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Good morning,

Markets are called to open lower this morning. This is what's happening today:

  • Bank of Japan Governor Haruhiko Kuroda said today he will do whatever is possible to end deflation;
  • Data today is forecast to show U.S. retail sales stalled in March. Infosys Ltd;
  • India’s second-largest software exporter, plunged the most in 10 years after forecasting annual sales today that missed estimates;
  • Euro-area finance ministers meet in Dublin to discuss Cyprus, Slovenia and Greece
  • Merkel and Cameron meet for talks after markets close at government’s Meseberg retreat near Berlin;
  • Belgium sells bonds, U.K. sells bills;
  • Companies in Europe reporting results today include Aggreko, Aeroports de Paris, CPP Group, XP Power, Zardoya Otis

A very interesting day for the markets as JP Morgan and Wells Fargo report results today, Citigroup report Monday, Goldman Sachs reports Tuesday and Bank of America reports Wednesday.

JPMorgan Chase & Co., the largest U.S. bank by assets and the top investment bank by fees, is questioning the so-called universal bank model’s future.

Top-tier investment banks are “uninvestable at this point with a risk of spinoff from universal banks,” JPMorgan analysts led by London-based Kian Abouhossein wrote in a research note today. They cited potential rule changes and curbs on capital and funding.

Investors should avoid Goldman Sachs Group Inc., once the world’s most profitable securities firm, and Deutsche Bank AG, Germany’s largest bank, because of pressure on earnings and the unknown impact of new regulations, according to the report. Both firms rank among the biggest sales and trading rivals for New York-based JP Morgan, which isn’t mentioned in the report. The bank is scheduled to report first-quarter results today.

Instead, the analysts favor UBS AG and Credit Suisse Group AG, Switzerland’s first and second-largest banks, and New York-based Morgan Stanley, owner of the world’s biggest brokerage, because of their restructuring potential and ability to release capital.

Investment-banking revenue will continue at 2005 and 2006 levels and will be led by fixed-income, currencies and commodities, which will account for half of the industry’s sales by 2015, JPMorgan’s analysts said.

Second-tier operators in that business, including Morgan Stanley, Credit Suisse, UBS and Royal Bank of Scotland Group Plc, will have to restructure further because they lack scale, the analysts wrote. Goldman Sachs, Barclays Plc, Deutsche Bank, Citigroup Inc. and Bank of America Corp. should gain market share, according to the note.

For more information on these investment banks, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli