The Zacks Analyst Blog Highlights: JPMorgan Chase, Citigroup, Morgan Stanley, Goldman Sachs Group and LPL Financial Holdings
For Immediate Release
Chicago, IL – November 24, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the JPMorgan Chase & Co. (JPM-Free Report), Citigroup Inc. (C-Free Report), Morgan Stanley (MS-Free Report), Goldman Sachs Group, Inc. (GS-Free Report) and LPL Financial Holdings Inc. (LPLA-Free Report).
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Here are highlights from Friday’s Analyst Blog:
Bank Stock Roundup
Amid ongoing pressure on revenues, the strategy of streamlining operations to reduce costs remained prominent in the last five trading days. JPMorgan Chase & Co. (JPM-Free Report) and Citigroup Inc. (C-Free Report) lead the field of continued restructuring activities in the industry.
Moreover, the basic finding of the Senate Permanent Subcommittee on Investigations that began probe around two years ago revealed that some of the major Wall Street banks have become the owners of aluminum, natural gas and several other physical commodities, thereby making the financial stability of the U.S. economy more vulnerable. Therefore, the Senate report has made several recommendations that would likely usher more transparency in the banks’ involvement in the physical commodity market.
(Read to last week’s developments here: Bank Stock Roundup for Nov 14, 2014)
Recap of the Week’s Most Important Developments:
1. Some of the major Wall Street banks have become the owners of aluminum, natural gas and several other physical commodities, thereby, making the financial stability of the U.S. economy more vulnerable. This was the basic finding of the Senate Permanent Subcommittee on Investigations that began probe around two years ago.
The Senate report specifically mentions JPMorgan, Morgan Stanley (MS-Free Report) and The Goldman Sachs Group, Inc. (GS-Free Report) as the companies that amassed huge stakes in the commodity market, thereby changing its dynamics. This allowed the banks to trade in uranium, operate coal mines and metal ware houses, run oil and gas pipelines, and hoard copper and other metals.
The primary reason for the Senate probe was to examine whether increased participation of banks in physical commodity business would trigger any additional risk. Further, the probe was supposed to identify if increased oversight and regulations are necessary. (Read more: Senate Probe: Banks Exploit Commodity Market)
2. Citigroup is axing around 35 jobs in its capital markets trading operation in London. Notably, the recent layoffs included Valentin Marinov – head of Europe G-10 foreign-exchange strategy in London. This move follows the bank’s strategy of reducing costs, amid decreasing business transactions, stricter regulations, high litigation costs and rising popularity of electronic trading. Since the 2008 financial crisis, banks have been reducing highly-paid trading jobs to trim costs. (Read more: Citigroup to Conduct 35 Layoffs on London Trading Floor)
Also, in order to focus on its major clients, Citigroup has eliminated at least five bond salesmen, four of them were engaged in selling debt to mid-size investment firms. The four employees were part of a team that was focused on smaller money-management firms. Notably the team was dissolved last year. The latest move by the Wall Street banking giant seems to be in line with its several strategic initiatives. (Read more: Citigroup Layoffs 5 Bond Salesmen; Focuses on Big Clients)
3. JPMorgan announced a municipal bond deal with LPL Financial LLC, the wholly owned subsidiary of LPL Financial Holdings Inc. (LPLA-Free Report). JPMorgan opened its door to LPL Financial’s extensive network of financial advisors by providing them access to the municipal bonds market. LPL Financial, a leading organization of independent financial advisors, can now enter the municipal bonds market through JPMorgan.
The extended services of LPL Financial’s 17,500 financial advisors to this market will help JPMorgan in developing its distribution channels. Moreover, new orders by LPL financial’s advisors will be handled the same way as JPMorgan’s and other orders submitted to the underwriting syndicate. Financial terms of the agreement were not revealed. (Read more: JPMorgan & LPL Financial Ink Municipal Bond Deal)
4. JPMorgan along with Canadian retailer – Sears Canada Inc., announced its intention to end their 10-year credit card partnership, which includes the credit cards of Sears Card as well as Sears MasterCard. This termination news further emphasizes on the rising troubles of the Canadian retail market and more prominently of Sears Canada, the once star icon of the Canadian department store chains.
The agreement will lapse on its expiration date, which is Nov 15, 2015. Till then, JPMorgan will continue to provide services to Sears Canada’s clients. In the mean time, both the companies will search for other alternatives so that Sears Canada can continue to offer the similar skillful services to its customers after JPMorgan’s departure. (Read more: JPMorgan to End Credit Card Deal with Sears Canada)
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