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JPMorgan (JPM) Q2 2022 earnings

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JPMorgan Chase CEO Jamie Dimon speaks at the 2019 North American Building Trades Association (NABTU) legislative conference in Washington, U.S., April 9, 2019.

Jeenah Moon | Reuters

JPMorgan Chase said on Thursday that second-quarter profit fell as the bank built up reserves for bad loans by $428 million.

Here are the numbers:

  • Earnings: $2.76 per share versus $2.88 per share estimates by analysts surveyed by Refinitiv.
  • Revenue: $31.63 billion, versus an estimate of $31.95 billion

JPMorgan, America’s largest bank by assets, will be closely watched for clues about how the banking industry performed throughout a quarter marked by conflicting trends.

On the one hand, the unemployment rate is still Short, which means that consumers and businesses will have less trouble paying their debts. Rising interest rates and loan growth mean that banks’ core lending operations are becoming more profitable. And volatility in financial markets is a boon for fixed-income traders.

But analysts have already started cut sector earnings estimates on fears of an impending recession and most major bank stocks have sunk to 52-week lows in recent weeks. Revenue from mortgage and capital markets operations has plummeted, and companies may disclose new information wrist in the context of a wide-ranging decline in financial assets.

Crucially, a major headwind the industry experienced a year ago – freeing up reserves when loans performed better than expected – could be reversed as banks were forced to set aside money for loans. potential defaults as recession risk increases.

Back in April, JPMorgan was among the first banks to begin setting aside funds for loan losses, placing a Fee 902 million dollars to build up credit provisions in the quarter. That is in line with the CEO’s more cautious outlook Jamie Dimonwho warned investors last month that an economy “storm“on my way to.

In addition to the second-quarter results, analysts will be interested in any updates Dimon has on his economic forecast. Inflation has proven to be more stubborn than expected, with the US consumer price index up 9.1% only in June.

Given all the conflicting data, investors should be prepared for a flurry of results than usual for banks this quarter.

Several trends are expected to prevail. Investment banking is under pressure due to a collapse in IPO activity and debt and equity issuance. In May, JPMorgan President Daniel Pinto said that bank fees were trending down 45%. However, market turnover can increase 20% thanks to volatility in commodities and interest rates.

Thanks in part to the appreciation of the US rate, JPMorgan said at the company’s investor day in May that it was able to achieve its main goal of 17% profit This year, earlier than expected. But the company is forced to keep Payment is unchanged after the Federal Reserve’s annual stress test, while competitors include Goldman Sachs were able to increase their dividend last month.

Finally, bank analysts may ask if management can adjust lower cost to respond to the business environment.

Shares of JPMorgan are down 29% this year through Wednesday, worse than the 19% drop in the KBW Bank Index.

Morgan Stanley It is expected to report results by the end of Thursday, then Wells Fargo and Citigroup on friday and Bank of America and Goldman on Monday.

This story is evolving. Please check back for updates.

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Teja
Teja
I am passionate about journalism and using new technology to spread news. I am also interested in politics and economics, and I am always looking for ways to make a difference in the world. I am the CEO of Janaseva News, and I am 24 years old.

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