Yesterday JP Morgan Chase startled the market by saying it would release its quarterly results almost a week early—on Thursday rather than January 21st. Of course, this immediately raised eyebrows. What’s going on at JP Morgan that has the bank convinced it needs to let investors know how things are going right now.
The recent history of preannouncements on Wall Street are not a happy one. The errors of Lehman Brothers’ attempts to quell market speculation by announcing results early is still fresh in the mind. Could JP Morgan be attempting to get out ahead of bad news?
The truly dark view spreading among some market watchers ties together the deterioration of Citi, the apparent rush by policy makers to free up the second tranche of the TARP, the bold new policy initiatives announced by Ben Bernanke this morning and the escalating size of the Obamulus. (Obama + stimuls=Obamulus.) Could the policy makers and the top bankers know about some looming catastrophe the market hasn’t yet discovered?
Of course, the exact opposite is possible as well. JP Morgan could have some very good news to share with the market. There is talk that JP Morgan didn’t want to announce results next week because that is when Citi will announce—and the markets are sure to be rough on any banks in uncertain financial health in the days leading up to what everyone expects will be a disaster at Citi. The thinking could be: let’s tell the market everything we can so that we don’t get hit hard by the Citi tsunami.
Bob O’Brein at Barron’s considers and then rejects the possibility that JP Morgan might have some new acquisition it wants to address:
The ‘X’ factor herein: maybe JPMorgan has another structural initiative to talk up. That’s apparently been what Citigroup (C) has been up to the last few days, declining to finalise the sale of its Smith Barney ops to Morgan Stanley (MS) until Citi can serve up its results – along with revelations of write-downs and losses – as some kind of a sidecar to the main cocktail. Is there a circumstance under which Jamie Dimon of JPM would want to claim-jump Morgan Stanley’s aspirations for Smith Barney?
That would seem unlikely on the face of it. JPM has had enough on its hands, rolling up WaMu, as well as the Bear Stearns operations earlier this year. Besides, would Citi, which once turned Mister Dimon out of sinecure there – albeit under a different regime – be willing to sit at the bargaining table? Unlikely.
So what do you think is going on with JP Morgan?