JPMorgan Continues Its Rise in Spite of Itself
May 8th 2013 10:42AM
Updated May 8th 2013 11:15AM
Big bank JPMorgan Chase is on the rise once again this morning, with a 0.9% rise just after trading began. Not to mention the bank's stock is up 1.99% so far this week. JPM has been enjoying some much needed gains in the market despite more than one piece of negative news for its operations in the past week.
Just to highlight the headwinds that JPMorgan faces, here are the latest headlines that may have investors concerned:
- Another top executive left the bank last week, bringing the total to eight over the past few years. This gives rise to questions about succession plans and "deep benches."
- Energy rigging in California and Michigan -- not something you would normally think of for a bank's operations, but at least one executive has been called out as lying while under oath about the matter.
- Oversight. After the London Whale debacle, many investors cried out for more oversight (as did some regulators), and now they have their chance to demand it once again. Later this month a non-binding vote at the annual shareholders meeting will allow investors to speak up on whether Jamie Dimon's dual role as CEO and Chairman should be split up.
So with more and more pressure building on Dimon and the bank, how can it be making such a huge run this week?
Half of a week has already gone by and the market is still basking in the afterglow of the Berkshire Hathaway shareholder-palooza. While generally this would lead to boosts in other bank stocks, JPMorgan and more specifically Jamie Dimon, got a big plug from the Great One himself. When asked about the upcoming vote to split Dimon's role, Buffett gave the CEO his total support, saying that the bank will be run better with Dimon in both roles. He also said that he couldn't think of a better Chairman and that splitting the two posts would allow the CEO to be replaced much more easily, something that might not be a good thing for the bank.
Elsewhere in the banking sphere, competitor Bank of America's settlement with MBIA may also have something to do with JPM's continued rise.Since most of the banks continue to be plagued by lawsuits stemming from the financial crisis, when one is able to settle or dismiss a case, the others are looked at favorably as well. In the case of B of A, the bank made a big offer to the insurer MBIA and ducked some much larger payouts than it may have been forced to make had the case gone to trial.
So none of this is new to the markets besides the B of A settlement, which just happened on Monday. But in stock market time, that's eons ago, right? If you're watching your stocks on a daily basis, you're doing yourself and your portfolio a disservice. Even if you don't trade daily, watching your stocks fall for no apparent reason will still hurt twice as much as if they rise for no reason. After time, that stress and pain from daily ups and downs will influence your decision to sell, possibly leaving you out in the cold as the long-term investors continue to profit.
With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!
The article JPMorgan Continues Its Rise in Spite of Itself originally appeared on Fool.com.Fool contributor Jessica Alling has no position in any stocks mentioned -- you can contact her here. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Bank of America, Berkshire Hathaway, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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