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Two Ways: New Changes Threaten Bank Earnings


Strengthen your portfolio in good times and bad.

A study by JPMorgan Chase (JPM) says global regulatory changes, as a result of the financial crisis, are likely to cut into long-term profits at US and European investment banks by nearly one-third. According to the Financial Times, JPMorgan is taking a very pessimistic view of the impact of the reforms, which will include tougher capital requirements and rules for trading, as well as push derivatives onto exchanges. Banks will also be forced to cut bonuses and staff due to the decline in profits, the study said.

See the related article, Vitaliy Katsenelson's Where's the Upside in American Express?

From the Bull Pen: Bulls can look elsewhere. See General Dynamics (GD) breaking out of a 10-month range. One can set a sell stop 2% below entry.

From the Bear Cave: For banking bears, consider whether American Express (AXP) is tracing out a head & shoulders top. Those playing the downside can set a buy stop above $34.50. The pattern may be appearing on the financial ETF (XLF) as well. A buy stop can be set above $14.80 for those considering that play.

Quick Check Around the World

Asian trading closed with the Nikkei -0.78%, India 0.37%, Hang Seng -1.04%, Shanghai 0.54%, and Taiwan 0.87%.

Across the pond, we see the FTSE 0.50%, CAC 0.28%, DAX 0.50%

As of 8:05 a.m. EST, S&P Futures are trading +0.000 to 1025.00 and Nasdaq futures are -0.250 to 1655.00.

A Look at Commodities

Over in commodities, crude oil is -0.09 to 71.01 while gold is -1.70 to 998.10 this morning. Silver is -0.14 to 16.37 and copper -1.450 to 292.00.

The dollar index is -0.1000 to 77.2400.

On the Radar


10:30 Crude Inventories
02:00 Fed's Beige Book

Click here for the full trading radar.

Already Hump Day! Good luck!
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No positions in stocks mentioned.

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