JPMorgan kicks off earnings season with bad news for investors

Earnings fell 28% from a year earlier to $8.65 billion and the bank reported earnings of $2.76 per share versus $2.88 expected by analysts. Managed revenue hit $31.6 billion, missing the expected $31.95 billion, according to Refinitiv data.

Large market swings hurt trading this quarter, the bank reported. Investment banking fees fell 54%, more than the 47% forecast by analysts.

JPMorgan shares fell about 3% in premarket trading on Thursday and are down 29% this year.

JP Morgan (JPM) is the largest U.S. bank by assets and its earnings reports are used by investors and analysts as an indicator of how Wall Street has fared over the past three turbulent months for markets and l ‘economy.

CEO Jamie Dimon warned last month of a brewing economic “hurricane” and said he was bracing for the impact of the Federal Reserve’s monetary policy tightening and rising costs of food and fuel due to Russia’s invasion of Ukraine.

In a call with reporters Thursday morning, Dimon said he hadn’t changed his mind about a coming recession. The Fed’s efforts could lead to a soft landing or a hard landing, he said, but there are still serious issues to resolve.

“Rates are going up because of inflation and I think they will go up more than people think,” he said. “Quantitative tightening will reduce liquidity in global markets and equity prices have fallen significantly. »

Markets will remain volatile for the foreseeable future, Dimon said. Still, he appeared to soften some of his earlier bad weather predictions. Consumers are still spending money, jobs are plentiful and wages are rising, Dimon said.

“If we go into a recession, consumers are in good shape. If you were talking to companies, you would hear CEOs saying things are going well, and I agree,” he said.

The sudden change in redemption status also worried investors. Dimon said it was implemented to meet capital needs and “allow us maximum flexibility to better serve our customers, our customers and our community in a wide range of economic environments,” the CEO said Thursday. Jamie Dimon in a statement. Last month, the bank had to keep its dividend unchanged due to Federal Reserve regulations, while other banks increased their payouts.

Morgan Stanley (MRS) also announced its results on Thursday. Like JPMorgan, it missed expectations. The bank also cited a decline in investment banking revenue as the reason for its losses.

Wells Fargo (WFC), Citigroup (VS) and BNY Mellon (BNY) are expected to release their results on Friday.

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