JPMorgan And Capital One: Relatively Safe And Compelling Opportunities

Summary:

  • JPMorgan Chase & Co. and Capital One Financial Corporation appear to be among the best buying opportunities amid this banking industry mayhem.
  • With many bank industry and bank-specific risks, investors should carefully evaluate liquidity and capital cushions.
  • Valuations are now more interesting, but may worsen before improving.
  • My preference is to own high quality companies, especially in banking, rather than speculating in distressed situations.

Low angle view of skyscrapers in London

Gary Yeowell

The bank failures of Silvergate Capital Corporation (SI), SVB Financial Group (SIVB), and Signature Bank (SBNY) have created significant uncertainty in the industry. Why?

Deposit flight, investment portfolio losses, rising funding costs, looming credit/loan defaults, and contagion risks via derivative counterparty

Probability of US Recession Predicted by Treasury Spread

Probability of US Recession Predicted by Treasury Spread (New York Fed (newyorkfed.org))

JP Morgan Asset Management: Bank Deposits

JP Morgan Asset Management: Bank Deposits (JP Morgan Asset Management Research)

JP Morgan Asset Management Research: Tier 1 Capital

JP Morgan Asset Management Research: Tier 1 Capital (JP Morgan Asset Management Research)

Equanimity Research Comment

Equanimity Research Comment (Author)

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Data by YCharts

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Data by YCharts

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Data by YCharts


Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in JPM, COF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


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