adjusted profit, which excludes certain items, was 32 cents a share, missing Wall Street estimates by two cents.

Revenues fell 6 per cent on a year-on-year basis to $5.2bn, also shy of expectations of $5.3bn, “largely due to the impact of curtailed and closed operations, lower alumina pricing as well as other pricing pressures”.

The third-quarter earnings report will be the last for Alcoa in its current incarnation. Effective November 1, it will split into two standalone entities: Alcoa Corp, which will house its traditional mining, smelting and refining businesses, and Arconic Inc, focused on engineering aerospace and automotive parts.

Alcoa’s report marks the unofficial beginning of earnings season on Wall Street for the third quarter of 2016. Overall, earnings of S&P 500 companies are forecast to have fallen about 1 per cent on a year-on-year basis in the third quarter, marking the fifth straight quarterly fall in profits – the longest since the financial crisis.

Also set to release earnings this week include CSX Corp on Wednesday, Delta Air Lines on Thursday and a host of banks on Friday, including JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc.

Charting The Epic Collapse Of The World’s Most Systemically Dangerous Bank

It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed.

After a hard-hitting sequence of scandals, poor decisions, and unfortunate events,Visual Capitalist’s Jeff Desjardins notes that Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low.

Even more stunning is the long-term view of the German institution’s downward spiral.

With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007.


If the deaths of Lehman Brothers and Bear Stearns were quick and painless, the coming demise of Deutsche Bank has been long, drawn out, and painful.

In recent times, Deutsche Bank’s investment banking division has been among the largest in the world, comparable in size to Goldman Sachs, JP Morgan, Bank of America, and Citigroup. However, unlike those other names, Deutsche Bank has been walking wounded since the Financial Crisis, and the German bank has never been able to fully recover.

It’s ironic, because in 2009, the company’s CEO Josef Ackermann boldly proclaimed that Deutsche Bank had plenty of capital, and that it was weathering the crisis better than its competitors.

US Futures Spike After Banks Unveil Tens Of Billions In Buybacks

Between BofA, Citi, JPMorgan, and all the other big banks, announced buybacks amounting to dozens of billion have sent US equity futures spiking after hours.

  • Bank of America Authorizes $5b Buyback; Boosts Div to 7.5c-Share
  • Citigroup Plans $8.6b Buyback; Lifts Qtr Div to 16c From 5c
  • JPMorgan Chase Plans $10.6b Buyback, Maintains qtr Div at 48c/shr
  • Morgan Stanley Sets Buyback of Up to $3.5b, Boosts Div. to 20c
  • Goldman Sachs plans buybacks of stock, boosts quarterly dividend
  • American Express Plans $3.3b Buyback, Div. Boost to 32c-Share
  • Huntington Bancshares to Boost Qtr Div. to 8c From 7c/Shr
  • SunTrust to Lift Dividend 8% Starting 3Q, Sets $960m Repurchase
  • U.S. Bancorp to Buy Back $2.6b of Shares, Boosts Div. by 9.8%
  • Zions Bancorp Plans to Boost Dividend, Buyback
  • Ally Financial announces inaugural dividend of 8c/share, buyback of up to $700m of stock
  • M&T Bank Plans Max. $1.15b Buyback; Dividend Raised By Up to 5c
  • PNC Plans Share Buybacks Up to $2b, Raise Qtr Div. to 55c/shr
  • BNY Mellon Plans $2.7b Buyback, Boosts Dividend
  • Northern Trust to Buy Back $275m; Boosts Dividend to 38c Vs 36c
  • State Street to Buy Up to $1.4b; Boosts Dividend to 38c Vs 34c
  • Bank of New York plans to buy back $2.14b in shares, boost dividend by 12%
  • Citizens Finl Group Plans Quarterly Div. 12c/Share, Est. 12c
  • BNY Mellon Plans $2.7b Buyback, Boosts Dividend by ~12% to 19c from 17c
  • Banco Bilbao Vizcaya Plan Includes Common Dividends of $120m
  • KeyCorp Plans to Evaluate Qtr Div. Boost to 9.5c/Shr, Est. 8.5c
  • Discover Financial to Buy Back Up to $1.95b of Stock, Boost Div. to 30s/shr from 28c.

Futures are up across the board to frontrung the bank buybacks, no matter what exposure to financials they have:

The World’s Most Dangerous Banks Revealed

The US investment bank JP Morgan Chase has topped the list of the most systematically important financial institutions, whose failure could pose a threat to the international financial system.

On Wednesday the US Office of Financial Research (OFR) released a study which analyzes data on 30 global systemically important banks (G-SIBs). These banks are identified according to a set of 12 financial indicators created in 2011 by the Basel Committee on Banking Supervision, a group of bank supervisors from 28 jurisdictions.

The Basel Committee’s indicators reflect the banks’ size, their interconnectedness, the availability of substitutes for the services they provide, their global reach and their complexity. 

The data is used by regulators to calculate how much extra capital large banks must hold to protect against the risk they pose to the financial system, and to recommend the amount of risk-based capital surcharge a bank should be subject to.

The Basel Committee’s capital surcharge standard began to be implemented in 2016, and will be phased in by regulators over the next two to three years.

JPMorgan reduces aluminium stockpile

JPMorgan Chase has quietly reduced its multibillion-dollar stockpile of aluminium as the London Metal Exchange moves to introduce new rules on the reporting of outsized positions.

Until last week, one party — identified as JPMorgan by traders, brokers and warehouse owners — was holding more than half of the 2.8m tonnes of aluminium in the LME system. The size of that position has now fallen to between 30 and 40 per cent as of March 23, according to exchange data.

The bank’s holding, which at its height could have covered 40 years of Coca-Cola’s UK drinks can demand, has been the source of much disquiet in London’s tight-knit metal market.

The position, which is not against LME rules, has been blamed by some brokers for pushing up the price of near-term contracts, even though the aluminium market is burdened with a massive overhang of stock.

JPMorgan did not immediately respond to a request for comment.

The LME is working on a proposal that will force the owners of concentrated positions to report their holding and explain why they are holding so much metal.

JPMorgan Warns “Reduce Equity Exposure… Don’t Chase Crude”

“First quarter earnings will be difficult,” warns JPMorgan’s global head of equity strategy, suggesting investors consider reducing market exposure and/or “consider buying protection.” While Rees is not quite as directly ‘sell-it-all ‘ – adding that he hopes H2 earnings will pick up – his overall message, beneath the JPM vineer, is not bullishly biased. “We are not chasing the oil rally,” Rees adds, noting the technical short-covering nature of this most recent move, adding that “the worst is not behind us.”

China Is Now In Control Of Global Silver Prices

China has been an unofficial price-setter for most metals over the past decade. And this week, the country became an official participant in setting prices for one of the world’s most important precious metals markets.

That’s the London Bullion Market silver price. Where one of China’s largest banks just became a member of an elite group of players that controls fluctuations in this key metal.

CME Group, which runs the process for price setting of silver in London, said Sunday that China Construction Bank will officially join as a member of the silver price process. Putting it alongside existing participants HSBC, JPMorgan Chase, The Bank of Nova Scotia, Toronto Dominion Bank, and UBS.

These groups will now participate in price bids that go into setting the official London silver price. The first time that China will have direct influence on this process.

The expansion into China in itself is significant. And the entry of China Construction Bank into the market could also have some other important consequences for precious metals.