JPMorgan Chase’s Second-Quarter Earnings Were Disappointing

The earnings season for the second quarter got off to a sour start with JPMorgan Chase’s announcement that the bank would temporarily halt share buybacks and would not meet analysts’ forecasts for an increase in earnings and revenue.

Profit dropped by 28 percent from the previous year to $8.65 billion, and the bank reported earnings of $2.76 per share, which was lower than the $2.88 that experts had anticipated earning per share to be. According to data provided by Refinitiv, managed revenue came in at $31.6 billion, falling short of the $31.95 billion that was anticipated.

According to the bank’s analysis, the making of deals was hampered by large market swings this quarter. The decline in investment banking fees was greater than the 47 percent that was forecast by industry analysts; it was 54%.

In the premarket trading session on Thursday, shares of JPMorgan plummeted by around 3 percent, bringing their overall loss for the year to 29 percent.
Investors and experts look to the quarterly earnings results of JPMorgan (JPM), which is the largest US bank in terms of assets, as a benchmark for determining how well Wall Street performed over the course of the last three volatile months for markets and the economy.

Last month, CEO Jamie Dimon warned of an economic “hurricane” brewing and said that he was bracing himself for the impact of the Federal Reserve’s tighter monetary policy and rising costs of food and fuel due to Russia’s invasion of Ukraine. Dimon said that he was bracing himself for the impact of the Federal Reserve’s tighter monetary policy and rising costs of food and fuel due to Russia’s invasion of Ukraine.

During a call with reporters on Thursday morning, Dimon stated that he had not altered his outlook on the likelihood of an imminent recession. According to him, the actions taken by the Federal Reserve could result in either a gentle landing or a hard landing; nonetheless, there is still a significant problem set to address.

He stated, “Rates are rising because of inflation, and in my view they’ll go up more than people think,” he said. “Quantitative tightening will reduce liquidity in global markets and stock prices are down a lot.”

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According to Dimon, market volatility is likely to persist for the foreseeable future. Nevertheless, it seemed as though he was dialing down some of his previous forecasts of bad weather.

According to Dimon, consumers are continuing to spend money, there is an abundance of jobs, and pay growth is occurring.

“If we go into any recession, consumers are in good shape. If you spoke to businesses you’d hear CEOs say things are looking good, and I agree “he remarked.

Investors were concerned because of the abrupt change in the buyback status. Jamie Dimon, the CEO of the company, said in a statement on Thursday that it was implemented to meet capital requirements and “allow us maximum flexibility to best serve our customers, clients and community through a broad range of economic environments.” Dimon said that this was done in order to meet the requirements for capital. Because of requirements imposed by the Federal Reserve, the bank was required to maintain its previous dividend level for the past month even while other financial institutions raised their payouts.

Additionally, on Thursday, earnings were disclosed by Morgan Stanley (MS). In the same vein as JPMorgan, it did not meet expectations. In addition, the bank attributed its losses on a decrease in revenue generated from investment banking activities.

On Friday, earnings reports are anticipated to be released by Wells Fargo (WFC), Citigroup (C), and BNY Mellon (BNY).

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