JPMorgan Chase announced a plan to return a stunning $40.4 billion to its shareholders over the next twelve months as part of its latest capital return plan. This is the largest-ever capital return plan in the history of the banking giant. The previous record for investor payouts by any U.S. bank over a 12-month period was set by Wells Fargo last year with its $32.8 billion capital plan.

Under the new plan, JPMorgan will hike its quarterly dividends by 12.5% a share beginning in Q3 2019. JPMorgan also plans to repurchase $29.4 billion worth of its common shares over this period.

Are banks in trouble with the slowing economy and the Federal Reserve likely cutting rates by the EOY and so they are moving to shore up their stock price now?

JPMorgan’s revenue stream looks solid.

JPMorgan has a history of rewarding its shareholders. The company has paid out at least $2 billion to investors each year since 2005 despite the economic downturn of 2008, with the figure reaching $28.5 billion in 2018.

Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 114.92. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 111.02, a stop order could be placed below this zone. However, the falling large players volume and negative Twiggs Money Flow is a very volatile combination.

While the fundamentals of JPMorgan look solid, it does not meet the requirements for a long-term buy and hold in the GST Portfolio. The reason is that the macroeconomic indicators we track are signaling a danger for banks if the Federal Reserve cuts interest rates. This is probably why you see falling large players volume and Twiggs Money Flow in the chart of JPM above.

Disclosure: I do not hold any position in JPM.

JPMorgan In The News