Financial tend to gain when interest rates are expected to rise. Why? This is because higher interest rates mean banks can charge higher rates for their loans and this should boost their overall profitability. If Jerome Powell is more hawkish tomorrow and opens up the prospect of early Fed tapering, then JP Morgan shares could rise higher. Note their strong seasonals into the end of the year.
From a seasonal perspective, over the last 10 years, JP Morgan has gained value from Aug 25 to Dec 31 a total of 80% of the time. The average gain has been 13.06% and the biggest fall was in 2018 with a -15.77% drop. The largest gain was in 2016 with a large 32.99% rise.
Major Trade Risks: If Powell is dovish today, then that should still mean equities rise, but a better instrument may be better than JP Morgan.