JPM's upcoming Friday the 13th report
One could think that someone at JPMorgan Chase had a dark sense of humor when they scheduled this quarter's earnings release on the unluckiest of days. In fact this is, even apart from the 13th, the first Friday release by JPM and its historic legal predecessors in at least 24 years. It's not without reason.
Obviously JPM has some big issues to deal with. Notably of course is the huge failed macro hedge put on by the "London Whale" with losses initially put at $2 billion. Unwinding the hedge could send losses as high as $10 billion over time is a guess. While small in comparison, there are a host of other issues related to both the industry and JPM in particular that will be on the table. One that that will be raised by the media and is not so small is the future of the talented CEO Jamie Dimon. One would hope this is not real.
Historically, reporting on Friday was generally seen as a harbinger of bad news. Believe if or not, in the days before the 24 hour news cycle and instant communication everywhere, it was thought that reporting on Friday meant that many people would not notice the bad news, especially retail shareholders and customers, as well as sleepy underpaid pension fund managers. Some firms may still believe that today, but certainly not JPM. One could suggest that possible scathing media coverage on Friday and in the print media on Saturday could be moderated over a couple of weekend days.
What they must be doing is building in time for a thorough reassessment of how bad the news is, depending on the extent to which they could get slaughtered on Friday. Looking at their website, they have an earnings conference call scheduled for 7:30am, so they must be planning to release earnings as early as 6:00am. That gives time for a possible two hour conference call before the market opens.
A few firms like Alcoa, first Monday of the reporting season, stick to the same date quarter in quarter out. Most, however, retain discretion over the exact date of the earnings release although of course they announce the date well in advance. JPM's bias in recent years has been to be among the first to report among the large banks. That bias is maintained, and we will wait until this coming Friday the 13th to see what this choice really means.
One caveat to all of this speculation. There is plenty of bad news already built into JPM's stock price considering the strength of their franchise. The market overall will be the judge of whatever they report, not the short term traders or the media in general. Getting bad news out of the way can sometimes be a relief.
Obviously JPM has some big issues to deal with. Notably of course is the huge failed macro hedge put on by the "London Whale" with losses initially put at $2 billion. Unwinding the hedge could send losses as high as $10 billion over time is a guess. While small in comparison, there are a host of other issues related to both the industry and JPM in particular that will be on the table. One that that will be raised by the media and is not so small is the future of the talented CEO Jamie Dimon. One would hope this is not real.
Historically, reporting on Friday was generally seen as a harbinger of bad news. Believe if or not, in the days before the 24 hour news cycle and instant communication everywhere, it was thought that reporting on Friday meant that many people would not notice the bad news, especially retail shareholders and customers, as well as sleepy underpaid pension fund managers. Some firms may still believe that today, but certainly not JPM. One could suggest that possible scathing media coverage on Friday and in the print media on Saturday could be moderated over a couple of weekend days.
What they must be doing is building in time for a thorough reassessment of how bad the news is, depending on the extent to which they could get slaughtered on Friday. Looking at their website, they have an earnings conference call scheduled for 7:30am, so they must be planning to release earnings as early as 6:00am. That gives time for a possible two hour conference call before the market opens.
A few firms like Alcoa, first Monday of the reporting season, stick to the same date quarter in quarter out. Most, however, retain discretion over the exact date of the earnings release although of course they announce the date well in advance. JPM's bias in recent years has been to be among the first to report among the large banks. That bias is maintained, and we will wait until this coming Friday the 13th to see what this choice really means.
One caveat to all of this speculation. There is plenty of bad news already built into JPM's stock price considering the strength of their franchise. The market overall will be the judge of whatever they report, not the short term traders or the media in general. Getting bad news out of the way can sometimes be a relief.
posted by John Borden at 12:27 PM
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