Time To Cash Out Of JPMorgan

As JPMorgan Chase (NYSE: JPM) readies itself to announce its 3rd quarter earnings on Oct. 13 at the close of trading, recent news for the company has been troubling. JPM has been embroiled in investigations from both Chinese and U.S. regulators regarding its overseas hiring practices. At the same time, a weak Sept. 2015 jobs report released on Oct. 2 by the Bureau of Labor Statistics indicates the Federal Reserve is unlikely to raise interest rates, resulting in potentially flattened stocks for the company as well as other banks.

Regulatory Investigation

In September, Wall Street Journal reported that the head of JPMorgan’s Chinese branch encouraged the hiring of the children of executives for competitive internships. This led to regulatory investigations into whether the company was engaging in such hiring practices in order to gain a stronger foothold in the Chinese market.

Weak Jobs Report

Following the jobs report, stock prices for JPM fell by 1 percent on Friday. JPMorgan did receive some good news on Oct. 1, when they won a decision in the $8.6 billion lawsuit filed against them by creditors of Lehman Brothers Holding, Inc. Despite this news, however, the weak jobs report appears to have had much more impact on the company’s stock prices.

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Comparison to Competitors Morgan Stanley and Wells Fargo

Other large banks are also showing the effects of the jobs report. On Oct. 2, Morgan Stanley (NYSE: MS) hit a 52-week low on its share price on Friday, falling 4.3 percent to close at $30.15, down from $31.50 on Thursday at the close of trading. Morgan Stanley recently underwent a reshuffling of corporate executives, with Dan Simkovitz being moved from his position co-leading the company’s global capital markets to a position as president of Morgan Stanley Investment Management, or MSIM, the company’s traditional assets, merchant banking and alternative investments branch. Greg Fleming, the former leader of Morgan Stanley Wealth Management and MSIM, will now be in charge of growing the company’s wealth business.