JPMorgan Chase (NYSE:JPM) ended the week down 0.2% on reports of a large looming payout to the Federal Energy Regulatory Commission, and general market nervousness in the face of next week's busy economic calendar.
With more word on the final FERC payout likely to come next week, and new reports that the superbank is now trying to sell its physical commodities businesses, look for more investor malaise in the week ahead.
Running for the exits
News broke early this week that JPMorgan was close to reaching a settlement over allegations by the federal government that it manipulated energy markets in California and the Midwest. The initial figure that had initially been bruited about was $1 billion.
Thankfully for investors, that figure has been cut by more than half, to $410 million. Expect the number to be firmed up this week, and expect investor nervousness over the final outcome to continue depressing investor enthusiasm in JPMorgan stock.
In no doubt directly related news, reports surfaced late on Friday that JPMorgan is eyeing the sale of its physical commodities businesses, which include oil, coal, and industrial metals businesses, as well as power plants. After the very public shellacking over its alleged manipulation of energy markets, and the very real financial implications that have followed, it's no wonder the superbank is suddenly running for the exits.
Investors should be thankful: Commodities businesses aren't exactly classic examples of "core" banking operations and can obviously get the bank into trouble.
Second quarter what?
And next week is a big one as far as market-driving economic news goes. On Wednesday, the Federal Reserve is set to release a statement from its policy-setting body, the Federal Open Market Committee.
Investors already nervous over what's to become of quantitative easing are no doubt getting even more nervous right now. Expect this concern to depress overall market performance in the week ahead, especially in the few days leading up to the meeting.
Also slated for release Wednesday is a report on the country's second-quarter gross domestic product. And on Friday morning, the Department of Labor will release its always highly anticipated monthly jobs report.
JPMorgan's fabulous second-quarter earnings are now a distant memory. Get ready for a flat performance next week for the country's biggest bank, much like the week past.