The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs and Citigroup
The Zacks Analyst Blog Highlights: JPMorgan Chase, Bank of America, Wells Fargo, Goldman Sachs and Citigroup PR Newswire CHICAGO, May 14, 2012 CHICAGO, May 14, 2012 /PRNewswire/ -- 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 Chase (NYSE:JPM), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS) and Citigroup (NYSE:C). (Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO) Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513 Here are highlights from Friday's Analyst Blog: JPM Trading Loss Hits Bank Stocks Following the announcement of a huge trading loss at JPMorgan Chase & Co. (NYSE:JPM), the banking sector stocks fell in the after-market trading on Thursday. In its quarterly regulatory filing, JPMorgan stated that its chief investment office (CIO) has incurred substantial mark-to-market losses during the first six weeks of the current quarter. CIO is a unit of JPMorgan, which it uses to make broad-based bets in order to hedge its loan portfolio. JPMorgan incurred a huge loss of nearly $2 billion in its synthetic credit portfolio, which was partially mitigated by securities gain of $1 billion. This portfolio is under Corporate division, within the Corporate/Private Equity segment. The company stated that Corporate is now expected to report a net loss of about $800 million for the second quarter, which was previously estimated to be a profit of $200 million. This shocking revelation shattered the confidence level of the investors and JPMorgan's shares plunged nearly 7% in the after-market trading. This also dragged down the stock prices of the entire banking sector. Likewise, the shares of banking giants, like Bank of America Corporation (NYSE:BAC), Wells Fargo & Company (NYSE:WFC), The Goldman Sachs Group Inc. (NYSE:GS), Citigroup Inc. (NYSE:C), etc. were down more than 2% in after-hours trading. Last month, Wall Street Journal reported that JPMorgan had been heavily investing in an index of credit default swap (a type of derivative), which was to protect the company against the potential losses on its large holdings of loans and bonds. However, JPMorgan's strategy backfired as the repositioning of the credit portfolio was poorly monitored and executed, leading the recent huge losses. Further, JPMorgan incurred losses at a time when regulators had already set the date for the implementation of Volcker rule. Moreover, JPMorgan runs the risk of further hedge-related losses over the quarter. These losses are expected to significantly dampen the company's overall financial results in the second quarter. Currently, JPMorgan retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long-term Neutral rating on the stock. Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515. About Zacks Equity Research Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons. Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. 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