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Before the Bell: JPMorgan Chase $2B loss rattles markets

Liam Lahey

The US$2 billion trading loss by American banking giant JPMorgan Chase & Co. and Chinese data that shows the world's second largest economy is slowing down is laying global markets low on Friday.

The $2 billion loss is seen as a major embarrassment for JPMorgan Chase & Co., America's largest bank and one that managed to come out of the 2008 financial crisis in better shape than its peers. The bank lost the funds in the last six weeks in a portfolio designed to hedge against risk. Meanwhile in China, figures for April show a sharper-than-expected drop in investment and industrial production. All the while, Greek political upheaval continues to simmer, posing a threat to Eurozone stability.

The benchmark Stoxx Europe 600 Index was recently 0.7 per cent lower at 249.47. The U.K.'s FTSE 100 Index was down 0.5 per cent at 5515.23, Germany's DAX fell 0.4 per cent to 6494.34 and France's CAC 40 Index decreased by one per cent to 3100.22. The euro currency is presently fetching US$1.2935.

In Asia, that which is flattening European bourses is doing much the same to markets in the Far East. Japan's Nikkei 225 Stock Average was down 0.2 per cent, Australia's S&P ASX 200 was down 0.3 per cent, and South Korea's Kospi fell 1.4 per cent. Singapore's Straits Times Index was down 0.7 per cent. The Hang Seng Index in Hong Kong dropped for a seventh consecutive session, down 1.2 per cent. The China Shanghai SE Composite edged 0.3 per cent lower.

On Wall Street, U.S. futures are pointing to a lower open. Futures on the Dow Jones Industrial Average fell 66 points, or 0.6 per cent, to 12768. S&P 500 Index futures dropped 8.6 points to 1349, while Nasdaq 100 futures declined 9.25 points to 2609.50. For Friday, investors will be eyeing the April producer-price index and the University of Michigan's consumer sentiment index for May is due.

Here at home, Canada's benchmark ticked higher after a string of losses. The S&P/TSX Composite Index rose 61.16 points to close at 11,736.17 on Thursday while the TSX Venture Exchange gained 9.62 points to 1,355.31. The Canadian dollar is currently trading at 99.83¢ US.