Jp markets bonus 2021

Last modified on fri 22 jan 2021 14.18 GMT dimon is thought to harbor political ambitions and was tipped as a possible treasury secretary before the election, a position now almost certain to go to janet yellen, the former chair of the federal reserve.

Huge forex bonuses

JP Morgan boss Jamie Dimon is paid $ after decrying income inequality, jp markets bonus 2021.

JP morgan boss jamie dimon is paid $31.5m after decrying income inequality

Jamie dimon, CEO of jpmorgan chase, has said that socialism produces ‘stagnation, corruption and often worse’. Photograph: benoît tessier/reuters

Last modified on fri 22 jan 2021 14.18 GMT

Jamie dimon, the billionaire boss of JP morgan who has warned income inequality has “bifurcated the economy” in america, was paid $31.5m in 2020, the bank announced on thursday.

The news is likely to cast a harsh spotlight on a figure who has opined about the need for a more caring and equitable capitalism, yet appears to have vastly increased his fortune at a time of immense suffering due to the coronavirus pandemic that has seen millions of people plunged into poverty and homelessness.

JP morgan paid dimon a salary of $1.5m, a $5m cash bonus and $25m of restricted stock tied to performance, according to a regulatory filing. The total was the same as last year, even though the bank has enjoyed “stellar” growth in some areas, according to analysts.

In 2019 JP morgan paid dimon $31.5m, a 1.6% increase from the $31m he received for 2018. His latest pay deal comes after the bank posted better than expected quarterly results last week. JP morgan enjoyed a record fourth quarter for trading in 2020 which boosted the bank’s revenues to $30.16bn in revenue, exceeding analysts’ estimates.

Dimon, who forbes estimates has a fortune at $1.7bn, is one of a handful of billionaires who have warned that the excesses of capitalism are threatening the foundation of society.

In 2019 he told CBS’s 60 minutes that income inequality is a “huge problem” – but dodged questions about his own salary.

“last year, you were paid $31 million. Too high?”

Jpmorgan chase chairman and CEO jamie dimon says he thinks the wealth gap in america is a “huge problem,” but he passed the buck when asked about his salary. Https://t.Co/vry0mgv1pv pic.Twitter.Com/uhulrxmutb

— 60 minutes (@60minutes) november 11, 2019

In the same year, launching a $350m program to help underserved communities, dimon warned income inequality had “bifurcated the economy”.

“A big chunk of [people] have been left behind. Forty per cent of americans make less than $15 an hour. Forty percent of americans can’t afford a $400 bill, whether it’s medical or fixing their car. Fifteen percent of americans make minimum wages, 70,000 die from opioids [annually],” said dimon.

But dimon warned that socialism was not the answer, saying it produces “stagnation, corruption and often worse”.

Last year, dimon joined a glittering array of corporate bosses to tackle racial inequality. Following the police killing of george floyd the business roundtable, the US’s most powerful business lobby and an organization that dimon used to chair, announced it was forming a committee to tackle inequality.

Dimon is thought to harbor political ambitions and was tipped as a possible treasury secretary before the election, a position now almost certain to go to janet yellen, the former chair of the federal reserve.

He once claimed he would have easily beat donald trump in an election fight. “I’m smarter than he is,” he said in 2018. “and, by the way, this wealthy new yorker actually earned his money,” he said. “it wasn’t a gift from daddy.”

But he said the liberal wing of the democrat party would probably block his chances. Shortly after making the comments dimon said: “I should not have said it,” adding that the statement “proves I wouldn’t make a good politician”.

Jpmorgan's results look bad for jpmorgan's bonuses

Jpmorgan's increased revenues aren't flowing to employees

Jpmorgan has reported its fourth quarter and full year results for 2020. It won't be announcing bonuses to staff until next week, but based upon today's figures bonuses probably won't be great. - although profits at jpmorgan's corporate and investment bank (CIB) rose 43% last year, spending on compensation was up a mere 4%.

The pattern was repeated in the fourth quarter, when bonuses are typically accrued. Compensation spending in jpmorgan's CIB actually fell 18% compared to 2019.

The compensation figures are causing apprehension among jpmorgan's bankers and traders who are facing a salary freeze at vice president level and above. "as suspected, they seem to transferring money to shareholders rather than giving employees a share," says one executive director. "this benefits the share price and is good for managing directors with vested restricted stock units. There was no need to freeze salaries across the board - they could have used some of $2.9m of reserves they released to pay employees."

The squeeze on compensation comes after a record year in the corporate and investment bank. - fixed income markets revenues rose 45%; equity markets revenues rose 33%; equity underwriting revenues rose 66% and debt capital markets revenues rose 23%. Only M&A advisory revenues didn't rise by double digits - they were flat on 2019.

In notes accompanying its results, jpmorgan said credit, currencies and emerging markets traders did well in its fixed income division and that cash equities and equity derivatives traders also had a strong final quarter. The bank outlined growth plans for 2021, saying that it wants to hire bankers and advisors and to expand the asset management business and corporate and investment bank in china.

2020's excellent performance in the corporate and investment bank is not expected to continue, however. Jpmorgan said the return on equity in the CIB is expected to be around 16% this year, down from 20% in 2020.

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The UK bank that won't pay bonuses this year: "we're quite annoyed"

While people at U.S investment banks wait to be told their bonuses in the next few weeks, employees at one british bank have already had their bubbles burst: lloyds bank informed staff that they wouldn't be receiving performance-related bonuses for 2020 just before christmas.

Insiders and headhunters say the edict applied as much to people working in markets roles as to people working in the retail bank.

The decision not to pay bonuses is reminiscent of deutsche bank's move in 2017. A spokesperson for lloyds said the policy reflected the bank's "expected levels of profitability for 2020" and "in no way reflects the hard work and commitment" of its people.

Lloyds doesn't break out the performance of its sales and trading business, but when it released its third quarter results for the three months to the end of september 2020, the bank said markets income had been "resilient." insiders at the bank suggest this was an understatement: "FX, rates and credit did ok overall, but FX smashed it," said one trader in london, speaking on condition of anonymity. "some teams have had an exceptionally good year. We're quite annoyed."

One headhunter said he's receiving disgruntled calls from lloyds traders: "it seems that no one between the staff and the C-suite saw this come and people are pretty demoralised."

The decision to cancel bonuses for 2020 came as lloyds is transitioning to a new CEO. - charlie nunn is taking over from antónio horta-osório sometime mid-year after working through his six-month HSBC notice period. Insiders at the bank suggest that the bonus decision came from horta-osório, who wants to leave on a good note with investors.

One trader said the absence of bonuses will make lloyds staff targets for other banks that are hiring. In theory, the bank will mitigate the absence of performance related pay with "above inflation pay increases" for salaries. However, the spokesperson said these will be, "geared towards colleagues on lower pay."

"the initial noises we're getting is that we shouldn't get our hopes up about the salary rises," said the trader. "we should find out in february."

Bruntwood works and trafford council unveil stretford mall and town centre regeneration plan

Bruntwood works and trafford council are consulting with residents over an ambitious multi-million pound masterplan to transform stretford mall and the surrounding area.

The initial proposals are now being shared following feedback and responses collated over an extensive 15-month public consultation with the local community.

Residents are invited to provide feedback on the plans via the stretford mall public consultation website, with the consultation window open until 5 february 2021.

The masterplan, which is being put forward by the joint venture between bruntwood works and trafford council, will provide places to play, work, shop and live in stretford town centre, as part of the wider stretford masterplan and the area action plan (AAP). It includes plans for the historic king street to be reinstated to provide a thriving high street, as well as improved transport links, pedestrianised streets, more greenery and open spaces, and a reconfigured town centre with better connections to the bridgewater canal.

The plan, which covers more than 27 acres and comprises five neighbourhoods – victoria, st ann’s, lacy street, stretford centre and stretford house, also includes a phased redevelopment of stretford mall to provide an evolved retail and leisure offering to a rejuvenated king street.

The plans include repurposing the lacy street area which will unlock the connection between the town centre and the canal – an important green infrastructure and recreational route. A series of interlinked public realm spaces where residential, retail and leisure will interact with the canal and bring people into stretford from the wider area.

There are further plans to provide up to 800 varied residential units around stretford mall and st matthew’s church, which will include affordable housing.

More green meeting areas will be created with public squares and open spaces, with proposals for a green biodiversity corridor including a library square and a ‘central park’ at the heart of the town centre. Plans will also create improved access to the bridgewater canal.

With a focus on attracting more local businesses to the area, the plans include proposals to create a ‘makers yard’ hub for small independents and the evening economy, complete with outdoor seating, eateries and bar areas.

The masterplan follows three rounds of public consultation in 2020, with thousands of local residents taking part. Residents are able to provide feedback on the plans via the stretford mall public consultation website, and the planning application for the stretford mall and lacy street masterplan, the first schemes to be developed to turn the plan into reality, is due to be submitted in february 2021.

Cllr andrew western, leader of trafford council, says: “I am hugely excited by the wide-ranging regeneration plans for stretford and I know local residents also share that excitement.

“trafford council has placed regeneration at the heart of our corporate priorities. Stretford has enormous potential, making it one of the most exciting towns in the region. By sharing ideas and plans with the local community, we’ve ensured residents are at the centre of proposals for its future.

“the stretford masterplan is the culmination of a long-term collaborative partnership, and it’s a pleasure to work towards a shared vision and goals with bruntwood works and the local community. The proposals will significantly improve connectivity, create valuable green and open spaces, and hubs for people to gather and interact. It will also help attract local independent businesses and exciting retail and hospitality brands, while enhancing the lives of local residents and visitors.”

Andrea george, town centre & consumer brands director at bruntwood works, says: “one key theme to emerge from the public’s feedback is the importance of bringing back a vibrant high street, which will be the beating heart of the town. We plan to do this by reinstating king street and delivering the right blend of retail, leisure, workspace and mixed use space to meet the needs of the community, where local independents can be neighbours with exciting brands.

“green and open spaces that can safely bring people together are at the centre of our proposals. The plan will deliver a mix of leafy public squares and parks, including library square and central park, and change traffic flows around the town to make it easier and safer to get around town on foot and by bicycle, while connecting the town centre with the canal waterfront. We look forward to working in partnership with local residents, businesses and trafford council to help reinvigorate stretford town centre, and build upon its heritage so it works better for the future.”

JP morgan set for $31bn profit despite pandemic

Sources said many of the investment bank’s traders will collect a ‘competitive’ bonus at the end of the month

JP morgan, america’s biggest bank, is set to unveil annual profits of about $31bn this week after coronavirus triggered a trading boom and sent bonuses soaring.

Wall street’s results season, which begins on friday, is expected to highlight just how well investment banks fared last year as market volatility caused by the pandemic triggered a trading boom and clients raced to raise debt and equity to survive.

Despite covid triggering a recession that has left many households significantly poorer, sources said many of JP morgan’s traders will collect a “competitive” bonus at the end of this month.

Due to the economic environment, those not working in the bank’s investment banking or trading arms are in for a bonus cut, according to one insider.

Consensus estimates collated by bloomberg indicate the bank will post annual profits of $31bn despite setting aside $21bn for bad loans.

Goldman sachs, which has a smaller consumer banking arm than its rivals and is therefore less exposed to losses from unpaid loans, is due to announce full-year results next week.

The results season starts a week after some of wall street’s most powerful names, including JP morgan chief executive jamie dimon, condemned the violence caused by pro-trump extremists who stormed the US capitol building following a rally held by the president, in which he refused to concede the election.

Blackstone chief stephen schwarzman, a close friend of mr trump, said the violence was “appalling” and that he was “shocked and horrified”. Mr trump and the republicans have been big beneficiaries of mr schwarzman, who made eight trips to china in 2018 on behalf of the white house.

The republicans’ links to business now lies in peril.

“I don’t think business leaders are excited about supporting populist movements, much less those based on fake news and conspiracy theories,” said ian bremmer, founder of political risk consultancy the eurasia group. “trump may find those doors closed post-presidency.”

Morning coffee: jpmorgan's alternative to bonuses and a pay rise. The enduring appeal of working for blackrock

Jpmorgan will entertain your children

It's results day at jpmorgan and citi, the two big banks that are first with their annual results for 2020. Citi disclosed bonuses to employees already, and JPM is due to follow next week. Irrespective of what transpires, there seems to be some trepidation over JPM's bonus numbers - late last year, the bank is said to have announced that it was freezing salaries for all employees at vice president (VP) level and above, even after promotions; bonuses are therefore especially important.

Even jpmorgan bonuses are a bit limp, however, the bank has other prizes up its sleeve. As bankers in lockdown struggle with the painful combination of work and childcare, financial news reports that jpmorgan is being particularly generous with its offer of support.

In london, JPM is said to be offering its struggling parents 30 days of back-up child support, plus - if necessary - the possibility of in-home nanny care as required. By comparison, goldman sachs has said employees can use the 10 days of parental leave it granted last year until june 2021 - if they haven't used them already, HSBC is offering the vaguer panacea of 'flexible working,' and citi is offering the even vaguer crutch of 'tips on parenting.'

Given that many working parents appear to be in meltdown while they try to simultaneously homeschool children and fulfill requirements emanating from their laptops, the best parenting tip now is probably "don't beat yourself up." if you're looking for more tangible support, jpmorgan's offer seems by far the best. It's also a timely reminder that there's more to a good employer than high pay, and that banks can differentiate themselves in other ways than simply the size of their bonus pools.

Separately, if what really matters to you when you're seeking out a new employer is steady annual growth, rising pay, and a CEO who says things like assets under management are "huge, large, and eye-popping,” then blackrock might be the employer for you. The asset management firm reported its fourth quarter results yesterday, revealing a 14% in Q4 revenues and average pay per head of around $304k for its 16,600 staff. CEO larry fink is optimistic that blackrock can maintain its steady growth trajectory, despite its eye-popping $8.68 trillion of assets under management. "we're still a very small proportion of the world's capital markets," he said.

Why spacs are bigger in the U.S: " “europe simply does not have the equity capital markets that understand and price innovation appropriately." (quartz)

Trump's outgoing chief comptroller of the currency passed a rule requiring banks to lend to gun manufacturers, oil drillers and other controversial industries they've refused to do business with. (bloomberg)

Financial lobbyists have been commiserating with each other over the expected arrival of gary "the enemy" gensler as head of the SEC. “the sheriff is coming to the preeminent financial regulator in the world. It means regulation and enforcement are about to get much tougher.” gensler is known for wearing ties that are too long and having holes in the soles of his loafers. (bloomberg)

Marketaxess poached raj paranandi, global co-head of digital transformation for the global markets division at UBS, as COO for EMEA and APAC. (the trade news)

Man who quit finance to mine bitcoins full time and then came back again, has a warning for all inclined to do the same: “perhaps BTC is just a bubble driven by a frenzy of retail, and some institutional, money eager to get a piece of the action. Alternatively, and far likelier in my opinion, is that this ‘bubble’ is more fraud than frenzy." (bloomberg)

Jim simons is stepping down as chair of renaissance technologies. Unexpectedly, his son - nathaniel simons - who was expected to replace him, is stepping down too - he wants to work on projects to stop climate change instead. " peter brown, our incoming chairman, is more than ready to take on the responsibility.” (financial times)

2021 global market outlook: what lies ahead in the post-COVID-19 world?

See the key calls made by J.P. Morgan global research across asset classes and the global economy.

2020 is ending with a second wave of COVID-19, following the largest exogenous shock in modern history, extreme market volatility that was followed by an unprecedented fiscal and monetary response and a tumultuous U.S. Election cycle. This year also comes to a close with the S&P 500 hitting record highs and as credit spreads close in on their pre-pandemic levels despite the unprecedented shocks.

2021 should bring stabilization and a reset for a number of disruptions experienced this year, with front-loaded market momentum and an economic recovery to follow. J.P. Morgan global research forecasts volatile but strong global growth as economies reopen. Heading into the new year, J.P. Morgan global research analysts believe recovery, reflation and rotation against the backdrop of accommodative monetary and fiscal support will set the backdrop for key market and economic calls for 2021. “global growth will be below trend in early 2021, but the strongest global recovery in a decade will play out by the end of 2021 if the vaccine prospects play out as expected,” said joyce chang, chair of global research .

Source: J.P. Morgan forecasts

Global growth

Global GDP growth is expected to slow below trend, reaching 5.8%

J.P. Morgan chief economist bruce kasman forecasts global GDP growth reaching 5.8% and notes that optimism about 2021 global growth is building on the back of news that vaccines are now being rolled out to permanently sever the link between the COVID-19 virus and mobility. Widespread distribution of the vaccines should be forthcoming by Q321, however, kasman cautions that “the legacy is an incomplete recovery with a 2.0% output gap that is larger than any similar recovery stage at any cycle over the past 50 years.” policymakers remain committed to limiting spillovers, and there will not be a move away from accommodative monetary policy in 2021. Next year’s expansion of central banks’ balance sheets is expected to be half the size seen in 2020 and as a result, global fiscal policy should turn to a modest 1.5% drag after the 4.7% record fiscal thrust provided in 2020. Michael feroli, chief U.S. Economist , sees the U.S. Economy growing at a 2.3% pace in Q1 but expects growth to lift on the recently approved $900 billion COVID-19 relief package, with additional fiscal stimulus potentially forthcoming in 2021, although the federal reserve will be mostly out of the picture. “the fed will likely be on the sidelines for at least the next two years, while lingering labor market slack should keep inflation stuck in its 2010s range between 1.5% and 2.0%,” said feroli.

The fed will likely be on the sidelines for at least the next two years, while lingering labor market slack should keep inflation stuck in its 2010s range between 1.5% and 2.0%

Michael feroli chief U.S. Economist J.P. Morgan

Equities

S&P 500 companies hold record balance sheet cash and offer high earnings yields vs bond yields

Cash as % of total assets

Source: J.P. Morgan U.S. Equity strategy & global quantitative research, factset

S&P 500 2021 price target: 4,400

Our base case is an S&P 500 price target of 4,400 and our EPS estimate is $178 in 2021 and rises to $200 in 2022. The equity price-to-earnings multiple is expensive in absolute terms but not when low rates and reasonable growth prospects are taken into account. The largest beneficiaries will be stocks at the epicenter of the pandemic, such as consumer discretionary, financials and energy

Dubravko lakos-bujas chief U.S. Equity strategist J.P. Morgan

The financial market recovery is well advanced compared to the economic recovery, but john normand, head of cross-asset fundamental strategy , points out that some segments of equities and fixed income, commodities and currencies still remain as much as 10%, or as much as 200 basis points, cheap to pre-pandemic levels. “stocks will outperform bonds but our total return forecasts are below average for almost every fixed income sector due to low entry yields and spreads,” noted normand. J.P. Morgan strategists are forecasting above-average returns on equities (10-20% across regions) compared to small losses for fixed income (-2% on developed market bonds) or below-average gains (1% to 4% on parts of credit). For the S&P 500, equity risk premium, defined as the spread between the forward earnings yield (reciprocal of P/E) and bond yield, is currently at

3.3%, while non-U.S. Developing equity markets appear even cheaper on this metric at a 5.4% spread. The S&P 500 finished 2020 as the top-performing asset class, returning 16%, but dubravko lakos-bujas, chief U.S. Equity strategist , sees the rally continuing, supported by the economic recovery, earnings, inflows and lower volatility. “our base case is an S&P 500 price target of 4,400 and our EPS estimate is $178 in 2021 and rises to $200 in 2022. The equity price-to-earnings multiple is expensive in absolute terms but not when low rates and reasonable growth prospects are taken into account. The largest beneficiaries will be stocks at the epicenter of the pandemic, such as consumer discretionary, financials and energy.”

The technical backdrop also remains supportive, characterized by an abundance of cash and declining volatility. Marko kolanovic, global head of macro quantitative and derivatives strategy , expects $1 trillion of equity inflows/demand driven by systematic flows, hedge funding positioning, retail buying and share buybacks. He also sees a structural decline in the volatility index (VIX) to the high teens compared to the 2020 average of 28. Globally, he believes the positive drivers for equity markets are in place. Mislav matejka, head of global and european equity strategy , now recommends holding positions in eurozone, emerging markets and japan equities. “A potential rebound in relative earnings of eurozone could be on the cards, and the region could benefit from the style switch into value,” said matejka, “and japan appears well-positioned as a traditional global cycle play.”

Fixed income, currencies and commodities

Brent crude should finish 2021 at $68 per barrel

In fixed income markets, matthew jozoff, co-head of fixed income research , favors spread product heading into 2021 as fundamentals and technicals are supportive. J.P. Morgan’s 2021 year ahead U.S. Fixed income investor survey shows that ESG, high yield and high grade credit and EM are seen as the top asset classes to increase risk. Jozoff believes fixed income net issuance will remain at record levels and approach $4 trillion led by U.S. Treasuries, but the share of spread product will fall from 50% to just 30% or to $1.2 trillion compared to $1.9 trillion in 2020.

Duration supply excluding fed purchases is set to more than double in 2021 to exceed $2 trillion. Jay barry, head of USD government bond strategy , expects 10-year U.S. Treasury yields to rise to 1.25% by Q221 and to end the year at 1.45%. Steve dulake, global head of credit research , sees spreads possibly overshooting near term but ending 2021 flatter or slightly tighter across the board although current spreads (125 basis points for U.S. High grade corporates) have already tightened past january 2020 levels. Even without further spread tightening, corporate carry plus roll-down on the spread curve should generate about 50 basis points per quarter. Record cash accumulation by high grade companies in Q220-Q320 could end up being used for M&A, share buybacks and dividends instead of deleveraging. U.S. Dollar downside is likely to be limited as the great interest rate convergence of 2020 that accompanied much of this past year’s dollar weakness is now complete. EUR/USD should end-2021 near 1.18, where it has been trading in recent months.

“fundamental balance of payments positions matter more, and surplus currencies should trend strengthen,” according to paul meggyesi, head of global FX strategy . A wildcard risk for 2H21 is of an even stronger rebound in growth and inflation that could lift the U.S. Dollar on the fears of an early policy exit. Natasha kaneva, commodities strategy , sees global oil demand only reaching its pre-pandemic run-rate by mid-2022, with OPEC+ likely to stick to the terms of the existing agreement for the entirety of 2021, keeping a 1.3 million barrels per day deficit. OECD inventories won’t normalize until late 2021, boosting brent prices to $68 per barrel.

Fundamental balance of payments positions matter more, and surplus currencies should trend strengthen

Paul meggyesi head of global FX strategy J.P. Morgan

Emerging markets

Emerging markets (EM) growth is poised to rebound to 7.3% from 2.1%, led by china’s 9.2% growth providing an anchor, despite the lasting damage from COVID-19. But only a handful of north asian economies are expected to recover to J.P. Morgan’s pre-pandemic projections while EM high yield economies should end 2021 at an average 5.0% in GDP shortfall relative to pre-pandemic projections. There are even larger shortfalls in parts of latin america and southern asia. However, according to luis oganes, head of currencies, emerging markets and commodities , “EM valuations remain attractive and EM assets are under-owned compared to global asset classes. 2021 returns for EM fixed income across EM FX local bonds, sovereign and corporate credit, should be in the 4-5% range, while EM equities could gain as much as 20% over developed market equities.”

Turning to alternative asset classes, bitcoin has gained a following with millennials who see it as an “alternative” currency competing with gold, while corporate support has been growing via square, microstrategy and paypal. Nikolaos panigirtzoglou, senior global markets strategist , believes that the adoption of bitcoin by institutional investors has only begun compared to holdings of gold and sees bitcoin’s intrinsic value rising significantly over the coming months as mining activity improves although near-term risks are skewed to the downside.

EM valuations remain attractive and EM assets are under-owned compared to global asset classes. 2021 returns for EM fixed income across EM FX local bonds, sovereign and corporate credit, should be in the 5-6% range, while EM equities could gain as much as 20% over developed market equities

Luis oganes head of currencies, emerging markets and commodities J.P. Morgan

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Where will jpmorgan chase be in 1 year?

There are many unknowns facing banks in 2021.

Given the current economic environment and analyst projections that there won't be much significant change in that environment a year from now, the banking sector will likely continue to face challenges in 2021. The recession could continue given the uncertainty related to the COVID-19 pandemic. Interest rates will remain low and will probably be in the 0% range, as the federal reserve has indicated. These two factors alone don't bode well for an industry that largely moves in tandem with the country's GDP and interest rates.

But if there is an outlier among the major U.S. Banks during this current time of uncertainty, it would be america's largest bank, jpmorgan chase (NYSE:JPM) . Jpmorgan has been the best-performing big banks over the past decade-plus, including the great recession, and has outperformed its competitors in several key metrics during the current recession.

So, where will jpmorgan chase be this time next year?

Image source: getty images.

Provision for credit losses

Jpmorgan chase just released its third-quarter earnings report, and it was a relatively strong one. The bank beat earnings estimates with net income of approximately $9.4 billion, or $2.92 diluted earnings per share, up 4% year over year. The company generated $29.9 billion in revenue, about the same as the third quarter of last year. Compared to the second quarter, jpmorgan's net income more than doubled, up 101%.

A big reason for that is a huge reduction in the bank's provisioning for credit losses. The bank set aside $611 million in the quarter, compared to about $10.4 billion last quarter. The third-quarter provision is even less than it was a year ago when it was $1.5 billion. This was a key driver for earnings. Net charge-offs -- debt unlikely to be collected -- were down $191 million year over year in the quarter to $1.2 billion.

But is this drop in credit allowance a reprieve due to the government stimulus plan this spring? Will it result in a temporary improvement in credit quality that will eventually get worse, particularly if there is no second stimulus? While the stock market has bounced back, unemployment remains high and GDP growth is contracting.

An indication that the provision of credit losses will remain manageable for jpmorgan is its loan-to-value ratio (LTV), particularly among its mortgage loans, chief financial officer jennifer piepszak explained on the third-quarter earnings call.

"and when you look at the LTV on those -- the loan to value on those loans [mortgage], that's what is embedded into how we're thinking about the -- what charge-offs will look like in the near term. There's still very healthy ltvs on those loans," piepszak said on the call. She added that she doesn't expect net charge-offs to change much until the back half of the year, but that will be more related to credit cards. This would indicate that allowance for credit losses will remain manageable for JPM, at least in the near term.

The economy, COVID-19, and the election

The fortunes of banks are very dependent on economic growth, and that picture remains clouded by the U.S. Presidential election and the COVID-19 pandemic.

It's not only uncertain who will win the election and what effect that will have, but there is also uncertainty about whether or not there will be a contested election or how long that may drag out. One thing we've learned is that anything is possible, considering where we've been. And some of these scenarios won't help the markets or the economy.

The other huge unknown is what happens with COVID-19. There's probably no single factor that will affect the economy more next year. Until safe and effective treatments become available -- whether it is one month, six months, or a year from now -- it's unlikely that a real recovery will begin. Goldman sachs economists predicted in august that a vaccine will be widely distributed by the end of the second quarter of 2021 and projected annual GDP growth of 6.2%, based on that assumption. In may, the congressional budget office projected GDP growth of 4.2% in 2021.

As for jpmorgan chase, its "fortress balance sheet" should serve it well through any scenario, just as it did through the great recession. It increased its common equity tier 1 (CET1) capital to $198 billion for a CET1 ratio of 13%, which is up 60 basis points. It also increased its liquidity sources to $1.3 trillion. It has the best capital position among the major U.S. Banks. It also has the best efficiency ratio of the four major banks at 58% and the best return on equity at 15%.

Mergers and acquisitions

Industry consolidation has been stalled by the pandemic, but there has been a slight uptick in deals in recent months. There have been only 91 deals this year, compared to 257 in 2019, but there were 14 in september, which is the most since january of 2020, according to S&P global (NYSE:SPGI) .

There may be some pent-up mergers and acquisitions activity in 2021, and jpmorgan could certainly be a key player. Jpmorgan chase CEO jamie dimon said on feb. 25, before the full effect of the pandemic, that jpmorgan was looking for deals.

"we are looking, and we will be much more aggressive with acquisitions across the board," dimon said at the bank's annual investor meeting. "I do think we'll have opportunities to do that."

Dimon was asked again on the third-quarter earnings call, and he reiterated the sentiment:

"well, since we have you all on the line, our doors and our telephone lines are wide open. We would be very interested, and we do think you will see consolidation in the business but we're not going to be more specific than that . There are a lot of issues that will determine whether something makes sense for us in there."

An acquisition between now and the end of 2021 is certainly in play for jpmorgan and could certainly affect the trajectory of the company a year from now.

There is a lot of uncertainty in the next year, but what won't change is the strong management and market position of jpmorgan chase. It will likely outperform its peers over the next year, due to the financials discussed above, and be the best-positioned for the long term.

FSCA (FSB) regulated forex brokers

South africa is the most industrialized and technologically advanced country in africa. It is also home to the second-largest economy measured by GDP and the only G-20 member from africa, and one of the five members comprising BRICS.

South african forex traders do not have to trade with FSCA regulated brokers, and all international brokers accept traders from south africa. Regulated forex brokers in south africa provide domestic traders with protection against bankruptcies, scams, and fraud. While it sounds appealing, the best way to avoid those is by trading with well-established international brokers. A growing number of them acquire FSCA licenses, as south africa presents a growth market and excellent regional headquarters for expansion plans across africa.

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What is the FSCA (formerly FSB)?

The financial sector conduct authority (FSCA) is the current financial regulator of south africa. It superseded the financial services board (FSB) effective april 2018, following its creation in august 2017 via the financial sector regulation act (FSR act). The FSB was formed as a result of the van der horst committee in 1990 to create an independent regulatory and supervisory body for the non-banking financial sector. The financial advisory and intermediary services act (FAIS) of september 2004 expanded the FSB responsibilities to include market conduct in the banking sector, creating a super-regulator in south africa. With the financial intelligence centre act (2001), last updated in april 2019, the FSB received a mandate to combat money laundering.

The south african minister of finance appointed the chairman and members of the FSB. The executive officer also served as the registrar of non-banking financial institutions, including south african forex brokers. While south african forex traders are not legally required to trade with FSB regulated forex brokers, it was encouraged to increase their protection. An additional four deputy officers oversaw the financial advisory and intermediary services, retirement funds and friendly societies, and insurance and investment institutions. As a super-regulator, the FSB ensured all banking and non-banking firms in south africa complied with applicable rules and regulations, adhered to capital requirements, and promoted financial stability to protect the domestic investment sector. I was a member of the international organization of securities commissions (IOSCO), participated in the southern african development community (SADC) activities, and maintained a close working relationship with the committee of insurance, securities, and non-banking financial authorities (CISNA).

Failure to comply with FSB regulations, misconduct, and other violation resulted in enforceable fines that carried the same weight as a judgment of the supreme court of south africa. The august 2017 financial sector regulation act (FSR act) split the super-regulator into two entities, following developed market models. It resulted in a prudential authority (PA) with oversight of the banking sector, insurance companies, cooperative financial institutions, financial conglomerates, and select aspects of the capital market infrastructure. The financial sector conduct authority (FSCA) received a mandate to regulate financial products and services. It also oversees financial institutions with licenses granted under financial sector laws, including banks, brokers, pension funds, insurers, administrators, and the associated infrastructure. South africa aimed to increase the trust and stability of its financial system following failures by the FSB. The dual model consists of a prudent supervisor and a market conduct regulator to improve efficiency and effectiveness. Not enough operational history exists, with just over two years under the new model, to accurately assess the success or improvements of the PA and FSCA.

Why trade with FSCA brokers?

Failures and disasters of the FSB, primarily in the south african pension fund sector, resulted in heavy losses. It led to a cratering in confidence in the stability and reliability of domestic financial markets. Accusations of the south african financial services sector against the FSB included favoritism and excessive fees for legal and administrative services. Some companies labeled their interactions with the FSB as unusual, harsh, and even bizarre. In march 2019, the public protector, one of six independent state institutions under the south african constitution to protect democracy, outlined a series of failures by the FSB over a decade. The FSCA, on track to rebuild trust in the south african financial sector since its creation, counters claims of incompetence by the FSB as inaccurate. While the FSCA has a challenging task, it started to promote a deeper understanding of financial markets. The FSCA maintains the financial stability of the south african financial sector. It also assists in its development and openly communicates regulatory changes to the public.

In south africa, all derivatives, including contracts for differences (cfds) for the forex markets and other sectors, remain regulated as derivatives & non-banking financial products by the FSCA. Trading with regulated forex brokers in south africa ensures that local courts enforce domestic laws to resolve disputes and prosecute misconduct. All FSB-regulated forex brokers are now FSCA-regulated ones. While there are not many south african ones, a growing number of international brokers acquire an operating license from the FSCA. It requires that a local office exists, together with at least one south african director. A global broker with an FSCA license may accelerate its market share in africa’s most industrialized nation and second-largest economy measured by GDP, trailing only nigeria. The FSCA continues to evolve but misses an investor protection fund similar to the UK financial conduct authority and its financial services compensation scheme (FSCS) or the investor compensation fund (ICF) of the cyprus securities and exchange commission (cysec).

FSCA (FSB) regulated forex brokers in south africa offer domestic traders security and protection against bankruptcy, fraud, or malpractice by brokers. It does sound appealing, but well-regulated international brokers generally provide a superior framework, diminishing the necessity of an FSCA-regulated one for south african traders. The choice of brokers with an FSCA license remains limited, and most traders should seek the best forex broker to trade with and not place the most significant emphasis on the FSCA. Each trader must conclude the importance of domestic regulation, but well-established international choices provide superior trading environments, and the FSCA or another regulator becomes a byproduct. Rather than seeking FSCA (FSB) regulated forex brokers in south africa, forex traders should focus on registering with a trustworthy broker. I recommend over five years of operational experience and a spotless regulatory track record. Regulation remains necessary, and traders should avoid unregulated brokers, but FSCA regulation, even for south african traders, is not the most defining aspect.

How to verify if a broker is FSCA-regulated

Most regulated forex brokers in south africa who claim FSCA regulation usually have one. I always recommend all traders to double-check and confirm with the cited regulator. The forex industry is home to many scammers and fraudsters, and they maintain an excellent online presence to attract new retail traders. They pry on the lack of their knowledge and deploy attractive bonus campaigns and other marketing gimmicks to mask their intentions. Verifying if a broker is FSCA regulated is simple and takes less than a minute. The FSCA maintains a database labeled authorised financial service providers. The design is dated, and the user-experience not as friendly as it should be. Since traders will only spend a few moments there, it suffices to confirm the existence of regulation.

All regulated forex brokers in south africa have a financial services provider (FSP) number. Traders can locate it at the bottom of the homepage. A missing FSP number represents a red flag. Confirming a broker’s status with the FSCA is most convenient via an FSP search (or what some might call an FSB license check) on the FSCA website. After entering the five-digit FSP number and clicking submit, a new page will load with the search results. Traders can get more information by clicking on details. I also recommend checking the products approved category, the last one available under details. Since forex cfds fall under the category of derivatives & non-banking financial products, brokers must have authorization for derivative instruments and forex investment, for which four options exist.

Over-the-counter derivative provider (ODP) license

All FSCA (FSB) regulated forex brokers in south africa must apply for an over-the-counter derivative provider (ODP) license. The new requirement came into effect in 2019. The FSCA aims to increase the stability and transparency of the south african financial system. Therefore, all forex brokers have to implement new rules. Before accepting new traders, brokers must complete due diligence and assess if the prospective client understands the risks involved in trading the volatile forex market. During the process, new traders must provide proof that they have adequate capital to trade. Brokers must also report every transaction to regulators to force open opaque transactions and promote transparency.

The board of directors must approve the business plan and adhere to principle 7 of the king IV report on corporate governance for south africa (king IV). They must also establish an audit and risk committee, per principle 7 of king IV. Each broker must have sufficient capital and liquid assets to operate for six months, allowing enough time for an orderly wind-down of operations in case of default. A funding plan to raise funds in the event reserves fall below the requirement to cover operating expenses must equally exist. Brokers must submit details of provided services and assets. They also have to provide proof of the qualifications of the management team and essential personnel. All key staff must have direct employment with the broker or possess disclosed legal service agreements. Another requirement to receive the ODP license is evidence of the segregation of client capital from corporate funds. Brokers must also submit a description of the onboarding process of new clients.

South africa and the FSCA complies with G-20 efforts to limit the risk of over-the-counter (OTC) trading activities by enforcing the over-the-counter derivative provider (ODP) license. Regulated forex brokers in south africa who fail to apply for the ODP license may face prompt liquidation at the request of the FSCA. The first such case was JP markets (pty) limited, which was liquidated in september 2020 and had its bank accounts frozen. With the implementation of the ODP license, south africa remains proactive in providing security, transparency, and stability of its financial markets. As south africans trust their infrastructure and financial institutions, more capital will flow into financial products. It will assist the creation of more domestic forex brokers and increase international competitors acquiring an FSCA license. The ultimate beneficiary is south african forex traders due to more competitive choices from brokers with a local office.

Additional FSCA protections for forex traders

The FSCA monitors the domestic forex market to ensure that FSCA-regulated forex brokers comply with rules and regulations. It also tries to identify scams, weed out fraud, and protect south african forex traders from avoidable losses. Through the FSCA FSP search, traders can confirm if their broker maintains regulation from the FSCA. Traders must know that there is no requirement to trade with an FSCA-regulated broker and that international forex brokers do not require a license to accept traders from south africa.

Besides the FSCA FSP search tool, another beneficial service is the media release section of the regulator’s website, where it updates on fraudulent brokers and provides information about them. While south african forex traders can trade where they wish, and no international broker has restrictions against this G-20 member, checking the media release of the FSCA can provide useful information and protect against scams and fraud from a domestic player operating on a global scale.

FSCA strategy & structure

The south african national treasury oversees the FSCA, located in pretoria. Its mandate is to 'enhance the efficiency and integrity of financial markets; promote fair customer treatment by financial institutions; provide financial education and promote financial literacy; and assist in maintaining financial stability.’ the FSCA consists of several divisions, overseen by the board, its commissioner, and deputy commissioners. While the FSCA elects its commissioner, the minister of finance appoints the deputy commissioners. It grants more freedom than under the FSB, where the finance minister appointed all members. The support infrastructure consists of the chief risk officer, general counsel and media liaison officer. The FSCA ensures cooperation between entities and can order fines, penalties, and liquidations with the same power as the south african supreme court. The FSCA also maintains a customer complaint service and a self-policing appeals board.

The strategy of the FSCA consists of ensuring that all regulated forex brokers in south africa treat all clients equally and fairly. In case a client feels mistreated, a system exists, defined by law, to resolve the process. Brokers must make this process available or face regulatory and legal actions. The FSCA also demands that forex brokers must provide written material that does not confuse clients. Brokers must provide educational content and offer detailed descriptions of their services and products. The FSCA maintains a framework for south african traders to receive education, transparency, detailed information about products and services, and alerts to scams or frauds affecting the domestic market. It also strives to improve the efficiency and integrity of the south african financial markets. The FSCA additionally promotes competitiveness and fairness, maintains financial stability by supervising registered entities, and enforces rules and regulations.

FSB battling corruption & fraud

Despite the widespread popularity of forex trading and the accelerating demand from south african traders to take advantage of the profit potential, direct and indirect, of the largest and most liquid financial market globally, it remains in the early stages not just in south africa but across africa in general. There is a lot of misinformation, mis-marketing, and false claims concerning forex trading, inviting corruption and fraud. The FSB fought both for over 25 years until the FSCA took over. Scammers target new traders following misleading advertising campaigns, often deployed by fraudulent brokers. Ideal conditions for fraud exist amid forex opportunities, low entry requirements, and demand from new traders. The FSCA tries to take a proactive stand and informs the public of all known scams, uncovered fraud, and brokers or individual actors responsible for them.

While south africa is the most industrialized nation in africa and the second-largest economy, it is also an unequal society. Economic issues present a grave challenge, and many look to the forex market to improve their conditions. South africa makes slow progress addressing the problems, and as the situation improves, the increased income levels will find a home in forex trading accounts. The conditions for growth in the sector are excellent, which is why many international brokers acquire an FSCA license, establish a local office, and expand their staff. Unfortunately, the inflow also attracts fraud, but the FSCA appears to have control over the situation.

With education being an essential requirement for FSCA regulated brokers, more south africans can receive the necessary knowledge to identify corruption, fraud, and scams. Since the forex market has low capital entry requirements and high leverage, many who open trading accounts are motivated by theoretical profits. Even brokers use this to their advantage and create marketing campaigns to attract first-time depositors. With the abundance of misleading information, the most superior weapon the FSCA has remains education. It will combat unrealistic profit claims from small one-time deposits in highly leveraged accounts with no-to-minimal risk management. The FSB failed to protect all participants in the south african financial markets, but the FSCA enjoys a more capable position. It exists for just over two years and requires more time but shows promise in delivering its mandate.

Which FSCA (FSB) forex broker has the lowest fees?

Traders can usually find the lowest fees at established brokers with deep liquidity and superior technology infrastructure. International forex brokers provide a more competitive trading environment, including the lowest trading costs. Some acquired a license, and their local subsidiaries are FSCA (FSB) forex brokers.

Which FSCA- (FSB) regulated brokers offer ZAR trading accounts?

ZAR trading accounts are rare, and traders should avoid them. While they may sound appealing for deposits and withdrawals, traders will face currency conversion costs on almost every transaction. Since clients place significantly more trades than other financial transactions, a trading account in US dollars or euros makes more economic sense and reduces total trading costs.

Who are the best FSB forex brokers in south africa?

The best FSCA (FSB) forex brokers in south africa are international brokers with an FSCA license. Domestic brokers cannot compete with the products and services portfolio of well-established international competitors.

Do south africans have to trade with FSCA-regulated brokers?

No, south africans do not have to trade with an FSCA-regulated broker. All international brokers accept south african traders, giving them broad choices with industry-leading providers.

What are FSB brokers?

FSCA (FSB) brokers are brokers with an FSCA license, an office in south africa, and at least one south african director. An FSCA (FSB) license check can confirm the regulatory status of a broker.

Should I trade with an FSCA-regulated forex broker?

While the choice depends on individual preferences, most international brokers provide superior trading environments through lower costs, broader asset choices, enhanced trading platforms, higher quality research and education, and more experience. Therefore, south african forex traders can trade with a competitive edge at non-FSCA-regulated brokers.

How do I know if a forex broker is regulated by the FSCA?

The FSCA maintains an FSP search function. Each regulated broker has a unique FSP. I recommend traders use the FSCA FSP search tool to confirm a broker’s status with the regulator.

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