Bank of America (NYSE:BAC) is the latest giant financial institution to announce it experienced no trading losses in the first quarter, making it three banks now claiming that distinction, including Goldman Sachs (NYSE:GS) and J.P. Morgan (NYSE:JPM).
Goldman Sachs (NYSE:GS) stole everyone else’s thunder by making the announcement first, getting the lion’s share of the publicity and attribution.
Obviously the rest of the banks are going over their records carefully to see if they can make a similar boast, or if they can find other data which can be used as a marketing tool.
The stock market has played into these results as well, as it continued to surge during the first quarter, and will probably cause more pain in the second quarter, with the bragging pretty much toned down because of some of the bad days we’ve already experienced, and are likely to continue to experience in the volatile global economy we’re again facing.
Europe and China will continue to weigh on markets as growing demand for raw materials in China isn’t a given anymore, as they start to tackle their own potential bubble which is in danger of bursting. Measures taken by China like increasing interest rates and adding more regulations in the housing market could cut into commodity demand for the rest of 2010.
The European sovereign debt debacle is probably far worse than we know, and it’ll take many years for that entire story to play out, even with the approximate $1 trillion being offered to shore it up. Many think that is only kicking the can down the road and not dealing with the fundamental reasons behind the sovereign debt crisis in the first place, which is socialism and the culture of entitlement which these countries created, but can’t afford to pay for.
All of this will change the stock market euphoria that has illogically been going on, and that will put pressure on the trading desks of companies like Bank of America who have done so well recently in that segment of the industry.