A tense, uneven five days on Wall Street ended with a bang for JPMorgan Chase (JPM +0.23%), up a big 3%. Thank a decidedly encouraging June jobs report and a decidedly encouraging lack of bad news for the superbank.
Whistle while you work
On Friday, the Department of Labor reported jobs numbers for June. The U.S. economy added 195,000 public- and private-sector jobs, trouncing analyst expectations of 165,000. To boot, payroll numbers for the previous two months were revised up by 70,000.
The rate of unemployment was forecast to drop from the current 7.6% to 7.5%, but with more people trying to return to the workforce, it stayed where it was.
Foolish bottom line
In normal market times, a fabulous jobs report like this would have unquestionably boosted the market, but these aren't normal economic times.
For four years, investors have come to mentally count on quantitative easing and the subsequent money flooding out of the Federal Reserve to boost the U.S. economy. But after Chairman Ben Bernanke announced several weeks ago that QE could start to be wound down as early as this year if positive economic news continued to come in, positive economic news like the June jobs report has been just as likely to drive markets down as lift them up.
But with Friday's market surge, it's just possible that investors are starting to adjust to the idea of a post-QE world: Something that had to happen sooner or later. "The duty of the Fed is to take away the punch bowl just as the party gets good" -- so goes the old economic saw, and Bernanke might just be pulling this difficult trick off.
So JPMorgan got a boost from the Department of Labor this week, but also benefited from simply not having any bad news emerge about the bank itself: another difficult trick. Since the financial crisis, it seems like almost every week some unsettling news about a big American bank comes to light, but it's been a quiet six weeks or so for JPMorgan.
After May's bruising battle over whether CEO Jamie Dimon would be stripped of his title as chairman, and a 2012 exhaustively spent fighting off the effects of the London Whale, investors deserve a break from bank-related drama of any sort. Next up is second-quarter earnings, which JPMorgan will announce next Friday, July 12. Look for the any impact rising interest rates will have on the nation's second biggest home lender.
