The U.S. stock market continued its summer decline amid concerns about the country’s economic condition and pessimistic comments by Jamie Dimon, CEO of JPMorgan Chase (JPM).
The head of the largest U.S. bank is preparing for an economic hurricane that is already on the horizon and advised investors to do the same. The Dow Jones Industrial lost 0.54%. The S&P 500 and Nasdaq broad market index are down more than 0.7%.
JPMorgan is getting ready. And you be prepared
Speaking at an investment conference in New York, Jamie Dimon highlighted two major factors that worry him. First, the Fed has already canceled its emergency bond-buying program and announced its intention to reduce its balance sheet. The so-called quantitative tightening, or QT, is scheduled to begin this month. Second, the geopolitical situation in Europe, and Ukraine in particular, is of extreme concern.
JPMorgan CEO Jamie Dimon calls to prepare for the worst. Photo: Yandex
According to the American banker, this will eventually affect such commodities as oil and food. The sharpest European conflict since World War II will drive black gold prices to $150 or even $175 a barrel.
In conclusion, Dimon assured shareholders that JPMorgan Chase will be very conservative with its balance sheet, and advised to prepare thoroughly as well. JPMorgan shares were down 1.75% in trading Wednesday. Other banking corporations also fell: Bank of America (BAC) -1.42%, Wells Fargo (WFC) -1.33%, Morgan Stanley (MS) -1.32%.
Salesforce failed to help the Dow Jones
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Against the market were Amazon (AMZN) +1.75% and Alphabet (GOOGL) +0.11%, while Salesforce (CRM) gained nearly 10%. Adjusted earnings and revenue for the quarter in a tough economic environment beat industry analysts’ expectations, which led to a rise in the stock. Although Salesforce is often seen as a precursor to market positivity, positive results from the cloud software company weren’t enough to pull the Dow into the green.
Oil stocks are “better than the market
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Oil prices were virtually unchanged. West Texas Intermediate (WTI) continues to trade around $115 a barrel and North Sea Brent futures are around $116. Nevertheless, the stocks of oil and gas companies showed better dynamics than the market. The U.S. giants ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips, which are the largest by capitalization, grew 1.92%, 0.95% and 3.02%, respectively.
As for the June outlook, the first summer month has risen an average of 1.4% over the past decade, ranking fourth among all calendar members. However, if we take the data for the past 20 years, the situation changes significantly. June ranks only eleventh, second only to September, according to LPL Financial.
