Citi and JPMorgan brace for drop in trading revenues

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Citigroup and JPMorgan are bracing investors for a fourth straight drop in first-quarter trading, a period of the year when the largest investment banks typically earn the most from that business.

Bloomberg reports that Citigroup finance chief John Gerspach said yesterday his firm expects trading revenue to drop by a 'high mid-teens' percentage, less than a week after JPMorgan CEO Jamie Dimon said revenue from equities and fixed income was down about 15%. If trading at the nine largest firms slumps that much, it would extend the slide from 2010’s first quarter to 36%.

'It sounds like more bloodletting on Wall Street', said Jeff Davis, a managing director for the financial-institutions group at advisory firm Mercer Capital in Nashville, Tennessee. 'What we are seeing is a function of investors being scared of bonds because the math is bad. No one I talk to wants to take a chance adding bonds to the portfolio'.

Clients are trading less as the Federal Reserve slows its monthly asset purchases and leaves bond investors preparing for rising interest rates. An index of global equities tumbled the most in a month yesterday, erasing the year’s gain, as Russia’s growing military presence in Ukraine prompted an emerging-market selloff.

To access the complete Bloomberg article hit the link below:

Citigroup Joins JPMorgan in Seeing Trading-Revenue Drop

Goldman Sees Russia Taming Ruble Losses After Plunge

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