JP Morgan and Goldman Sachs – Drifiting Down

Apple is back above $190, Microsoft is at all-time highs and Google is running higher (I think it may be the largest company in the world – for a point in time in 2019).

The FAANG’s are under attack by the government these days, with Tweets from Fat Nixon and breakup plans by Democrats, but it is Goldman and JP Morgan whose stocks remain in the toilet.

It should be a perfect storm for the banks. No oversight, no competition, lot’s of IPO’s. From one look at the chart, we see it is not.

I look for relative strength when markets are weak. I want to own the strongest stocks, the stocks that hold up best when the markets have dropped.

I want to avoid the weakest relative strength stocks when the market has been rising.

If I were to speculate, other than IPO’s the banks are under assault for growth and margins by technology companies everywhere.

They also seem to have lost their mojo.

My fave read on the world of banking is from Matt Levine at Bloomberg. You can subscribe right here.

In the March 8th piece titled ‘You Have to Pay The Right Person‘, Matt riffs on Goldman’s SSG (Special Situations Group) that printed money for the bank and now wants to raise outside capital. From Matt:

But they all have an end-of-an-era feel to them. There is a real pre-crisis feel to Goldman Sachs running a business investing its own money in strange and risky and unconstrained ways. SSG has always had a certain mystique, and you would not have described it as a “steady, low-risk businesses like money management.” But that seems to be its future.