Big US Banks Are Tanking After JP Morgan's SHOCK Announcement

JP Morgan Chase

The big shocker of the afternoon has been JPMorgan’s surprise conference call after releasing their 10-Q.

Turns out, the bank suffered a $2 billion loss related to a synthetic derivative portfolio they had set up to hedge a possible downturn in the economy. (We think it has to do with the so-called London whale, but JPM CEO Jamie Dimon isn’t commenting.)

Not surprising, JPM stock has tanked in after-hours trading. It’s down around 5.7% right now.

In addition, other large-cap banks are falling with JP Morgan (along with markets around the world), most likely due to a loss of confidence in the whole financial industry and also because JPM was doing business with these other banks and the effect on that is still yet unknown.

Here’s a run-down:

  • Bank of America (BAC): – 2.73%
  • Citigroup (C): – 3.49%
  • Goldman Sachs (GS): – 2.18%
  • Morgan Stanley (MS): – 2.3%
  • Wells Fargo (WFC): -2.02%

Note that most of these banks had originally closed in the green for the day, with the exception of BAC and GS, which were down less than 1%.

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