The Zacks Analyst Blog Highlights: JPMorgan, Bank Of America, Citigroup, Morgan Stanley And Goldman Sachs

For Immediate Release

Chicago, IL – March 10, 2020 – 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: JPMorgan (NYSE:JPM) , Bank of America (NYSE:BAC) , Citigroup (NYSE:C) , Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) .

Here are highlights from Monday’s Analyst Blog:

Coronavirus-Induced Volatility to Aid Bank Trading Business

Coronavirus fears have led to an unexpected rise in volatility in the market. With a spike in volatility and higher client activities, banks’ trading businesses (both equity and fixed income) are likely to get a significant boost.

Over the past few weeks, all the major indexes – the S&P 500, Dow Jones and Nasdaq – witnessed a roller coaster ride, swinging from new highs to record lows. So far this year, all the three indexes have pared last year’s gains and have lost more than 5%, with a major decline being witnessed over the past couple of weeks.

Further, due to such volatile market performance, investors are moving toward safe havens like Treasury bonds and other commodities like gold. Therefore, major Wall Street banks – JPMorgan, Bank of America, Citigroup, Morgan Stanley and Goldman Sachs – are expected to report improvement in both equity and fixed income trading revenues in the first quarter of 2020.

Trading revenues form a substantial part of these banks’ total revenues, ranging from more than 15% to almost 40%. Since fourth-quarter 2018, trading business had been dull with the trend gradually reversing in the second half of 2019. Now, with the virus induced volatility, we expect similar momentum to continue at least in the near term.

In fact, even before virus wreaked havoc on investor sentiments and led to heightened volatility, JPMorgan had projected “mid-teens” percentage growth in its trading revenues in the first quarter. With almost whole of March still before us and virus related scare not abating anytime soon, trading income is expected to continue rising.

Thus, for banks deriving substantial part of their total revenues from trading operations, this rise in market volatility and client activities is a boon. This will support revenues at the time when the Federal Reserve has lowered interest rates again, which will hurt banks’ net interest income and margins.

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