JP Morgan sees S&P give up gains; Europe convene

Sharemarkets pared gains as details of JP Morgan’s trading losses were released with the S&P 500 initially off 1.3%. JP Morgan leading the way, slumping 4.3% after a report identified that potentially, as much as USD 9 billion in trading losses could be incurred from its credit derivatives trade. The firm’s Chief Executive Jamie Dimon announced in May that initial estimates of losses would be USD 2 billion. The bank’s exit from its money-losing trade is happening faster than many expected as JPMorgan previously stated that it hoped to clear its position by early next year. It is now already out of more than half of the trade and may be completely free this year.

Also in the US, the Commerce Department confirmed that the US economy grew at an annual pace of 1.9% for the 1st quarter following a 3% increase for the final quarter of last year. Consumer spending slowed from the previous period as the labour market shows signs of cooling where initial jobless claims fell by just 6,000 to 386,000, marginally off last week’s high of 392,000 leaving the unemployment rate at 8.2%.

In Europe, the 2 day summit got underway with leaders working on urgent measures to ease financial market pressure on Spain and Italy. This is the 20th time the leaders of the nations within the Eurozone have met on how to eradicate the debt crisis. On one side, you have Germany’s Angela Merkel wanting strong political union with centralised control of national budgets before considering Eurobonds or other means of financial integration. On the other side, you have European leaders such as Spain’s Mariano Rajoy and Italy’s Mario Monti wanting Eurobonds and financial aid first and then talk of further integration.

These issues have seen the Kiwi knocked back 50 cents against the Greenback to be back around .7850 with the Aussie doing the same, now just above parity.

Despite JP Morgan knocking shares, the S&P 500 remains strong