Morning Coffee: JPMorgan's unwanted MD becomes expert in Trump's body language. ECM bankers have nothing to do

Marko Kolanovic was a managing director at JPMorgan. He had a career there that lasted nearly two decades until he was rudely ejected last July for his persistent pessimism as chief global markets strategist. These days, Kolanovic has a new gig pushing his punditry on X, where he describes himself as Gandalf, among other things. 

Click here to follow our WhatsApp channel, and get news updates straight to your phone 📱.

As Gandalf, Kolanovic has a new way of predicting markets: very close observations of President Trump's behaviour. It's the ultimate in fine-tuned human observation and probably can't be replaced by AI. 

Speaking to Bloomberg yesterday, Kolanovic said his observations of Trump's body language suggest that tariff capitulation is coming as Trump apprehends that the tariffs are not only bad for the economy and the markets, but bad for Trump himself. 

It's not clear what body language Kolanovic is referring to, but reading the runes of a downcast eye or slumped shoulder is the new edge in predicting markets. Yesterday's momentary 3.4% increase in the value of the S&P, which added $2.4 trillion to the value of stocks based on a false rumour that tariffs were being paused from anonymous X account Walter Bloomberg, revealed the potential for a huge bounce if Trump capitulates. 

“This crash is a one man-made problem,” Kolanovic told Bloomberg. Reading that one man's behaviour is the new edge. Maybe JPMorgan will want Kolanovic back again on this basis. 

Separately, five years ago, Hong Kong bankers with nothing to do were hiking in the mountains and taking selfies for posterity. Since then, people everywhere have been commanded to return to the office, where the equivalent might be hiking back and forth between the coffee machine and printer. 

Equity capital markets (ECM) bankers who thought they'd be busy on actual IPOs this year are finding that they are not. Deals that were supposed to happen (Klarna, Stubhub, Medline), aren't, and senior (and presumably junior) ECM bankers are spending a long time making cappuccinos. 

Speaking to Bloomberg, Keith Canton, JPMorgan's head of America's equity capital markets, said there's now a sense of "paralysis" among both companies and investors. Cully Davis, Citi's head of growth equity, said the notion of an IPO is now "pretty much off the table for most rational people."

What's an ECM banker to do? The same as they've been doing for the past few years, when IPOs were also hard to come by. Making themselves busy with other, less remunerative alternatives like private placements is the best option. “An IPO may be Plan A, but we really need to start thinking about Plan B at least as an alternative,” said Cantor. Unfortunately, this implies that all the work that's already been done for Plan A is unnecessary - until Trump's body language changes. 

Meanwhile...

"So we bounced 8% on a fake headline, sold off when people realized it was fake, and then bounced again when it occurred to people that if we bounced that much on a fake headline imagine how much we’d bounce on a hypothetical real one." (Financial Times) 

Trump himself is muddling the message: “There can be permanent tariffs and there can also be negotiations because there are things that we need beyond tariffs.” (Bloomberg)  

No one likes Howard Lutnick. - The ex-Cantor Fitzgerald chief executive has come to frustrate executives and senior White House officials. People are exasperated by his "browbeating" to support tariffs, plus he's mused about running for president himself. Lutnick says he and Trump used to party together at Studio 54. (WSJ) 

“You can smell the fear of both the downside and missing out on a rally.” (Bloomberg) 

It's a good time to be a trader. Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup are collectively expected to report about $34.5bn in revenues from equities and fixed income trading for Q1, up 10% on last year. (Financial Times) 

Big bank stocks were down 19% yesterday. (Bloomberg) 

UBS has begun asking senior investment bankers to draw up lists of employees who could be included in potential cutbacks. (Bloomberg) 

Ken Griffin is the "whale's whale" when it comes to property purchases, spending $50m+. “I don’t think you’re going out and assembling half a billion dollars worth of land because you think it’s a great investment. I think these guys are just doing what they want to do, because they can do it. Whether they make money or lose money, they don’t seem to care.” (WSJ) 

"If the 5-dimensional chess narrative of Trump doom takes hold, it will likely start with the Treasury market and the interest rate." Treasury market dysfunction could force the Fed to step in and rather than bolstering America’s centrality as the safe haven in a storm, the Fed’s action would trigger a fall in the value of the dollar.  (Adam Tooze) 

American exceptionalism — a higher dollar, weaker bonds and US stocks beating the rest of the world — was hard-baked in to hedge funds’ strategies at the start of this year and still in the process of being unwound. There is the potential for things to go very wrong. (Financial Times) 

Senior people at Bank of America, Barclays, Citi and HSBC Holdings held a call on Sunday to discuss the ongoing chaos as plunging equity markets reflect fears of a worldwide recession. (Sky) 

Friends asking me whether this feels like 2008. 
The difference is that over the weekend in 2008 the government was genuinely trying to stop the crisis.

— Athanassios Diplas (@AthanaDiplas) April 6, 2025

1987: portfolio insurance. Ignored feedback.
2008: credit. Ignored correlation.
2025: 🙈🙉. Ignore everything.

— Emanuel Derman @emanuelderman.bsky (@EmanuelDerman) April 5, 2025

 Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libellous (in which case it won’t.)