Category: zerohedge

Fed Chair Janet Yellen will provide Congress with an update on the state of the economy, how rosy the future is, why she needs to keep rates lower for longer, and that there are no bubbles (oh apart from in bonds which everyone should sell because we need the collateral). These are her first comments since the FOMC press conference in mid-June and stocks have soared since then (as bond yields have tumbled) and she will have to tread a fine line between exuberant over headline job improvements and the need to keep over-inflated bubbles pumped full of cheap/free money for longer…

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Perhaps the only thing more surprising that someone actually needed a poll to “discover” how the world feels regarding the NSA constant snooping of every form of electronic communication, is that a majority of the respondents in India, Nigeria and the Phillippines actually approve of having zero privacy. Oh, and the United States too.

As for the 10% of Russians who said “approve“, we assume they were either seriously drunk or even more seriously hung over when responding to the poll.

Source: Pew

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From OpenEurope

Juncker approved, Hague out, Lord Hill to Brussels: what does it mean?

This morning and last night saw three developments with importance for the UK’s Europe debate:

• William Hague resigned as Foreign Secretary, replaced by Phillip Hammond, with the Cabinet becoming more Eurosceptic overall,
• In nominating Lord Hill – the current leader of House of Lords – as the UK’s European Commissioner, Number 10 prioritised a ‘fixer’ and avoiding by-election over sending a heavy-hitter,
• MEPs approved Jean-Claude Juncker as European Commission President by 422 votes to 250, marking the starting point of a more politicised European Commission.

What does this mean?

The reshuffle: The Cabinet has clearly taken a more Eurosceptic turn. In Philip Hammond, the UK has a Foreign Secretary who has said he would vote to leave the EU if it does not reform. In itself this is not a radical position; the logic of the Conservative position has always been that advocating an ‘in’ vote is dependent on achieving reform and Cameron himself has said a UK exit would be “imaginable”. However, the key question is the threshold for staying in – how much needs to change for a Tory government to advocate an ‘In’ vote – and although Hammond has not set out his own red lines, he undoubtedly has a higher threshold than Hague.

In that sense, Hammond’s appointment sends a clear message both at home and abroad – reform is not just desirable but fundamental to the UK’s EU membership. On one hand, Hammond’s appointment may make it harder to meet the threshold , but the flip-side is that any ‘In’ endorsement by Hammond would carry more weight than one by Hague. However, it’s far from clear that Hammond will stay on as Foreign Secretary after the elections in any case so this is very much about pre-election position.  

In terms of the broader picture, the centre of gravity around the cabinet table has shifted in a more Eurosceptic direction. Ken Clarke – the last heavy hitting pro-integration Tory – loses his position as Cabinet Minister without portfolio, Michael Fallon has been promoted to Defence Secretary, while Dominic Grieve – a staunch defender of the European Convention on Human Rights – has been replaced as Attorney General by Jeremy Wright. The latter move in particular suggests that the Conservatives could be gearing up to withdraw from the European Convention on Human Rights. However, the enforced departure of Environment Secretary Owen Paterson has slightly counter-balanced this shift.  

Lord Hill’s nomination: David Cameron has clearly let other considerations trump sending the highest profile candidate to Brussels. In particular, the Tory leadership was absolutely adamant it had to avoid a by-election for fear of losing political momentum ahead of the general election. Therefore, it had a very small pool to choose from, with the fundamental problem being that the Tories have not been a party of government for some time, meaning they did not have many heavy hitters floating around outside the Commons. Lord Hill is clearly an experienced political operator who is highly rated amongst colleagues and has considerable PR skills. He has also worked at the heart of government, including as Chief of Staff to John Major, during which he was involved in negotiating the Maastricht Treaty. Still, Cameron is in a similar position to where Gordon Brown was in 2009, when Brown appointed Catherine Ashton – who also was the leader of the House of Lords and unknown outside Westminster. What’s different is that Number 10 has prioritised what it calls a ‘fixer’ who can work the corridors in Brussels, seeing that as the best way to get the Commission onside in crucial areas such as rules on access to benefits for EU migrants and trade liberalisation. This was something that Gordon Brown clearly neglected and, to be fair, something sorely needed. If Number 10 is right, the nomination could still prove a success – but it will no doubt be heavily criticised until then.  

Will Lord Hill get a top job?

The chances of the UK securing one of the key portfolios in the next European Commission – internal market, competition or trade – have worsened but have not been completely squashed. First, in a Commission filled with former and even current foreign ministers and prime ministers, Lord Hill will struggle to compete on merit. Secondly, his CV doesn’t easily lend itself to one of these portfolios. He founded and sold a PR firm and has experience from across governmental departments but no clear ‘economic portfolio’ type experience.  Thirdly, he is not a woman, which would have been one way for the UK to massively boost its chances for a good job. Having said, it’s too early to jump to conclusions, not least since several portfolios – included internal market – are expected to be broken up, making the job allocation unusually unpredictable. (Further Reading on the Open Europe blog: Who is Lord Hill?)

Juncker’s approval: MEPs today voted by 422 votes to 250, with 47 absentions to approve Juncker as the next European Commission President. With the backing of both MEPs and EU leaders, the debate moves on the other top jobs with the European Council President – who will preside over potential EU-UK renegotiations – a key position. The vote – via a secret ballot – was in many ways a formality but the relatively wide margin in favour of Juncker will likely reinforce his perceived mandate to make the European Commission, as he put it, “very political”. Today marks the starting point of that.

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Following disappointing retail sales number for both April and May, or two thirds of Q2, there was hope that June would finally be the month retail sales would soar. Alas, that would not be the case, following the release of the latest retail sales data by the Department of Commerce which reported that in June retail sales rose just 0.2%, well below the 0.6% expected and matching the lowest end of the forecast expectations (from 0.2% to 1.1%).

Misses were also reported for retail sales ex-autos (0.4%, Exp. 0.5%) and ex-autos and gas (0.4%, Exp. 0.5%). Perhaps the only saving grace was the upward revision of May data from 0.3% to 0.5% for the headline number and from 0.0% to 0.3% for the ex-autos and gas. If anything, however, today’s retail sales increase which was the slowest in 5 months confirms that the trend we warned about in April, namely that the US consumer tapped out in March to fund that month’s mad spending spree, and the spending trend has been deteriorating ever since.

There was some good news in today’s report which was the retail sales control group, which rose 0.6% compared to estimates of 0.5%, and the May revision of 0.0% to 0.2% means that GDP beancounters will likely end up adding a few basis points to their Q2 GDP estimate even as consumers enter Q3 in the weakest shape they have been since the polar vortex.

Finally, the breakdown of retail sales by business was rather paradoxical: because while automakers reported yet another surge in June car sales, retail sales for the category showed a -0.3% decline. The other big drop? Building materials and garden equipment supply dealers which slid -1.0%. Hardly a positive for that other key component to US GDP – housing.

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We can hear the headlines now… thin of the tax cuts, think of the improved discretionary spending, see Iraq was a storm in a teacup… WTI Crude’s drop back below $100 provdes so much great news for the world that many perhaps are missing that the world and his brother were long black gold into this and this squeeze appears anything but reflective of the rising tensions… (or is it due to tumbling demand?) Russia won’t be happy – time to escalate.

 

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The exuberant reaction in stocks at the Empire Fed’s 3rd beat in a row soaring to its highest since April 2010 is perhaps missing a much more critical point – looking forward, survey respondents are their least positive about future business conditions in 13 months. This is the biggest MoM drop in over 3 years with a big drop in new orders expected along with less employees (the worst in 2014) and notably lower capex.

 

 

But then there’s this – the future…

 

with the employment outlook worst in 2014

 

Charts: Bloomberg

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Despite reassurances from US asset-gatherers and TV ‘personalities’ that Portugal must be fixed (because US equities are up), it is anything but. Today’s triple whammy from the ‘recovered’ Portugal starts with Banco Espirito Santo bonds and stocks hitting new record lows (down over 10% more on the day). The contagion has rippled across to Rioforte, which controls Grupo Espirito Santo’s non-financial arm – and is likely to default on a EUR 847 million payment to Portugal Telecom. And just to add further salt to that wound, Portuguese business lending in May collapsed at a record pace (down 8.23%). But apart from that, yeash Portugal is all fixed and their sovereign bonds are worth every penny…

 

Step 1 – Banco Espirito Santo bonds and stocks continue to collapse…

 

Step 2 – The Contagion spreads to the rest of Portugal…

• Rioforte, which controls Grupo Espirito Santo’s non-financial arm, is likely to default on 847m-euro payment due to be made to PT today, Folha de S.Paulo reports, without saying where it got the information.
• Payment is part of 897m-euro debt to PT
• Negotiations are still underway
• Rioforte has been trying to sell assets over last few days to enable it to make the payment
• Co. has potential to raise 300m euros from sales of assets, including Tivoli hotel chain
• Rioforte, PT seek solution to enable loan payment, without changing terms of merger w/Oi
  Zero

 

Step 3 – Credit Creation is collapsing as business lending plunges by its most on record…

 

*  *  *

But apart from that Portugal is fixed

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Moments ago Goldman Sachs surprised Wall Street by trouncing expectations of a $3.09 EPS print with a beat over $1, printing at $4.10, coupled with a surge in revenue which declined from Q1’s $9.3 billion by far less than consensus (Est. $7.98 billion) had expected, printing at $9.125 billion. What drove this? Clearly not a pick up in trading volumes: FICC declined 10% Y/Y and 22% from a quarter ago, while total Institutional Client Services dropped 11% Y/Y. Investment Banking did pick up modestly, up 15% from last year’s $1.552 billion to $1.781 billion but this too did not explain the difference. The answer: Goldman’s prop trading group is baaaaack.

With total revenue for the “Investment and Lending” group, aka “Prop”, this was a whopping 46% surge in revenue Y/Y and up 36% from past quarter. In fact, Q2’s prop trading revenue was the highest since Q1 of 2011! Putting this in context: the Goldman prop trading revenue in Q2 was the second highest since Lehman, lower only than the $2.705 billion in Q1 2011. Rest in piece Volcker Rule.

Surely, the fact that Goldman repurchased $1.25 billion of its stock didn’t hurt the bottom line either.

As a result, average Goldman comp rose from $376,840 to $385,988: the highest since Q2 2013.

A great job well done, FDIC-insured hedge fund traders!

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• Microsoft to announce biggest round of job cuts in 5 years (BBG)
• Palestinian rocket fire persists, Israel warns truce at risk (Reuters)
• China tells U.S. to stay out of South China Seas dispute (Reuters)
• Merkel Resists Sundering U.S. Ties Over Spying Affair (BBG)
• BES slide, tumbling German sentiment hit markets (Reuters)
• Top 1 Percent Is Even Richer Than Surveys Say, ECB Paper Finds (BBG)
• Puerto Rico Utility May Default on January Interest Payment (BBG)
• Can’t Get a Job From an Algorithm, or So It Seems as Hot Resumes Go Nowhere Fast (BBG)
• Bank of China-CCTV drama may reveal power struggle in Beijing (SCMP)
• Quid pro quo: Qatar Air CEO Moves Toward Boeing 777X Sign-off, Slams A380 (BBG)
• Iraq army launches Tikrit offensive, politicians elect speaker (Reuters)
• Billionaire’s breakup plan would chop California into six states (Reuters)

 

Overnight Media Digest

WSJ

* U.S. drugmaker AbbVie Inc is close to clinching a deal to buy Dublin-based Shire Plc for more than £31 billion ($53 billion), in what would be one of the largest so-called inversion deals through which U.S. companies are seeking a lower corporate tax burden. (http://on.wsj.com/1zDiEQ2)

* On Monday, the Citigroup Inc agreed to pay $7 billion, including a $4 billion civil penalty to the Justice Department, $500 million to the Federal Deposit Insurance Corp and several states, and $2.5 billion earmarked for “consumer relief,” to settle the U.S. government’s allegations it knowingly sold shoddy mortgages ahead of the financial crisis. (http://on.wsj.com/1sWCQb3)

* On Tuesday, Alibaba Group Holding Ltd <IPO-BABA.N> announced a deal with U.S. production studio Lions Gate Entertainment Corp to make available on Alibaba set-top boxes offerings such as the “Twilight” hit vampire movie series and the TV show “Mad Men.” The partnership beefs up Alibaba’s entertainment menu as China’s Internet-savvy consumers are increasingly going online to watch TV shows, videos and movies. (http://on.wsj.com/1p0uo7T)

* Pilot Flying J, the nation’s largest truck-stop chain, accepted responsibility for the criminal conduct of its employees and agreed to pay $92 million in penalties in a settlement with the federal government. (http://on.wsj.com/1n4XYw5)

* The National Basketball Association is seeking to double the TV-rights fees it receives from ESPN majority owner Walt Disney Co and Time Warner Inc’s Turner Broadcasting, as the league looks to lock up deals for nationally televised games in the coming months, according to people familiar with the matter. (http://on.wsj.com/1rmQJzc)

* Lou Eccleston, who led the fast-growing S&P Capital IQ division at McGraw Hill Financial Inc departed Monday to pursue other opportunities, according to an internal company memo. (http://on.wsj.com/1nBcafn)

* The Justice Department is investigating possible pricing coordination among music publishing companies as it reviews the decades-old rules that govern the cost of licensing songs, according to people familiar with the matter. (http://on.wsj.com/Uaeo9W)

 

FT

AbbVie is close to clinching a 31 billion pound ($52.75 billion) takeover of Shire, which sells drugs for rare diseases, in what would be the latest example of a U.S. company buying a European rival motivated by tax benefits.

Citigroup Inc posted second-quarter earnings that beat analysts’ estimates and agreed to pay $7 billion to settle a U.S. government probe into the sale of mortgage-backed securities.

U.S.-based generic drugmaker Mylan said it would pay $5.3 billion for Abbott Laboratories’ generic drugs unit, giving Mylan access to more than 100 generic medicines in developed markets outside of the United States.

Airbus Group revealed plans on Monday for a new version of its popular A330 aircraft featuring more fuel-efficient engines, hoping to challenge Boeing Co’s dominance in long-range passenger jets.

Change Capital Partners is buying Italian luxury linens maker Frette, hoping to revive the 150-year-old company that supplied the Titanic and the Orient Express, according to a person familiar with the deal.

 

NYT

* The $7 billion deal that Citigroup Inc agreed to strike with the Justice Department involves one of the largest cash penalties ever paid to settle a federal inquiry into a bank suspected of mortgage misdeeds. (http://nyti.ms/1qbJo8t)

* Audit firm Ernst and Young LLP agreed to pay more than $4 million to settle accusations by the Securities and Exchange Commission that it violated independence rules by lobbying on behalf of two of its audit clients. (http://nyti.ms/WebVgn)

* Yahoo Inc will live stream Dave Matthews Band’s concert at The Jacksonville Veterans Memorial Arena in Jacksonville, Florida on Tuesday night, which will be the first in its ambitious partnership with Live Nation Entertainment Inc to supply free live video streams of a different concert each day for an entire year. (http://nyti.ms/1nqRQJ2)

* IAC/InterActiveCorp has acquired parts of HowAboutWe, a Brooklyn-based start-up. Representatives for the Match Group and HowAboutWe confirmed the deal but would not disclose the price. HowAboutWe hosts a handful of online romance sites; its marquee offerings are HowAboutWe Dating, a matchmaking and date-suggestion service for singles, and HowAboutWe Couples, a date-suggestion service. (http://nyti.ms/1n55Ttp)

* Twenty-First Century Fox Inc said that it was combining its broadcasting company and studio group into one business, reflecting the broader changes sweeping across the television landscape as global and digital outlets for programming proliferate. (http://nyti.ms/1zE01vq)

* Three former top executives at Dewey & LeBoeuf, charged by New York prosecutors with breaking the law in a failed bid to keep the struggling law firm afloat, contend they always intended to pay back the firm’s lenders and bond investors. (http://nyti.ms/1mcXe26)

 

Canada

THE GLOBE AND MAIL

** The Ontario Liberals are promising to build more transit, dole out grants to businesses, create a new provincial pension plan and develop the Ring of Fire mineral deposit – all while balancing the budget in three years. (http://bit.ly/1ylcvX0)

** A new wave of court actions has been filed in relation to the Northern Gateway project, adding to the legal challenges dogging the C$7.9 billion ($7.36 billion) proposal and raising more questions about if and when it will proceed. (http://bit.ly/1qCDSri)

Starting near Edmonton, Alberta, Enbridge Inc’s Northern Gateway would run 1,177 km (730 miles) – mostly through the wilderness of northern British Columbia – to Kitimat, a deepwater port on the Pacific Coast.

Reports in the business section:

** As mobile gaming becomes increasingly popular in China, Baidu Inc, China’s biggest search engine company, is visiting Vancouver and Toronto to see if it can strike productive relationships with Canadian game developers. (http://bit.ly/1oD4828)

NATIONAL POST

** The New Democratic Party’s appeal for the Federal Court of Canada to overturn a decision by the House of Commons’ governing body has been blasted by a Conservative backbencher as an attempt to take away power from Parliament and turn it over to the judiciary. (http://bit.ly/WetOvJ)

** Calgary police have arrested a suspect who is facing murder charges in the disappearance of Nathan O’Brien and his grandparents Alvin and Kathryn Liknes, but one relative says the family still hopes they are alive. (http://bit.ly/Weu0ee)

FINANCIAL POST

** The dramatic rise of U.S. crude oil and natural gas production is disrupting even long-established trade flows inside Canada, as Alberta producers are increasingly finding themselves competing for – and losing – market share to American petroleum suppliers, even in their home province. (http://bit.ly/1r0LvtG)

** More than five years after the global recession kicked the legs out from under business jet demand, sales are gradually improving in the hardest-hit parts of the market, according to the head of Bombardier Inc’s business aircraft division. (http://bit.ly/1zEqLfd)

 

Hong Kong

SOUTH CHINA MORNING POST

— New World Development Co Ltd plans to open its K11 Art Malls in 11 mainland cities, including Beijing, Guangzhou, Shenyang and Tianjin. It expects the shopping malls could rake in annual sales of 20 billion yuan ($3.26 billion) when they become operational, said Executive Director Adrian Cheng. (http://ift.tt/1ylLHWD)

— Peach, Japan’s first budget airline, will receive its tenth aircraft next month but continue to limit its network to a four-hour flying zone in order to maximise resources. The carrier would increase its fleet to 17 by 2015, said Chief Executive Shinichi Inoue. (http://ift.tt/1ylLHWH)

— Sales at two new residential property projects in Yuen Long over the weekend exceeded expectations, showing that buyers are becoming active again after a standstill due to the government’s measures to cool the property market. (http://ift.tt/1nCM9ME)

THE STANDARD

— Wheelock and Co Ltd has become the biggest developer in Tseung Kwan O South with the clinching of its latest site adding four plots worth nearly HK$10 billion ($1.29 billion) into its land bank. The company would invest up to HK$8.5 billion in the latest plot it acquired, said Managing Director Ricky Wong. (http://ift.tt/1ylLHWN)

APPLE DAILY

— China All Access (Holdings) Ltd would continue to focus on the smartphone market and is participating in pilot production with TCL Communication Technology Holdings Ltd , said Chief Executive Director Shao Kwok Keung.

— Beijing Jingneng Clean Energy Co Ltd expects net profit for the first six months to increase by more than 35 percent from a year earlier, as gas-fired power and heat energy generation capacity grows.

 

Britain

The Times

WILLIAM HAGUE STANDS DOWN AMID BLOODY CABINET PURGE

William Hague is standing down as British foreign secretary it was announced last night as Prime Minister David Cameron carried out a bloody cabinet purge. (http://thetim.es/1qb5yrk)

SHIRE FINALLY TEMPTED BY 1 BLN STG MEGA-MERGER WITH U.S. RIVAL

The blockbuster merger between Shire and AbbVie took a big step closer after the British drugs company announced it is willing to recommend a sweetened 31.4 billion pound ($53.43 billion) bid. (http://thetim.es/1qb5DLB)

BRITISH BANK SUES TYCOON FOR 35 MLN STG AMID FRAUD CLAIMS

Standard Chartered has launched a legal attack on the Chinese tycoon at the centre of a “missing metals” fraud scandal that has hit commodities trading at one of the world’s busiest ports. (http://thetim.es/U5nvZp)

The Guardian

CO-OP BANK CHAIRMAN JOINS ALLIED IRISH BANK

Veteran banker Richard Pym has been appointed chairman of Allied Irish Bank, the lender that received a 21 billion euro ($28.65 billion) bailout from the Irish taxpayer. (http://bit.ly/1npFEYN)

CHINA CHARGES GSK FOREIGN CONSULTANTS WITH ILLEGAL INVESTIGATION

Chinese prosecutors have formally indicted a British-U.S. couple on the charge of “illegally obtaining private information on Chinese citizens”, one year after they were detained in connection with an increasingly murky bribery case against the British drugmaker GlaxoSmithKline. (http://bit.ly/1yj1qpA)

INTEREST RATE FEARS PUT BRAKES ON SALES

Shoppers put the brakes on spending last month amid concerns over the potential for higher interest rates, a retail industry report suggests. (http://bit.ly/1oW0OlE)

The Telegraph

CABLE BLOCKS 1 BLN STG SALE OF LAND REGISTRY IN WAKE OF BOTCHED ROYAL MAIL DEAL

Britain’s government has scrapped plans to privatise the Land Registry after Vince Cable vetoed the deal in the wake of Royal Mail’s controversial flotation. (http://bit.ly/1wmVlp7)

SCOTTISH INDEPENDENCE COULD SEE STERLING FALL 10 PCT, SAYS MORGAN STANLEY

Scottish independence could see the value of sterling drop by up to 10 percent, leave the rest of the UK more exposed to financial risks and delay a decision on increasing interest rates beyond the general election. (http://bit.ly/1qaOoKy)

KIDDICARE SOLD FOR 2 MLN STG TO ENDLESS PRIVATE EQUITY

Supermarket group Morrisons has sold its childrenswear business, Kiddicare, for 2 million pounds to private equity firm Endless after a brief, but disastrous ownership. Morrisons bought Kiddicare for 70 million pounds in 2011 but suffered a 163 million pound write down on its investment. (http://bit.ly/WdgYh6)

Sky News

CITY WATCHDOG TO UNVEIL PAYDAY LOAN CAP

Britain’s financial regulator will unveil plans on Tuesday for a lower-than-expected cap on the cost of payday loans in a move that will create one of the world’s most stringent regulatory regimes for the fast-credit industry. (http://bit.ly/1mbuaYI)

The Independent

BANK OF ENGLAND URGED TO RESOLVE JOBS ‘CRISIS’ BEFORE RAISING RATES BY TUC

The Trades Union Congress will today seek to send a shot across the bows of hawks on the Bank of England’s Monetary Policy Committee by warning that unemployment is still too high to contemplate a rise in interest rates. (http://ind.pn/1knB4ud)

 

 

 

Fly On The Wall 7:00 AM Market Snapshot

via Zero Hedge http://ift.tt/1ks9P1B Tyler Durden

While JPM stock is trading modestly higher in the pre-market following its earnings report which beat expectations on the top and the bottom line, it doesn’t hide a troubling trend seen across all the banks that have reported so far, one we forecast would take place in an environment of plunging trading volumes and near-record low mortgage production: slumping earnings. J.P. Morgan Chase JPM +0.88% & Co. said second-quarter earnings sank 7.9% as the bank continued to grapple with weak trading revenue. Indeed, as WSJ summarized, “J.P. Morgan Chase & Co. said second-quarter earnings sank 7.9% as the bank continued to grapple with weak trading revenue.”

GAAP revenue was down 3% to $24.45 billion, and was down 2.3% on a non-GAAP (yes, non-GAAP revenue) basis to $25.35 billion. Still, this beat estimates of of $23.89 billion and is the reason for JPM’s 2% rise. J.P. Morgan reported a profit of $6 billion, or $1.46 a share, compared with $6.5 billion, or $1.60 a share, a year earlier. The latest earnings figures included a legal expense of 13 cents a share.

A big driver in the EPS beat was JPM’s repurchase of $1.5 billion in common stock, suggesting the bank has $5 billion left for buybacks for the Q3 2014-Q1 2015 period.

Notably, JPM’s reserve release of $521 million was a key contributor to EPS, well above the $417 million reported a quarter ago and shows that when JPM needs to report a profit at all costs it will certainly resort to raiding the piggy bank.

One part of the reason for the ongoing contraction in JPM top and bottom line numbers: mortgage banking.

What JPM had to say about this:

• Mortgage Production pretax income of $63mm, down $519mm YoY
  • Revenue, excluding repurchase, 74% lower YoY primarily on lower volumes; originations down 66% YoY and 1% QoQ
  • Partially offset by lower expenses and repurchase benefit
• Mortgage Servicing pretax income of $479mm, up $346mm YoY
  • Net servicing-related revenue of $693mm, down 10% YoY
  • Servicing expense of $552mm, down 23% YoY
  • MSR risk management income of $338mm

• Headcount down ~13,000 YoY and ~5,000 YTD

The other reason for declining profits: ongoing deterioration in the firm’s trading volumes, offset partially by Investment Banking services.

 

From JPM:

• Markets & Investor Services revenue
• Markets revenue of $4.6B, down 14% YoY, primarily driven by:
  • Fixed Income Markets of $3.5B, down 15% YoY, on historically low levels of volatility and lower client activity across products
  • Equity Markets of $1.2B, down 10% YoY, primarily due to lower derivatives revenue
• Securities Services revenue of $1.1B, up 5% YoY, primarily driven by higher NII on increased deposits
• Credit Adjustments & Other gain of $125mm driven by net FVA/DVA

And, not surprisingly, just like with Wells and Citi, NIM declined yet again:

 

In conclusion, here is JPM’s outlook:

 

Full presentation below:

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