Five Things You Need to Know to Start Your Day: Asia
A Chase bank branch in New York, US, on Dec. 28, 2023.
Photographer: Angus Mordant/BloombergGood morning. JPMorgan led banks in dimming outlooks. US stocks rally. Bond investors see a new risk. Here’s what’s moving markets. —Isabelle Lee
US banks scored a big break from regulators on new capital rules — only to ruin their own celebration with downbeat outlooks on lending. Fears that a Goldilocks era of healthy borrowers and fattened loan margins is ending spread Tuesday as financial stocks fell. JPMorgan dialed back expectations for next year’s net interest income, while major auto lender Ally Financial sounded a warning on consumer credit metrics. It made for a jarring split screen, with the Federal Reserve dialing down proposals for how much capital banks will have to hold against certain assets — just as banks signaled that the performance of some assets is set to worsen.