US futures stall as focus turns to massive week forward

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• Mon, April 8, 2024 at 7:32 AM EDT

  Jamie Dimon on why the variety of public corporations continues to shrink

  The golden nuggets for buyers from Jamie Dimon’s newest annual letter immediately continues on web page 35.

  The JP Morgan (JPM) boss factors out the “diminishing position of public corporations within the American monetary system”, as seen within the variety of US public corporations sitting at 4,300. In 1996, that quantity stood at 7,300.

  Conversely, the variety of US non-public corporations backed by non-public fairness corporations has surged to 11,200 from 1,900 during the last 20 years, notes Dimon.

  “This pattern is critical and should very nicely improve with extra regulation and litigation coming. Together with a frank evaluation of the regulation panorama, we actually want to contemplate: Is that this the result we would like?,” Dimon writes.

  Dimon calls out a number of elements for this disparity:

  • Intensified reporting necessities (see ESG).

  • Greater litigation bills.

  • Expensive rules.

  • “Cookie-cutter” board governance.

  • Shareholder activism.

  • Much less capital flexibility.

  • Heightened public scrutiny.

  • “Relentless stress” of quarterly earnings.

  I do marvel, nonetheless, if much less public corporations has been the motive force of upper inventory costs since Dimon took over as CEO within the early 2000s. Much less provide of belongings, extra competitors for these belongings — no?

• 

  Mon, April 8, 2024 at 7:05 AM EDT

  Dimon succession watchers could feast on this one

  Depend me as very fascinated by what JP Morgan (JPM) is engaged on within the discipline of synthetic intelligence.

  Dimon says in his annual letter immediately the corporate now has 2,000 AI/machine studying consultants and information scientists. He provides the corporate has 400 use instances in manufacturing in areas equivalent to advertising, fraud and threat — and they’re “more and more driving retail enterprise worth throughout our companies and features.”

  I’m equally fascinated by Dimon dropping COO Daniel Pinto’s identify (who has lengthy been seen as a Dimon successor) into his essential feedback on AI. Dimon views AI as so mission vital to JPM’s future success, he has created a brand new position known as the chief information and analytics officer. This position sits on the corporate’s working committee and stories on to Dimon and Pinto.

  Says Dimon:

  “Elevating this new position to the working committee degree — reporting on to Daniel Pinto and me — displays how vital this perform will likely be going ahead and the way critically we anticipate AI to affect our enterprise. This can embed information and analytics into our determination making at each degree of the corporate. The first focus isn’t just on the technical facets of AI but in addition on how all administration can — and will — use it. Every of our traces of enterprise has corresponding information and analytics roles so we are able to share greatest practices, develop reusable options that resolve a number of enterprise issues, and constantly be taught and enhance as the way forward for AI unfolds.”

• 

  Mon, April 8, 2024 at 6:50 AM EDT

  JP Morgan CEO Jamie Dimon’s masterclass in earning profits, in a single chart

  Need to know why JP Morgan (JPM) buyers hope Jamie Dimon stays CEO for 50 extra years?

  Certain the man is the face of banking with one of the best relationships within the recreation, however on the finish of the day — he simply is aware of make jobs of cash for shareholders.

  That is completely captured in Dimon’s annual letter out this morning. Try this chart on web page eight, exhibiting how JP Morgan’s internet earnings has grown by about six occasions since 2005.

  

• 

  Mon, April 8, 2024 at 6:28 AM EDT

  This is Jamie Dimon’s newest pondering on the place rates of interest could go

  JP Morgan (JPM) CEO Jamie Dimon simply dropped his newest annual letter to shareholders. You possibly can learn it right here in full. Yahoo Finance’s David Hollerith offers evaluation of the letter right here.

  Dimon would not waste anytime weighing in on the outlook for rates of interest, seemingly echoing what we’ve got heard from some hawkish FOMC members (which has pressured shares) in latest weeks:

  “Regardless of the unsettling panorama, together with final yr’s regional financial institution turmoil, the U.S. financial system continues to be resilient, with shoppers nonetheless spending, and the markets at present anticipate a mushy touchdown. It is very important be aware that the financial system is being fueled by giant quantities of presidency deficit spending and previous stimulus. There’s additionally a rising want for elevated spending as we proceed transitioning to a greener financial system, restructuring world provide chains, boosting navy expenditure and battling rising healthcare prices. This will likely result in stickier inflation and better charges than markets anticipate. Moreover, there are draw back dangers to look at. Quantitative tightening is draining greater than $900 billion in liquidity from the system yearly — and we’ve got by no means actually skilled the total impact of quantitative tightening on this scale. Plus the continued wars in Ukraine and the Center East proceed to have the potential to disrupt vitality and meals markets, migration, and navy and financial relationships, along with their dreadful human value. These important and considerably unprecedented forces trigger us to stay cautious.”

  Curiously, JP Morgan strategists mentioned this morning they see bond yields going decrease:

  “With respect to bond yields’ course, our name final October was to go lengthy period, that bond yields have probably peaked. After the yr so far bounceback, we predict that yields will resume transferring decrease. Our fastened earnings staff forecasts that US and German 10-year yields will likely be under present on 3-, 6- and 9-month horizons. We essentially agree with this, particularly given the elevated geopolitical dangers at current, however be aware the dangers of inflation staying too scorching.”