|Bid||0.00 x 2900|
|Ask||108.77 x 800|
|Day's Range||107.93 - 109.26|
|52 Week Range||91.11 - 119.24|
|Beta (3Y Monthly)||1.15|
|PE Ratio (TTM)||11.12|
|Forward Dividend & Yield||3.60 (3.35%)|
|1y Target Est||N/A|
Aug.21 -- JPMorgan Chase & Co. is planning to shut down its Chase Pay app in the bank’s third reversal on digital offerings in three months. Bloomberg's Michelle Davis reports on "Bloomberg Markets."
Hormel, Simply Good Foods, PG&E, JPMorgan Chase and Qantas are the companies to watch.
German banking fintech N26 is making a big push for the U.S. market, announcing a nationwide rollout in the U.S. Thursday after a two-month beta program the company called successful.
High-frequency trading and ETFs have exploded in popularity since 2008, but they have yet to be tested in a bear market Continue reading...
DOW UPDATE Shares of Boeing and JPMorgan Chase are seeing positive growth Thursday afternoon, lifting the Dow Jones Industrial Average into positive territory. Shares of Boeing (BA) and JPMorgan Chase (JPM) are contributing to the blue-chip gauge's intraday rally, as the Dow (DJIA) was most recently trading 132 points, or 0.
The Dow Jones Industrial Average is climbing Thursday afternoon with shares of Boeing and JPMorgan Chase seeing positive growth for the blue-chip average. Shares of Boeing (BA) and JPMorgan Chase (JPM) have contributed to the index's intraday rally, as the Dow (DJIA) is trading 65 points, or 0.3%, higher. Boeing's shares have climbed $14.26, or 4.2%, while those of JPMorgan Chase are up $1.37, or 1.3%, combining for an approximately 106-point boost for the Dow.
Goldman (GS) might acquire a majority stake of 51% holding in its Chinese investment banking joint venture, Goldman Sachs Gao Hua Securities Co.
(Bloomberg Opinion) -- “Allocate capital to the European Union – or else.”That’s how you might sum up the bloc’s Brexit strategy on the finance industry, with promises of market access being used as leverage to get U.K.-based firms to move jobs and investment out of London and onto the continent. While this attempted shakedown shows how much the Brits have to lose from Brexit, there’s a risk too of self-harm for the EU.The tough line from Brussels has, of course, created doubts about the City of London’s previously unchallenged global position. EY, a professional services provider, estimates that British finance companies so far have disclosed 1.3 billion pounds ($1.6 billion) of Brexit relocation and planning costs, allocated 2.6 billion pounds of capital for new entities abroad, planned an estimated 7,000 job moves, and expect to transfer 1 trillion pounds of assets out of the country. These are seen as costs worth paying to keep access to their EU clients.Rather awkwardly for the Brexiters who doubted that any American banker would choose the continent over London, cities such as Paris, Frankfurt and Amsterdam are proving them wrong as companies move their headquarters out of the U.K. London’s dominance is “not a God-given thing,” Philipp Hildebrand, vice-chairman of the U.S. asset manager BlackRock Inc., told Bloomberg Television last week.Still, it’s important not to get carried away with the “end of the City” stuff. Anyone waiting for a much bigger exodus, or signs that Brexit will unify and strengthen the euro zone’s financial market, will have been disappointed by the lack of progress. The European Central Bank’s supervision arm, the Single Supervisory Mechanism, warned last week that U.K.-based firms had transferred “significantly fewer” businesses, job functions and staff into their new European hubs than necessary.There has been some foot-dragging, clearly. At the end of January Bloomberg News found that the likes of JPMorgan Chase & Co. and Deutsche Bank AG were planning to relocate about 400-500 jobs apiece, just 10% of their initial estimates. More recent predictions of 7,000-10,000 staff moves for the sector as a whole barely compare with the 200,000 City departures that the London Stock Exchange’s old boss warned about back in 2016.Perhaps this is all unsurprising given the run of bad news coming out of the euro zone lately, from its economy to the performance of lenders such as Deutsche Bank. Or maybe it’s just a natural desire on the part of City firms to delay spending and upheaval until they really have no choice.You have to ask, though, whether the ever-tougher line taken by Brussels against jurisdictions outside the EU or on the brink of leaving – namely Switzerland and Britain – is merely providing an incentive to the finance industry’s many skilled lobbyists to find workarounds.It’s ironic that just as Deutsche’s shares plumb new depths, those of the London Stock Exchange Group Plc are hitting record highs, boosted in part by the successful lobbying of regulators to protect cross-border euro clearing under any Brexit scenario. Bankers have managed too to convince individual EU member states to take a softer approach than Brussels at times. Germany’s and France’s recent no-deal Brexit planning laws, for example, created a few handy carve-outs for finance.Faced with such obvious challenges to their authority, the temptation for European-wide regulators will be to double down. But this can be self-defeating.Look at how the pressure campaign against Switzerland over the terms of its access to the single market (seen as a test case for Brexit) has flopped. Retaliatory measures from Bern neutered the Brussels attempt to force EU firms to trade Swiss stocks on EU soil, and the Swiss bourse is reportedly mulling an EU acquisition as a workaround. The overall impact might just be a higher cost for the end investor.While defending the single market and its rules is laudable, the danger is that rushing to erect a regulatory moat around the continent’s financial sector will unintentionally make the market less liquid, less global and less attractive. Jonathan Faull, a former EU Commissioner, suggests that the bloc’s regulators should find ways to cooperate with the U.K. and set policy jointly. Brexit’s politics may be toxic, but technocratic heads should stay cooler.To contact the author of this story: Lionel Laurent at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- For 47 years, the Business Roundtable has lobbied on behalf of corporate America. Much of that time, it maintained a fiction(1) -- that the sole purpose of a corporation was to maximize profits on behalf of shareholders. This philosophy has been under assault for several years now, and this week the Business Roundtable announced it wants to put it to rest.In a widely circulated memo, the 200-member organization reversed itself, writing that "shareholder primacy” is no longer the sole purpose of a corporation. Instead, corporations must include a commitment to “all stakeholders,” which includes customers, employees, suppliers and local communities.Some kudos are in order for JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, and chairman of the Business Roundtable, for driving these changes. He has been discussing the need for a more inclusive form of capitalism, both in public speeches and in his letters to shareholders, for some time.But turning this aircraft carrier around won’t be easy, in large part because of the group's own history. Indeed, the Roundtable has spent most of the past four decades advocating against the interests of those exact stakeholders. To cite some of the more notable examples:\-- It fought the rise of labor unions and pro-union legislation;\-- Helped to defeat antitrust bills;\-- Prevented the formation of the Consumer Protection Agency;\-- Opposed corporate governance changes to make boards of directors and CEOs more accountable to stockholders;\-- Fought proper accounting of stock options given as compensation to executives and insiders;\-- Opposed increases in the national minimum wage (it now favors increases);\-- Lobbied to prevent restrictions on executive compensation;\-- Fought legislation that would create cleaner energy and address climate change;\-- Pushed for corporate income-tax cuts;\-- Supported anti-consumer Supreme Court decisions, including the fiction that corporations are legal people, and that campaign donations equal speech. The Roundtable might respond that this is all in the past. Let’s hope so. But the organization has an even greater challenge: Scan the list of 181 signatories to the recent memo and it's a Who’s Who of corporate behavior that has burdened and disadvantaged the very stakeholders they will now champion.Consider a few of the signatories:\-- Amazon.com Inc. and Apple Inc.: Two of the most valuable companies in the world are famously effective at using various tax dodges to avoid paying their fair share. I can recall when the Internal Revenue Service went after maneuvers that serve no valid business purpose other than tax avoidance. Consider that what isn't paid in tax by those who avoid them must be made up for by those who do -- mostly average Americans who also happen to be customers of these companies.The share of federal tax revenue paid by corporations has dropped by two-thirds in the past seven decades -- from 32% in 1952 to 10% in 2013; and corporate income tax as a share of gross domestic product has fallen from about 6% in 1946 to about 1.5% today.\-- Visa Inc., Mastercard Inc. and American Express Co.: Show good faith -- working with card-issuing banks as needed -- by simplifying the incomprehensible small print in the cardholder agreement and spell out in clear language the terms and penalties for late payment. Second, do the same for mandatory arbitration clauses that take away the right of customers to seek redress in public courts.\-- Ameriprise Financial Inc., Morgan Stanley and Principal Financial Group Inc: The brokers and insurers on the list have been zealous opponents of the fiduciary rule. Instead, they prefer a less stringent rule that allows them to sell products that are better for them than for their customers. Until those firms -- and Citigroup Inc. and JPMorgan are in this group -- embrace a higher duty of care, their gestures toward stakeholders are hollow. Oh, and they should drop the requirement that customers agree to mandatory arbitration clauses as one of the conditions for opening a brokerage account.\-- Coca Cola Co. and PepsiCo Inc.: For years these companies have been helping the American public achieve record levels of diabetes and obesity by selling health-damaging sugary drinks. They should acknowledge and warn customers of the consequences of consuming too much of their products, and accept the same kinds of taxes and health warnings now affixed to cigarettes.\-- Deere & Co.: The maker of farm machinery has led the fight against customers, insisting that they not make repairs to the equipment they own, and denying them access to parts and instructions. Repairs can only be made by Deere service technicians in what has come to be known as a “repair monopoly.” Apple, by the way, does the same thing.\-- Walmart Inc. and McDonald's Corp.: Both were steadfast opponents of increases in minimum wages for years. Although both now offer higher minimum pay, it was only after a tightening labor market forced them to increase wages. But this wasn't a case of corporate altruism -- their stores were messy and employees were sullen, and pay increases were part of plans to keep ill-treated customers from defecting. (McDonald's is not a signatory to the Roundtable memo).For the Roundtable commitment to be meaningful, the signatories are going to have to alter their behavior in ways large and small, and maybe even in ways that aren't always optimal for maximizing short-term profits. Still, we should be encouraged. But the proof will be in the follow through and the actual actions of the Roundtable members.(Corrects to clarify section on credit-card companies to indicate the role of banks in setting terms for customers. )(1) In “The Shareholder Value Myth,” Lynn Stout explained how the entire theory is based on a misreading of a 1919 court case -- Dodge vs. Ford – at the time, both privately held, non-public companies.To contact the author of this story: Barry Ritholtz at firstname.lastname@example.orgTo contact the editor responsible for this story: James Greiff at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investors were able to shrug off Tuesday's weakness on Wednesday, inspired by solid home sales figures and encouraging minutes from the most recent Federal Open Market Committee meeting. As it turns out, a second rate cut for September wasn't the foregone conclusion most investors believed it was.A "recalibration of the stance of policy, or mid-cycle adjustment" was how the Federal Reserve's chiefs described July's decision to lower the Fed Funds Rate by a quarter point. Going forward, "policymakers [need] to remain flexible and focused on the implications of incoming data for the outlook."InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, the Fed doesn't see imminent trouble ahead.To that end, the recent rate cut may already be having the desired effect. Though they leveled off this week, mortgage applications jumped nearly 22% for the week ending Aug. 9, as mortgage rates fell to multi-decade lows. Even before then, however, low rates caught the attention of would-be home buyers. Sales of existing homes surged to a five-month high pace of 5.42 million in July, according to data from the National Association of Realtors.Though the immediate response to word that the FOMC wasn't terribly interested in cutting rates again shaved some of the day's intra-day gains, investors kept stocks buoyed. The Dow Jones Industrial Average led the way, finishing the day up 0.93%, closely followed by the NASDAQ Composite's 0.9% advance. The S&P 500 rallied 0.82%. Top News in the Stock Market TodayTesla (NASDAQ:TSLA) may have mainstreamed the idea of electric vehicles. But, it seems rivals are starting to chip away at its market dominance. * 10 Marijuana Stocks to Ride High on the Farm Bill That's the concern from Alliance Bernstein analyst Toni Sacconaghi anyway, who cautioned shareholders after Tuesday's close that sales of the Model S and Model X have tapered off over the past couple of quarters. Sacconaghi also noted that the average selling price of those vehicles fell on the order of 10% during that time, leading to compressed gross margins, from 27% to 18%.On a semi-related note, Walmart (NYSE:WMT) filed a lawsuit against Tesla, though not over electric cars. According to reports that surfaced on Wednesday, several Tesla-made solar panels the retailer had installed had caught fire on stores' and facilities' rooftops.The news taints Tesla's already-struggling solar business.It was a bold, forward-thinking experiment. But, it's not bearing the fruit it was supposed to. That is, JPMorgan (NYSE:JPM) is shutting down its Chase Pay app.JPMorgan launched Chase Pay in 2015 when digital wallets were seemingly becoming mainstream. The idea hasn't been embraced by consumers like it was expected to. Going forward, JPMorgan will focus on partnerships with merchants as a means of bolstering its payments business. Big MoversThough it lagged well behind Amazon (NASDAQ:AMZN) and then Walmart on the e-commerce front, Target (NYSE:TGT) may finally be catching up on that front. Last quarter, digital sales for Target were up 34% year-over-year, driving TGT stock nearly 20% higher. The boost from the recently-ramped-up omnichannel effort also led Target to a nice earnings beat.Cree (NASDAQ:CREE) shares plunged almost 16% on Wednesday, despite the company's solid second-quarter results.After Tuesday's closing bell rang, the computer technology outfit reported earnings of 11 cents per share on revenue of $251 million, topping estimates for a bottom line of 10 cents per share and sales of $248 million. But the company said it's expecting to report a loss of 5 cents per share for the quarter now underway, on revenue of $240 million. The pros were modeling a top line of $260 million and earnings of 14 cents per share.Though it was possibly boosted by encouraging real estate news, Lowe's (NYSE:LOW) earned the bulk of the 10% gain it logged today. The pros were expecting sales of $20.9 billion to be turned into a profit of $2.01 per share, while the company did $21 billion worth of sales, and earned $2.15 per share. The bottom line was far better than the year-ago comparable of $1.86 per share.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Stock Market Today: Tesla Runs Into Headwinds, Fed Says Things Are Fine appeared first on InvestorPlace.
(JPM) (ticker: JPM) said Wednesday it will close its Chase Pay app next year. Eric Connolly, the head of Chase Pay, told Barron’s the bank sees its best opportunity in offering payments services through its online Chase Pay button, which is available on merchants’ sales sites. JPMorgan has been scaling back its digital offerings outside of its flagship Chase banking app.
St. Louis money managers echo the message from the St. Louis Fed president that there is no reason to panic about the U.S. economy. But that doesn’t mean investors should do nothing.
It's been a humdinger of a year when it comes to IPOs. None has taken as much abuse as the WeWork IPO. Is it a real estate company? Is it a temporary office provider? What exactly is WeWork and why is it so ridiculed?I first became aware of WeWork in October 2017 when it announced it was buying Lord & Taylor's flagship location in New York City for $850 million. At first, Hudson's Bay (OTCMKTS:HBAYF), Lord & Taylor's parent, was going to keep 150,000 of the iconic department store's 676,000 square feet of space, with WeWork using the rest for office rentals.InvestorPlace - Stock Market News, Stock Advice & Trading TipsUltimately, Hudson's Bay decided to abandon its plans to maintain a store on Fifth Avenue. The decision gave WeWork even more space to rent out. Flash forward to August 2019 and Amazon (NASDAQ:AMZN) is contemplating renting the entire 12 floors from WeWork. In negotiations with the soon-to-be public company, Amazon might also rent just a portion of the building, opting to find additional space elsewhere. * The 10 Best Marijuana Stocks to Buy Now Whatever happens, WeWork could use a little positive PR. With or without Amazon, the WeWork IPO is going to be a stinker. Here are seven reasons why. WeWork Loses a Lot of MoneySource: Shutterstock In the past three years, WeWork has lost $2.9 billion on $3.1 billion in revenue. That means for every dollar of sales; it loses 94 cents. That's hardly a pathway to profitability or a good sign for the WeWork IPO. What's worse is the fact that over these three years, WeWork's location operating expenses have increased by 251% from $433.2 million in 2016 to $1.8 billion in 2018. What are location operating expenses?"'Location operating expenses' are our largest category of expenses and represent the costs associated with servicing members at our locations. These expenses consist primarily of lease costs (including non-cash GAAP straight-line lease cost), core operating expenses (such as utilities and internet), expenses associated with ongoing repairs and maintenance and the costs of supporting a dynamic community in our locations," states its S-1. Think of it as the company's cost of goods sold. In fiscal 2018, it had a gross margin of just 16.5%. By comparison, Uber (NYSE:UBER) had a gross margin of 45% in its latest quarter ended June 30. Some analysts believe Uber may never make money, which means WeWork has got its work cut out for it. The WeWork IPO Already Has a Nosebleed ValuationSource: Shutterstock WeWork got its start in early 2010, opening its first location at 154 Grand Street in New York City. Since then, it's added 527 locations in 110 cities and 28 countries, making it a global business in just nine years. In 2009, thanks to its Series A funding, WeWork had a valuation of $97 million before it ever opened its doors. Two years later, after getting Series C funding, it was worth $4.8 billion. In January 2019, WeWork received $6 billion from Japan's SoftBank Group (OTCMKTS:SFTBF), which upped the valuation to $47 billion or 26 times sales. What stock can you buy for a lower P/S ratio? How about Amazon for just 3.6 times sales. And it's got $22 billion in free cash flow over the trailing 12 months. In contrast, WeWork had a negative free cash flow of $1.1 billion in the six months ended June 30.Who knew that Amazon could appear downright cheap next to WeWork? Heck, you can get Uber for just 4.8 times sales. And the WeWork IPO is expected to raise about $3.5 billion more. * 10 Undervalued Stocks With Breakout Potential On the valuation alone, investors should avoid the WeWork IPO. Adam Neumann Better Not Get Hit By a BusSource: Bjorn Bakstad / Shutterstock.com WeWork's S-1 mentions the word "Adam" 169 times amongst its 220 pages of text. That's CEO and co-founder Adam Neumann. By comparison, there are only 20 examples of "Rebekah," Neumann's wife and co-founder. Neumann is tied at the hip to WeWork. Without him, it appears there would be no company. The Financial Times has done an excellent job in its observations of the WeWork S-1, especially those that relate to Neumann personally. For one, Neumann has a line of credit for $500 million with three banks, all of whom are connected to the WeWork IPO. Of the line of credit, Neumann's drawn on $380 million of it. Some of his WeWork shares secure the line of credit. Also, J.P. Morgan (NYSE:JPM), who are up to their eyeballs involved in WeWork, have lent Neumann $98 million and $800 million in loans for the company as part of a $6 billion loan package to keep WeWork growing.If Neumann gets hit by a bus, Jamie Dimon's going to have a cow. After all, without the Neumann family involvement, WeWork's merely a company renting office space. The WeWork IPO Has a Three-Class Share StructureSource: Shutterstock Investors concerned about corporate governance will not like WeWork's share structure. You've heard of dual-class share structures. Those evil share structures that give a founder complete control over a multi-billion-dollar business without actually owning 51% of the equity. Well, WeWork comes to the IPO table with a three-class share structure. Those buying stock in the IPO will get Class A common stock that comes with one vote per share. WeWork's existing shareholders will come to the IPO with Class A, Class B, and Class C stock. The Class B and C come with 20 votes per share. Adam Neumann has 2.4 million Class A shares, 112.5 million Class B, and 1.1 million Class C shares. By comparison, SoftBank has 114 million Class A shares. This means that even though it has about the same equity as Neumann, the CEO will have 20 times the votes, easily controlling the business. Worse still, the IPO investors are getting shares in a holding company rather than directly in We Company MC LLC, which means they have to share the profits with Neumann and other early investors. According to Fortune, this means that Neumann will pay individual income tax rates on profits while IPO investors will pay U.S. corporate taxes plus personal taxes on dividends. "This is another move that enriches insiders," said Matthew Kennedy, Senior IPO Market Strategist at Renaissance Capital. "Up-C creates a tax shield, and insiders are taking that benefit for themselves. So the cash savings that the company would have had are gone, and We Co. will, therefore, be making higher payments to the IRS." * 10 Mid-Cap Dividend Stocks to Buy Now So, not only does Neumann get control by the unusual share structure, but he also benefits more than the WeWork IPO investors dumb enough to buy shares. Softbank Owns a Chunk of WeworkSource: Ned Snowman / Shutterstock.com The tech industry loves to throw out the name SoftBank whenever innovation and disruption is the subject of the day. If you don't know who SoftBank is, it's the people behind Sprint (NYSE:S), the wireless company so poorly run that it's been forced to merge with T-Mobile (NASDAQ:TMUS) to survive. Despite the FCC Chair's thumbs up for the merger, it still might not get the go-ahead. Money Week's John Stepek recently had some choice words for both SoftBank and WeWork. It's worth a read. "My view -- and it is just a view, and I realise I've been keen to call the "IPO at the top" of this cycle -- is that if WeWork manages to list, then there's a very good chance that we really have reached the top and that a bear market will begin shortly afterwards," Stepek wrote August 19. Stepek views SoftBank as the anti-Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), a telecom company that's turned itself into a venture capital company that will also lend money to its employees to invest in its startup businesses like WeWork. SoftBank founder Masayoshi Son lost a big chunk of his fortune in the dot.com crash in 2000. If not for a big bet on Alibaba (NYSE:BABA), he might not still be one of Japan's wealthiest persons. With a significant investment in WeWork, Son better hope 2000 doesn't repeat itself, because if it does, he'll be in the dustbin of history once more. WeWork Is Stuck in Expensive Lease AgreementsSource: Shutterstock The company's lease payment obligations were $47.2 billion at the end of June, 39% higher than at the end of 2018. If you invest in retail companies, you're probably familiar with these obligations. They're not quite long-term debt but liabilities nonetheless. While the obligations represent potential future revenue as WeWork adds individual and corporate members interested in accessing its office space, the members have the ability to up and leave while the company remains on the hook for the entire leased space. That's a fixed cost that it can't escape while its membership revenues are variable. "That mismatch can be deadly in a recession," Renaissance Capital's Kathleen Smith said recently. "It means the company has got to be able to pay the lease costs. If for some reason there's price pressure, lack of renewals, cancellations and they have a time where they're not leasing out their space, that could be a very huge risk in a recession." * The 10 Best Marijuana Stocks to Buy Now Considering some believe a recession could come as early as 2020, this is a considerable risk to WeWork's future valuation. WeWork Can't Get Its Own Name StraightSource: Shutterstock WeWork changed its name in January to The We Company so that it could expand beyond its role of renting commercial office space. It wants to become the center of its members' universe.In addition to WeWork, The We Company provides other offerings including WeGrow (schools), WeLive (hotels and apartments), Meetup (connecting people with shared interests online to meet offline), Flatiron School (online software programming classes), Conductor (marketing services software company), and Managed by Q (office management). I don't think anyone will argue that creating a holding company makes sense given all the different pies it's got itself into. However, it made its name as WeWork. It ought to retain that name.The We Company makes far less sense than something like WeWork Enterprises. Then again, the WeWork IPO makes little sense, so changing its name to The We Company is par for the course. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post 7 Reasons the WeWork IPO Will Be a Stinker appeared first on InvestorPlace.
(Bloomberg Opinion) -- Milton Friedman famously wrote that the sole purpose of a business is to generate profits for its shareholders. This week, leaders of many American companies begged to differ. In a Business Roundtable “Statement on the Purpose of a Corporation,” they affirmed that “each of our stakeholders is essential.” The accompanying press release sums it up crisply: “Updated statement moves away from shareholder primacy,” it says.The sentiment guiding this rethink — the notion that firms should strive to help their customers, workers, suppliers and surrounding communities, and not just serve their owners — is admirable in its way. No question, companies ought to be good corporate citizens; and, yes, as with ordinary citizens, there’s more to that than merely following the law. Even so, depending on exactly what it means, “moving away from shareholder primacy” raises a few awkward questions.The first and biggest concerns the underlying assumption — namely, that the search for profit is somehow at odds with advancing those other goals. It isn’t. In fact, the opposite is closer to the truth. The most successful firms have satisfied customers; loyal, trained and adequately motivated workers; reliable supply-chain partners; and supportive communities. These economic necessities make the search for profit by competent, farsighted managers a more effective guarantee of wider social benefits than any number of Business Roundtable undertakings, laudable as those might be.Some of the statement’s signatories, one suspects, might agree. Jamie Dimon, head of JPMorgan Chase and chairman of the Business Roundtable, said: “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.” Exactly. In a private-enterprise economy, the effort to deliver long-term results for shareholders isn’t just consistent with those other advances, it’s the very thing that drives them.Perhaps the Business Roundtable statement and others like it should therefore be seen as concessions to current political realities, rather than as a serious economic reappraisal. Certainly, American capitalism is under unusually fierce attack at the moment. It could use some skillful defenders. But does suggesting, falsely, that the interests of shareholders and stakeholders are basically in conflict really serve that purpose? Hardly. It concedes most of what the fiercest critics of the corporation allege. And if shareholder capitalism is so fundamentally flawed, one might ask, why trust CEOs, why trust even members of the Business Roundtable, to put things right?That’s a fair question — and it suggests something else for the signatories to ponder. What’s the right division of labor between corporate boards (accountable to shareholders) and governments (accountable to voters)? Nobody in the U.S. is advocating unfettered, unregulated capitalism. Governments rightly intervene to correct market failures and to advance all manner of social purposes. Yet how ambitious and intrusive these efforts should be is an intensely political question. Corporate executives might be wise to pause before taking up this function for themselves and trying, in effect, to privatize public policy.Delivering long-term gains for shareholders is a demanding enough task in its own right. Indeed, better aligning the incentives of corporate managers with that aim is a worthy ambition for tax and corporate-governance reformers. The pressures to neglect the traditional purpose — to stress short-term gains over long-term, for example, or take undue tax-preferred risks by borrowing excessively — are real. There’s a strong public interest in making capitalism more patient and farsighted, and good reason for enlightened executives to make this case to their investors and the public at large.However, calling for an end to shareholder primacy is not the way. It’s unwise to blur the line between politics and business. Capitalism’s best defense is successful companies that put their owners first — and because of that, not despite it, serve their stakeholders as well.—Editors: Clive Crook, Mark Whitehouse.To contact the senior editor responsible for Bloomberg Opinion’s editorials: David Shipley at firstname.lastname@example.org, .Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- JPMorgan Chase & Co. is planning to shut down its Chase Pay app in the bank’s third reversal on digital offerings in three months.The company started informing customers Wednesday that they’ll no longer be able to use the product to pay with their smartphones when shopping in stores starting early next year, according to an email seen by Bloomberg. They’ll still be able to use Chase Pay on the websites and apps of retailers that accept it.It’s an about-face on a product introduced four years ago to compete with rivals such as Apple Inc. that are working to transform how consumers pay for products and services. New technologies have spurred a revolution in mobile payments, with Chinese companies leading the way in helping consumers bypass credit and debit cards. The U.S. market has been slower to develop.“When we started this, it was four years ago -- the payment space has changed a lot over the period of time and customer behavior has changed,” Eric Connolly, head of Chase Pay, said in an interview. “A lot of merchants have shifted to ‘buy online, pick up in store’ and have invested in their online presence and their apps.”The bank says it wants to capture a larger share of a market long dominated by PayPal Holdings Inc., whose digital wallet was accepted by about 70% of online merchants at the end of the second quarter. Fewer than 1% accepted JPMorgan’s, according to a study by industry publication PYMNTS.com.Pablo Rodriguez, a JPMorgan spokesman, declined to say how many online retailers currently accept Chase Pay, adding that the bank expects that number to increase. In a statement on Wednesday, the company said that GrubHub Inc. will soon accept it.Shares of the bank, which have climbed 11% this year, advanced 0.8% to $108.16 at 9:33 a.m. in New York.Finn, On DeckJPMorgan has shown a greater willingness than rivals to cut bait on unsuccessful projects as it spends more than $11 billion on technology initiatives designed in part to position the bank to stay ahead of changes in how consumers spend money.Some of the bank’s other digital experiments have failed to take hold. In June, it shut down digital bank Finn a year after rolling out the brand nationally. A month later, it cut ties with fintech company On Deck, whose technology platform it had used to originate online small-business loans.JPMorgan has been testing other technologies to lure consumers to spend more on its cards. It has been adding tap-to-pay technology to its cards and joined with Cardlytics Inc. to offer coupons for select merchants inside its mobile app. In February, it unveiled a prototype cryptocurrency, dubbed JPM Coin, that it plans to use to speed up payments between companies.(Updates with JPMorgan’s digital experiments starting in seventh paragraph.)To contact the reporters on this story: Michelle F. Davis in New York at email@example.com;Jenny Surane in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Michael J. Moore at email@example.com, Steve Dickson, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Despite a challenging backdrop, Warren Buffett is adding bank stocks to his investment portfolio. Thus, investing in banks with strong fundamentals and prospects seem to be a wise decision.
for a role in Saudi Aramco’s planned stock market listing after a charm offensive by top executives, including former Trump administration official Dina Powell. The Wall Street bank had failed to secure a top advisory role in 2017 when Saudi Aramco nominated banks including JPMorgan Chase, Morgan Stanley, Moelis, Evercore and HSBC for what could be the world’s largest listing. The successful launch of a $12bn international bond by Saudi Aramco this year renewed momentum for the IPO and revived optimism about the Saudi economy after the international condemnation that followed the killing of journalist Jamal Khashoggi.
While issuance of non-QM loans is picking pace and attracting attention of big U.S. banks like Citigroup (C), it is early to worry as volume remains considerably below the level in pre-crisis years.
Banks likely to get some respite soon, with the U.S. regulators showing the green light for easing of the Volcker Rule under the Trump administration.
JPMorgan Chase & Co. said Wednesday that Chase is closing its stand-alone Chase Pay app in early 2020, although customers will be able to use Chase Pay in more merchant apps in the coming months. New customers coming on board include Grubhub , the bank said in a statement. Eric Connolly, head of Chase Pay, said customers are using the Chase Pay button on merchant websites and in apps more than ever. ""So, we're shifting our focus to expand Chase Pay's presence in more merchant apps and websites," he said. Chase has 51 million digitally active customers who use Chase-issued Visa debit and credit cards, including at Starbucks , Shell, United and elsewhere. JPMorgan shares were up 0.6% premarket, and have gained 10% in 2019, while the Dow Jones Industrial Average has gained 11% and the S&P 500 has gained 16%.
Mohamed El-Erian Says Europe Headed Down Mohamed el Erian, chief economic adviser of Allianz, doesn’t have a greatly optimistic view of the European economy. He says there is a 70% chance of the continent plunging into a recession. The United Kingdom, Italy, and Germany are all paralyzed by domestic issues including Brexit, a broken government, […]The post Market Morning: Europe Falters, Alibaba Postpones On Hong Kong, appeared first on Market Exclusive.
(Bloomberg) -- Rates traders are gearing up for a keynote speech from Federal Reserve Chairman Jerome Powell in Jackson Hole on Friday that could be wildly out of tune with their expectations.Futures markets are calling for the Fed to cut its key policy rate at least 50 basis points by year-end, and more than likely 75. Investors aren’t expecting great detail on the Fed’s plans for interest rates from its marquee annual event in Wyoming, but it’s widely expected that Powell will use the stage to signal more easing.His tone may disappoint. Not for the first time this year, he faces a market heavily invested in lower rates -- and yet again, the domestic data don’t necessarily warrant them. The tightest labor market in 50 years shows little sign of buckling, consumption continues to buoy growth and there’s even improvement on the inflation front. Powell has said the Fed will act to protect the U.S. economy from global risks, but no policy makers are suggesting that would amount to more than a couple of standard easings.Some traders may be waking up to this and preparing, given that short-end Treasury yields have risen relative to long-end yields so far this week. And a JPMorgan Chase & Co. survey of clients published Tuesday shows short positions in Treasuries rising to highest since April.“There seem to be some people out there who think this is going to be some sort of a really dovish speech and I think it’s going to be more balanced than that,” said Kathy Jones, chief fixed-income strategist at Charles Schwab & Co. She doesn’t see “a huge consensus” at the Fed for another 75 or 100 basis points of cuts over the next six or 12 months.There’s no clear sign that the two voters who dissented on the July cut have changed their stance. The Boston Fed’s Eric Rosengren said this week that he needed evidence of a U.S. slowdown to justify further easing.In July, the Fed managed to underwhelm even with the first rate cut in a decade. And this month, thanks to the latest deterioration in U.S.-China trade relations and ugly European data, yields reflect an even darker worldview.Last week, the 10- and 30-year yields dipped below 1.5% and 2%, respectively -- the latter an all-time low -- and they’re not far above those levels now. The two- to 10-year yield curve has recovered modestly from a brief inversion, but its recession signal was widely heeded.The most likely reaction of a dissatisfied market will be further flattening in the curve, Jones says, as traders pare positioning for rate cuts. That’s a rehash of what happened last month following the Fed’s meeting. And the trajectory could well be the same -- where an initial so-called bear flattening is replaced by a sharp decline in long-end yields on concern that the central bank will be too slow to avert a downturn.Reassurance OptionsTo reassure markets, Powell could dwell on the uncertainties arising from faltering trade talks, and the contraction in some of the world’s largest manufacturing sectors.But any confidence he manages to instill may be fragile. This weekend also brings the Group-of-Seven summit in France, and hopes for a more harmonious mood between U.S. President Donald Trump and his counterparts are so low that summit leaders are already making plans to scrap the traditional joint statement.Bret Barker at TCW Group Inc. expects that any snap back from the current lows in yields based on Powell’s remarks will be short-lived.“Our overall long-term view is that rates are heading lower,” he said.He’s favoring the two-year part of the curve, as he reckons the market’s call call on the path of rates this year is about right. He’s just not expecting any strong endorsement from Powell at the Wyoming retreat.For Barker, it’s hard to see why Powell would drop a big message into thin markets, “when he can just wait a couple more weeks and liquidity will be back and it’ll be September.”(Adds fourth paragraph to reflect change in market pricing, sentiment.)To contact the reporter on this story: Emily Barrett in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Benjamin Purvis at email@example.com, Mark Tannenbaum, Vivien Lou ChenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.