Morning Coffee: J.P. Morgan's ranking of the best banks to work for now. Automating exceptional traders
Equity analysts who make calls on the best bank stocks to invest in aren't in the business of advising on the best banks to work for. They don't consider cultural differences between banks, or working hours, or promotional opportunities. However, to the extent that a bank's share price reflects the strength of its strategy, analysts' opinions on the relative merits of bank stocks are of value to job-seekers.- All the more so given that a substantial portion of bonuses at most banks are now paid in stock deferrals.
This all makes a new ranking of top bank stocks by the analysts at J.P. Morgan interesting. J.P. Morgan's European financial services analysts were rated some of the best in the industry last year. Their opinions are not to be dismissed.
In a new note seen by Financial News J.P. Morgan's analysts reportedly put American banks before European banks and Goldman Sachs before all else. Their order of preference goes: Goldman, Morgan Stanley, Credit Suisse, UBS, Barclays, and Deutsche Bank. Credit Suisse's elevated position comes despite (or maybe because of) the Swiss bank's enfeebled markets business and ongoing cost cutting. Deutsche's desultory position comes despite (or maybe because of) the new rights issue which is rebuilding its capital base. The sweet spot seems to be working for Goldman Sachs' fixed income business. - J.P. Morgan's analysts are also predicting a 34% increase in first quarter fixed income sales and trading revenues.
Separately, imagine you're an excellent trader. And then imagine that everything that gives you your edge is codified and replicated by a machine. This is what seems to be happening over at Point 72 Asset Management. Bloomberg reports that Steve Cohen's personal fund has "ramped up" its internal quant group and is scrutinizing the "DNA of trades." This genetic material includes everything from position size to risk, leverage, hedging, timing, market liquidity and duration. The aim is to replicate the trading decisions of Point 72's best portfolio managers after the fund had a dismal year. Whether the best portfolio managers will want to be replicated is another question.
The Wall Street bonus pool, tracked since 1987. (Office of the State Comptroller)
The average Wall Street bonus was up 1% to $138k last year. (Bloomberg)
Consolidation comes to high frequency trading. (WSJ)
Dublin has received 80 inquiries from finance firms thinking of setting up there after Brexit. (Reuters)
London's mayor says banks have warned him they'll need to start moving jobs as soon as Article 50 is triggered. "Those with a presence in Europe say it takes between a year and 18 months to get up and go. Others without a presence in a European city, it would take two years." (Evening Standard)
UBS is threatening to move 1,500 jobs out of London, but it only pays a corporation tax rate of 6% anyway. (This is Money)
Christian Noyer, former governor of Bank of France: "With the UK outside the EU, maintaining the hyper-concentration of EU financial activity in London would be a permanent threat to our financial stability. No other major sovereign or monetary zone would allow itself to rely as predominantly on an offshore centre." (Financial Times)
New trend on buy-side trading desks: liquidity analysis. (The Trade News)
If Marine Le Pen wins the French election French bank stocks could decline 25%. (Bloomberg)
J.P. Morgan's luring students with pop-up cafes and made to order smoothies. (CNBC)
There's a bronze chest filled with $1m of gold and gems hidden in the Rocky Mountains. (NPR)
How to get your AI algorithm noticed at Microsoft. 'He stalked the VP who could make the decision, positioning himself next to the guy in buffet lines and synching his bathroom trips to hype his system from an adjoining urinal.' (BackChannel)
How complacent are you? (Tyler Cowen)