DAILY UPDATE: Abbvie, Treasuries, Gold, Copper and the NASDAQ Rally

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The yield on the 10-year Treasury rose as investors wait for word from the FOMC on Wednesday, while oil initially rose on the news of the death of the president of Iran, though it fell back down to end the day lower after succession of the presidency was settled. But investors were clearly still feeling jittery as gold hit new highs on the back of geopolitical concerns. Copper also rose to a new all-time high.

Here’s where the major benchmarks ended:

  • The S&P 500 index gained 4.86 points (0.1%) to 5,308.13; the Dow Jones Industrial Average® ($DJI) lost 196.82 points (0.5%) to 39,806.77; the NASDAQ Composite rallied 108.91 points (0.7%) to 16,794.87.
  • The 10-year Treasury note yield (TNX) increased more than 2 basis points to 4.443%.
  • The CBOE Volatility Index® (VIX) rose 0.15 to 12.14.

Nvidia’s gain helped push the PHLX Semiconductor Index (SOX) more than 2% to a two-and-a-half-month high and just under a record close posted in early March. The small-cap Russell 2000® Index (RUT) added 0.3% and ended slightly below a six-week high posted last Wednesday. 

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JPMorgan shares fell 4.5% as investors realized that they won’t have Jamie Dimon around forever—he told shareholders at a meeting today that his 5-year timetable for leaving the company no longer applies.

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After AbbVie’s Humira, the best-selling drug in the world, lost patent exclusivity in 2023, company executives placed their bets on two other AbbVie drugs, Skyrizi and Rinvoq, to make up for an anticipated steep decline in revenue.

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JAMIE DIMON: Speaks on the Economy and Artificial Intelligence

By Staff Reporters

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Jamie Dimon is bearish on a soft landing but bullish on AI

In his annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon just said that the odds interest rates return to the Fed’s target of 2% without triggering a recession are “a lot lower” than the 70%–80% chance that several markets seem to have priced in.

Dimon said JPMorgan is preparing for interest rates to possibly spike to 8% in the coming years, citing geopolitical risks, the green transition, and higher energy costs (but he’s notorious for having cautious outlooks). Artificial intelligence also topped Dimon’s list of pressing issues, and he’s “completely convinced” that AI’s impact will be “extraordinary”—maybe even as revolutionary as the printing press or the steam engine.

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CAPITAL REQUIREMENT BANK RISKS: Basel III Endgame?

By Staff Reporters

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The heads of Wall Street’s eight biggest banks will warn lawmakers today that the “Basel III Endgame” proposal will hurt the economy and hamper lending, according to each of their prepared testimonies. Regulators in July proposed strengthening regulations by requiring large U.S. banks to set aside more capital to absorb potential losses. Banks repeatedly slammed the proposal, saying this is not justified as they are well-capitalized.

The CEOs of the top banks will appear before the Senate Banking Committee today to make their case – Wells Fargo’s (NYSE:WFC) Charles Scharf, Bank of America’s (NYSE:BAC) Brian Thomas Moynihan, JPMorgan’s (NYSE:JPM) Jamie Dimon, Citigroup’s (NYSE:C) Jane Fraser, State Street’s (NYSE:STT) Ronald O’Hanley, BNY Mellon’s (NYSE:BK) Robin Vince, Goldman Sachs’ (NYSE:GS) David Solomon, and Morgan Stanley’s (NYSE:MS) James Gorman.

“The proposed Basel III Endgame rule would unjustifiably and unnecessarily increase capital requirements by 20%-25% for the largest banks,” according to Jamie Dimon’s prepared testimony. “Banks would be limited in their ability to deploy capital in the times we’re most needed, and the rule will have a harmful ripple effect on the economy.”

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UPDATE: The FOMC, Markets and Cinco deMayo

By Staff Reporters

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FOMC: The Federal Reserve approved a rare half-percentage-point interest rate increase and announced plans to shrink its $9 trillion asset portfolio starting next month in an effort to reduce inflation that is running at a four-decade high.

Markets: Stocks boomed after Fed Chair Jerome Powell spoke. Still, JPMorgan CEO Jamie Dimon pegged the probability of a recession at 33% and a “soft landing” (lower inflation, no recession) also at 33%.

And Lyft, the ride-hailing company lost nearly 30% of its value after its profit outlook came in below forecast. Uber tried to distance itself from its ailing rival, saying that it does not need to spend money recruiting drivers like Lyft does.

Cinco deMayo commemorates the defeat of French forces by the Mexican army at the Battle of Puebla in 1862, but its popularity jumped in the 1980s, when beer companies leveraged it in aggressive marketing campaigns. Now, Cinco de Mayo is a day for celebrating Mexican culture and, interestingly, it’s now more popular in the US than in Mexico.

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