Business & Investment

Wall Street Beats: Jamie Dimon, Jeremy Grantham, threat of market plunge

Sonari Basak

There are Jamie Dimon and Jeremy Grantham.

CEO JP Morgan Chase & Co. States that there is a reason the market can maintain that level. Dimon told reporters at a briefing last week that a strong recovery in the second half of the year due to stagnant demand “can justify many prices.” He said it, regardless of the rate of increase. However, if the vaccine deployment stumbles or other issues surface, all bets will be void.

Grantham, co-founder GMO And long-time students in the market cycle believe that collapse is inevitable. He believes the plunge could rival the 2000 dot-com bust, or the 1929 crash-when stocks plunged by nearly 80% or more. Value investors believe that US President Joe Biden’s recovery plan could bring stocks to even more vulnerable heights, he told my colleague Eric Schatskkar.

One of these men may be right in the end. In any case, not only is the recovery long, but it also steadily reminds us of the unevenness. The S & P 500 has risen steadily since it bottomed out in March, but has reached new heights with Biden’s inauguration.But recently, nearly a million more have applied for unemployment. Ministry of Labor Report. “Today we are not where we need it,” says director Brian Deese. National Economic CouncilSaid at a briefing on Friday. Will the market catch up with reality?

And does the central bank have the tools it needs in the event of a market collapse again? Just in case, in the slump in March Federal Reserve SystemThe early move to stimulate the market with trillions of dollars did not prevent stocks from falling for days. Investors were saved only when they were told to buy corporate bonds as well.

But while I waited for my next shoe to fall, I made money.

Bank record
In the year of the pandemic, Morgan Stanley It has made the most money in history, JP Morgan The bank recorded the highest three-month profit ever seen. Goldman Sachs The investment bank said it had record net income.

And the Wall Street stars lined up in a row. Morgan Stanley remained number one in equity trading, Goldman Sachs was the leader in transaction fees, and JP Morgan’s fixed income powerhouse brought more money than others.

Still, investors aren’t biting. Banks fell in stock prices that week.

When it comes to the main street, the story gets more complicated. on the one hand, Bank of AmericaBrian Moynihan describes how consumer outlook is improving. Meanwhile, his executives faced the question of whether to stop accepting deposits or start billing. Moynihan’s company and its rivals are facing very low lending ratios as clients flush their banks with cash. At JP Morgan, key lending indicators declined quarterly in 2020.

If the situation continues to worsen, it raises the question: how much will banks expand their credit in a devastated economy? Despite the relatively optimistic view of the CEO, as Jennifer Piepzak of JP Morgan said in a bank earnings statement, “The bridge was strong enough. The remaining problem is that the bridge is good enough. Is it the length? ”

Facing a crisis
“Many Americas are hurt,” Biden said in a briefing on Friday. “Families are hungry, people are at risk of eviction and unemployment is on the rise again. We need to act.”

He emphasized the growing housing crisis as 14 million Americans lag behind rent. Dís pointed out another concern as food banks across the country faced a surge in demand. Biden is considering fighting Congress for a $ 1.9 trillion stimulus package and is controversial about much of his efforts, including raising the minimum wage to $ 15.

Deeds plans to discuss stimulus measures with a group of bipartisan senators this weekend. I will follow the recovery firmly. In the meantime, spend a very busy week and then a peaceful weekend.

Wall Street Beats: Jamie Dimon, Jeremy Grantham, threat of market plunge Wall Street Beats: Jamie Dimon, Jeremy Grantham, threat of market plunge

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