Raphael Stevens

In this articleJPMPedestrians walk in front of the JPMorgan Chase headquarters building in New York.Scott Mlyn | CNBCJPMorgan Chase said Thursday it will commit more than $2.5 trillion over the next decade toward long-term solutions that tackle climate action and contribute to sustainable development.Within the initiative, $1 trillion is earmarked for green projects, including renewable energy and clean technologies that are focused on speeding the transition to a low-carbon economy.The $2.5 trillion target, which begins this year and runs through the end of 2030, will also finance and facilitate transactions that support socioeconomic progress in developing countries, as well as economic inclusion in developed markets.The latter effort will focus on small business financing, home lending and affordable housing, education and health care. Included within this category is the $30 billion JPMorgan committed last October to closing the racial wealth gap in the U.S.”Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities,” CEO Jamie Dimon said.”Business, government and policy leaders must work together to support long-term solutions that advance economic inclusion, bolster sustainable development and further the transition to a low-carbon economy. We are committed to doing our part,” he said.Thursday’s announcement comes after JPMorgan said last fall it will establish emission targets for its financing portfolio. The firm said targets would be set on a sector-by-sector basis, and will first focus on the oil and gas, electric power, and automotive manufacturing sectors.The targets, which the firm said it would begin setting in 2021, will be within the parameters outlined by the 2015 Paris Agreement.Dimon also addressed the enormous opportunity created by the energy transition in his 2020 annual letter to shareholders.”There’s huge opportunity in sustainable and low-carbon technologies and businesses,” he said.”While many of these technologies and companies are mature, many more are just getting started—and more will need to be created in the coming decades. In addition, all companies will need capital and advice to help them innovate, evolve and become more efficient while staying competitive in a changing world,” Dimon said in the letter.The bank facilitated in 2020 more than $220 billion in transactions related to sustainable development, more than $55 billion of which was for green initiatives. The total exceeded the firm’s initial $200 billion target for the year.Some believe the bank has not done enough.A recent report from a collection of climate organizations found that between 2016 — the first full year after the Paris Agreement was signed — and 2020, JPMorgan’s total fossil fuel financing hit $317 billion. That’s more than any of the major banks.Citi and Wells Fargo were the second- and third-largest financers at $237 billion and $223 billion, respectively.While JPMorgan still tops the list, the bank — which is the largest by assets under management in the U.S. — has decreased its lending since the Paris Agreement was signed, according to the report.A representative from the firm previously said that the bank does not comment on third-party reports.— CNBC’s Hugh Son contributed reporting.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

In this articleBACBrian Moynihan, CEO, Bank of AmericaScott Mlyn | CNBCBank of America reported Thursday profit that topped Wall Street estimates on booming investment banking and trading results, as well as the release of loan-loss reserves as fewer consumers were expected to default on debts.The bank posted first-quarter profit of $8.1 billion, or 86 cents a share, exceeding the 66 cents a share expected by analysts surveyed by Refinitiv. The company produced $22.9 billion in revenue, edging out the $22.1 billion estimate.Bank of America separately announced a $25 billion stock repurchase program; the stock gained 1.2% in early trading.”While low interest rates continued to challenge revenue, credit costs improved and we believe that progress in the health crisis and the economy point to an accelerating recovery,” CEO Brian Moynihan said in the release.Like other banking rivals, Bank of America saw a large benefit from the improving U.S. economic outlook in recent months: It released $2.7 billion in reserves for loan losses in the quarter. Last year, the firm set aside $11.3 billion for credit losses, when the industry believed that a wave of defaults tied to the coronavirus pandemic was coming.Instead, government stimulus programs appear to have prevented most of the feared losses, and banks have begun to release more of their reserves this quarter.Like JPMorgan and Goldman, the bank also saw a boost from its trading operations. Fixed income trading revenue jumped 22% to $3.3 billion, exceeding analysts’ estimate by roughly $660 million. Equities revenue rose 10% to $1.8 billion, about $170 million more than expected.The firm’s Wall Street bankers were busy as well: The firm posted a 62% increase in investment banking fees to $2.2 billion, almost $400 million more than analysts had expected, fueled by a 218% surge in equity underwriting fees to $900 million.On Wednesday, JPMorgan Chase and Wells Fargo each posted results that exceeded analysts’ expectations on reserve releases, while Goldman Sachs beat estimates on strong advisory and trading results.Shares of Bank of America have climbed 32% this year, exceeding the 26% gain of the KBW Bank Index.Here are the numbers:Earnings: 86 cents a share, vs. 66 cents a share expected by analysts polled by Refinitiv.Revenue: $22.9 billion, vs. $22.1 billion expected.This story is developing. Please check back for updates.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

There’s a significant risk catching economist Stephen Roach’s attention, and it has nothing to do with earnings season.Roach, one of the world’s leading authorities on Asia, is concerned U.S.-China relations could erode further in the coming weeks.”There are a lot of balls in the air right now that are very worrisome,” the former Morgan Stanley Asia chairman told CNBC’s “Trading Nation” on Wednesday. “You’ve got a real problem here, and it’s one that worries me a lot, and I think the markets are completely ignoring.”Roach sees bipartisan in the Senate for the Strategic Competition Act of 2021 as a troubling development. His reason: it reflects a hard-line approach against China that could spark retaliation.”My fear for the last several years is that what started out as trade war would turn into a tech war, and then eventually morph into a cold war,” Roach said. “Those fears have come to pass. Just this week, there are significant developments that lead me to underscore that risk.”He also lists a new U.S. intelligence report as particularly worrisome.’The annual threat assessment was released yesterday [Tuesday] by the office of national intelligence and it clearly labeled China as America’s No. 1 threat,” said Roach, who’s monitoring building tensions between China and Japan, too.According to Roach, it appears President Joe Biden will continue many of the Trump administration’s policies against China.Roach warns the increased U.S.-China tensions exacerbate his dollar crash call. Late last spring, he predicted the greenback would drop 35% against other major currencies over the next year or two.”The dollar moved down sharply in the second half of 2020. It reversed course in the first quarter of this year and now it’s under downward pressure again,” Roach said. “It reflects my concerns over the current account deficit in the United States, unwillingness of the Fed to tighten interest rates for the conceivable future, and then the possibility that Europe may end up having a stronger commitment to fiscal policy than any of us, myself included, thought.”He’s also concerned the current backdrop with China could exacerbate the danger.”You add to that pressures on America’s role as a global leader that may be brought into play by frictions with China and there’s still, in my view, considerable downside left for the U.S. dollar,” Roach said.The U.S. Dollar Currency Index is off almost 1% over the past week. It’s down more than 7% over the past year.Disclaimer More

People walk past the headquarters of the People’s Bank of China (PBOC), the central bank, in Beijing, China September 28, 2018. Jason Lee | ReutersBEIJING — China may be one step nearer to abandoning its controversial policy of restricting childbirth.The central bank released a paper late Wednesday suggesting the country remove limits on how many children people can have, suggesting that China should “fully liberalize and encourage childbirth.”As China’s population began aging, Chinese authorities began several years ago to roll back the decades-old “one-child policy” and allow people to have two children. But births continued to fall, dropping 15% in 2020 in a fourth-straight year of decline.”In order to achieve the long-term goals in 2035, China should fully liberalize and encourage childbirth, and sweep off difficulties (women face) during pregnancy, childbirth, and kindergarten and school enrollment by all means (possible),” four central bank researchers wrote in the English-language abstract to a working paper.The 22-page document was dated March 26 and shared publicly on Wednesday.The paper stated the authors’ views do not represent that of the central bank. However, the call to drop restrictions on births marks the latest high-level discussion of how to address China’s aging population problems.Competing with India and the U.S.One of China’s main concerns is the impact these demographic changes could have on economic development.In two dedicated sections of the paper, researchers from the People’s Bank of China laid out how these demographic issues put China at an economic disadvantage to the U.S. and India.”If my country has narrowed the gap with the U.S. over the past 40 years by relying on cheap labor and the bonus of a huge population, what can it rely on in the next 30 years? This is worth thinking over,” the authors wrote in Chinese, according to a CNBC translation.They noted how the U.S. benefits from immigration even as China’s population ages. Meanwhile, India’s population and workforce will soon surpass that of China, they said.From 2019 to 2050, China’s population will decline by 2.2% while that of the U.S. will increase by 15%, the paper said, citing UN estimates.The authors added that the percentage of China’s work force is dwindling and it will lose its edge over that of the U.S. in the next few decades. In 2019, China’s workforce as a proportion of the total population was 5.4 percentage points higher than the U.S. However, by 2050, China’s workforce proportion will be 1.3 percentage points smaller than the U.S., the paper said.China’s aging populationIn a plan released in March for economic development for the next five years and beyond, Beijing said countering the effects of the aging population is one of its priorities. However, they stopped short of removing a ban on Chinese families from having more than two children.If there’s slight hesitation, (we) will miss the precious window of opportunity for birth policy to respond to the demographic transition, and repeat the mistake of developed countries.People’s Bank of China working paperEducational and technological advances are insufficient to counter the decline in population, and China should remove restrictions on births, the authors wrote.”If there’s slight hesitation, (we) will miss the precious window of opportunity for birth policy to respond to the demographic transition, and repeat the mistake of developed countries.”The paper discussed generally how China’s aging population problem is more severe than that of developed countries. In particular, the authors noted that developed countries with an aging population problem tend to be wealthier with a per capita GDP of at least $2,000, while China’s is half that at $1,000.And once the older segment of the population begins to sell property, stocks and bonds to finance their retirement, the ratio will be close to that of a labor force that is buying those assets, which could result in increased pressure on prices, the paper said.Chinese authorities are set to release results from a once-a-decade census later this month. More