The Blue Whale of Wall Street!
The mammoth big blue whale that John Pierpont Morgan gave birth to approx. 150 years ago has not only survived Whaling by many a governments & its regulators but has thrived with its smart krill moves; be it the Glass-Steagall Act of the 1933 recession era (smartly hived off Investment Banking and stuck to Commerical Banking till the waters were clear) OR the recent Dodd-Frank Act from the ’07 financial meltdown (Trump admin is set to repeal & replace the act). It has also been embroiled in many a scandals “unintentionally” and have paid historic fines to regulators as a trade off.
Today, JP Morgan & Chase is the biggest bank in the United States and is set to grow even bigger what with the Feds set to taper and raise interest rates in the coming months/years and reckless consumers continuing to “swipe” themselves to instant gratification!
Early signs of this surge were evident when it reported its third quarter numbers yesterday with Revenues of $26.2 Billion exceeding analysts’ estimates of 25-ish billion and the all important Net Interest Income (interest earned via loans — interest paid to depositors) up 10%. The stock is inching closer to the $100 mark and is already up approx. 30% year to date.
But the fixed income trading desk, whose fortunes have been dwindling off late, thanks to surprisingly low volatility in the markets for the past one odd year (even North Korean threat didn’t spike it) was down 27%! Is it the London Whale curse??
Disclaimer: Any parrallels inferred by the readers to the deadly Blue Whale Gameand JP Morgan is purely coincidental and not author’s imagination!
This story was written last Thursday (Oct 12, 2017) as part of AlphaNews newsletter. Please subscribe to our newsletter for timely insights on S&P 500 companies