Storylines

A handful of easily digestible storylines were front and center Tuesday, which at least helped fill what can be a maddening summer void.

US banks were pleased to announce their intention to dole out more money to shareholders after easily clearing the Fed’s stress test, the last obstacle on the road to escaping pandemic constraints. Unshackled, the country’s six biggest banks will boost dividend payments by an average of 50%. Morgan plans to double its payout. Only Citi refrained. Buybacks are on the menu too, naturally.

Wall Street’s capital plans were accompanied by a handful of pompous statements dressed up as dutiful nods to discipline. “Our longstanding capital hierarchy remains the same — invest in and grow our market-leading businesses to support our clients, customers and communities, pay a sustainable dividend, and return any remaining excess capital to shareholders,” Jamie Dimon said.

Right. But what about those overdraft fees? Asking for Elizabeth Warren. (And also for the people who were overdrafted.)

Wall Street fared well during the pandemic, to say the least. Trading and IB revenues were, at times, obscene. Q1 2021 was no exception (figure below).

“A surge in payouts is welcome news for investors but could put big banks on defense again in Washington,” Bloomberg wrote. (Thank God for lobbyists!)

Meanwhile, it turns out breaking up big-tech is going to be more difficult than simply asking the courts to defer to common sense. “It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist,” a federal judge said Monday, while tossing antitrust lawsuits brought against “The Social Network” by the FTC and dozens of states’ attorneys general.

Yes, you actually have to prove your case in America. Otherwise, O.J. Simpson gets to spend the rest of his life “looking for” Nicole’s killer on the golf course (as opposed to stiff-arming fellow inmates in the mess hall.)

Judge James E. Boasberg used an eclectic mix of references to make his point. “Ultimately, this antitrust action is premised on public, high-profile conduct, nearly all of which occurred over six years ago, before the launch of the Apple Watch or Alexa or Periscope, when Kevin Durant still played for the Oklahoma City Thunder and when Ebola was the virus dominating headlines,” he wrote. (If only we’d brought the case when Durant was monopolizing the NBA with the Warriors!)

Happy days, Facebook is now worth one whole “bipartisan” infrastructure plan (figure below).

Panning out to a 30,000-foot view, US equities were perched at new records (because where else would they be?). Commentators rolled out a few caveats. You gotta say something to spice it up, after all.

“There’s a palpable sense of fear in some corners of the market,” Bloomberg’s Cormac Mullen wrote Tuesday, noting that the Cboe Skew Index hit a record last week, while Credit Suisse’s Fear Barometer sits just shy of a multi-year high.

“Neither are evidence that a correction is coming,” Mullen conceded. “But they do suggest at least some investors are acting like one might.”

Global stocks are on the verge of logging a fifth quarterly gain.