A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
JPMorgan Chase & Co. CEO Jamie Dimon apparently believes that only bad investors want to limit his pay, in a remarkably tone deaf display of hubris.
"God knows how any of you can place your vote based [proxy advisors], " Mr Dimon said at the Sanford C. Bernstein & Co. investing conference. "If you do that, you are just irresponsible, I'm sorry. And you probably aren't a very good investor, either. And you do. Believe me. I know some of you here do it, because you're lazy."
It's not so much the sentiment here that bothers me – there are many finance professionals who believe, with justification, that proxy consultants are running amok – it's the lack of judgement in expressing this view at a time when anti-bank sentiment is so high. As many have pointed out, the FBI has managed to arrest international soccer officials in Switzerland while leaving domestic bank executives alone.
"Dimon hits out at 'lazy' shareholders" – Financial Times
Quarterly reports from Toronto-Dominion Bank and Royal Bank of Canada went in decidedly different directions this morning. Restructuring charges for TD resulted in a seven per cent year over year decline in quarterly earnings, while RBC generated profit growth of 14 per cent.
Analysts maintain very conservative growth targets for banks this year and there has been some skepticism – some from me – regarding the banks' mid-term profit outlook. In the short term, bank earnings should be supported by big cheques for investment banking departments, but the interest rate environment remains a problem and even the Bank of Canada is not sure about quantifying the negative effects from declining oil prices on consumption and credit demand. On the other hand, the Canadian banks have historically been able to pull rabbits out of their hats, where profits are concerned.
"TD quarterly profit falls 7 per cent" – Berman, Report on Business
"RBC profits jump 14 per cent to $2.5-billion" – Berman, Report on Business
Nobel laureate economist Joseph Stiglitz believes markets are broken. Echoing research from Citi showing that central bank monetary stimulus was not reaching the real economy, Prof. Stiglitz believes that "if few productive investment opportunities are available, the return on invested wealth should start falling. It ought to be a self-correcting cycle in which wealth cannot outpace incomes for long. But the return from capital remains high, and wages are stagnating. Something's gone wrong."
"You've met Hillarynomics. Now meet left-of-Hillarynomics." – Vox
"If the first $5-trillion of global QE didn't prompt a wave of investment, what do we think a sixth trillion is going to do?" – Barlow, Report on Business
Mary Meeker, a partner in venture capital firm Kleiner Perkins Caufield and Byers, provides an annual presentation on the state of the technology market that is always one of the most anticipated publications of the year. This year, Ms. Meeker is focused on the growth of mobile, the enormous growth opportunities in health care-related technology, and the slow demise of physical retail and print media.
Bloomberg provided an excellent summary of the extended presentation:
"The tech sector seems pretty well entrenched at this point, but that is much truer for consumer products than other sectors of the American economy. Government, health care, and education have the longest way to go. That presents big opportunities for tech companies – and for good reason: Not coincidentally, those sectors present significant regulatory and cultural barriers."
"The nine slides that matter from Mary Meeker's State of the Internet" – Bloomberg
The full presentation is here.
Tweet of the Day: "@qz This is what a dying banking system looks like qz.com/413621 pic.twitter.com/8ZbiG9Qy6B" – Twitter
Diversion: This headline is a vast understatement, and Canadians are not exempt.
"16 maps that Americans don't like to talk about" – Vox
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Scott Barlow