By Yasin Ebrahim
The Dow climbed Monday, buoyed by a JPMorgan-led jump in banks and rally in big tech as the dip-buying seen late-Friday continued into the start of the week.
JPMorgan Chase (NYSE:JPM) racked up more than 6% after the bank lifted its guidance on annual performance, forecasting net interest income to exceed $56 billion in 2022, above the prior forecast in January of $50 billion.
Banking stocks have been under pressure recently as fears about a recession offset expectations for higher interest rates as the Federal Reserve is set to step up the pace of monetary policy tightening.
But JPMorgan, while acknowledging that the risk of a “future adverse outcome” has increased, downplayed the risk of recession, pointing to a U.S. economy that “remains fundamentally strong.”
Energy stocks, meanwhile, rose more than 2% as oil prices wavered between gains and losses despite growing expectations for a boost in energy demand as Shanghai prepares to reopen after a two-month Covid-19 lockdown.
Airbnb was marginally higher, shrugging off a CNBC report, citing unnamed sources, that the company is set to shut down its domestic business in China by this summer.
If the deal does go through, it could, however, attract regulatory scrutiny despite a lack of business overlap between the firms.
“Our one concern is the potential that regulators block the deal. While we don’t see the business overlap that traditionally has created regulatory scrutiny, we would argue such overlap didn’t exist with AVGO’s proposed QCOM acquisition, nor QCOM’s aborted efforts to buy NXP [Semiconductors],” Wedbush said.