|Instrument:JP MORGAN CHASE|
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Headquartered in New York, JPMorgan Chase & Co. (JPM) was founded on December 1st, 2000 following the merger of J.P. Morgan & Co and Chase Manhattan Corporation, in an all-stock deal.
The company brought together companies with a storied heritage in American banking history. At the time of the merger, JPM became the second most valuable company in America, with assets totalling around $650 billion.
As of September 2020, JPM stands as the largest bank in the US by assets, and the largest in the world by market capitalisation.
The 2000 deal was the culmination of a history full of mergers, especially on the ‘Chase’ side. Just four years earlier, in 1996, the Chase Manhattan company was acquired by Chemical Banking, with the latter opting to continue the more prestigious ‘Chase’ brand.
Chase Manhattan was itself a product of a 1955 merger between Chase National Bank and the Bank of Manhattan, two companies with roots going as far back as the 18th century.
The ‘Morgan’ side of the bank traces its roots to J.P. Morgan and Company, Inc. that was founded in 1895. In 1959, the company merged with the Guaranty Trust Company of New York, that was founded in 1864.
By the end of the 20th century, J.P. Morgan & Co. had become one of the most respected blue-chip investment banking institutions in the world, whereas Chase Manhattan had a massive footprint in retail and consumer banking. The deal had obvious synergies and has, by all accounts, turned out well.
JPMorgan Chase & Co. now operates as a worldwide financial services company that serves its customers through four major business segments: Consumer & Community Banking; Corporate & Investment Banking; Commercial Banking; and Asset & Wealth Management.
The company is listed on the NYSE, where it trades under the ticker symbol JPM. It is included in the Financial Services sector, under the Banks-Diversified industry.
JPM Stock History
JPM has had four stock splits in its history, but none (yet) since the December 1st, 2000 mega-merger. Adjusted for splits, the JPM stock traded below $20 for a long time since the 1980s but received tailwinds in the late 1990s as banks took full advantage of offering financial services to the exploding tech industry.
The stock broke above the $20 barrier in late 1995 and sustained a rally that took out the psychological $50 price by July 1998.
After a brief retracement, the stock gathered pace and managed to print a high of circa $65 in March 2000. The turn of the millennium saw the stock selloff to lows of below $20 by September 2002.
The stock then posted a gradual recovery that printed a high of just above $50 by May 2007, before the effects of the 2008 global financial crisis triggered a plunge to lows of below $20 by March 2009.
The subsequent recovery of economic conditions saw the stock comprehensively break above $50 in March 2013 and sustain a multiyear rally which printed JPM’s all-time high of circa $141 in January 2020.
The coronavirus inspired economic shutdown then pressured the stock to below $80, but a rebound pushed JPM towards $100 as of September 2020.
JPMorgan Chase & Co. has been a consistent dividend payer. The company pays quarterly dividends and has averaged a dividend yield of about 4%. Dividend-paying stocks, such as JPM, appeal to investors who like periodic incomes from their portfolio.
Still, dividend-paying stocks are usually known to deliver lesser price gains over the long term compared to non-dividend paying stocks.
How to Trade JPM Stock
JPM is one of the largest financial institutions in the world. Here is what to consider when trading its stock:
- Legislative and Taxation Policy
The banking industry has seen more regulatory oversight in recent years, particularly after the 2008 financial crisis. The crisis was triggered by massive deregulation in the financial industry, and governments will be keen to ensure that this never happens again. This means that industry targeted legislation and taxation policies will have a massive impact on the company’s operations.
- Monetary Policy and Economic Conditions
Bank stocks, such as JPM, are very sensitive to underlying economic conditions and the prevailing monetary policy. Strong economies trigger higher prices, whereas weakening economies trigger lower prices. In terms of monetary policy, higher interest rates are profitable for banks and will inspire higher stock prices, whereas rate cuts will usually provide headwinds for the stock.
- Lawsuits and Negative PR
JPM has had to deal with multiple controversies throughout its history. In recent years, the bank has been accused of sanction violations, the Madoff scandal, manipulation of the energy market, mortgage overcharging, conflict of interest on investment research, as well as a breach of the Truth in Lending Act. Lawsuits and negative PR usually pressure the stock lower.
- New Product Rollout
Banks release new products from time to time. For JPM, investors will particularly be interested to see whether a new product will generate profits or expose the company to unnecessary risks.
- Periodic Earnings Reports
JPM’s fiscal year runs from January to December, and the company releases quarterly and annual reports that give investors and shareholders an insight into the health of its business as well as future prospects. Generally, upbeat numbers inspire higher prices, whereas downbeat figures trigger lower prices.
** Disclaimer – While due diligence, care and research has been undertaken to compile the above content, it remains an informational and educational piece only. None of the content provided constitutes any form of trade or investment advice or recommendation and should not be construed as such.
Friedberg Direct JPM Stock Trading Information
- MT5 Symbol: #JP_MORGAN
- Trading Hours: Monday – Friday (GMT) 13:30 – 19:59
- Country: US
- Currency: USD
- Exchange: New York Stock Exchange
- Typical Spread: 0.13%
- Units: Share
- Minimum Trade Size: 10
- Leverage: 3.3:1
Why Trade JPM Stock with Friedberg Direct
Here is why you should trade JPM stock with Friedberg Direct:
- Local Regulation
Friedberg Direct is fully regulated in Canada. Enjoy the peace of mind when trading with a locally regulated Canadian broker.
Friedberg Direct offers leverage of up to 3.3:1 when you are trading JPM stock. Capitalise on trades even on marginal price movements.
- Go Long or Go Short
Trade JPM stock as a CFD and take advantage of both rising and falling markets.
- Trading Conditions
Trade JPM stock with transparent pricing, competitive spreads and fast execution on all order types at all times.
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Disclaimer: Please note these are stock CFDs (Contracts for Difference)
When you enter into a CFD trade you don’t buy the actual stock itself but instead agree on a contract with the broker to settle the difference in value between the entry and exit price of the Stock based on the price the stock is trading at on the Exchange it is listed. That means when you trade Stocks CFDs with Friedberg Direct you get a flexibility that stock market rules often make very difficult or even impossible for some.