JPMorgan Chase reported record quarterly profits on Tuesday behind strong consumer business, but shares were pressured by worries over expected Federal Reserve interest rate cuts on a day of mixed results by large banks.
Wells Fargo also notched higher profits, while Goldman Sachs reported a dip in profits, but topped analyst expectations.
The trio of results moved markets into the heart of second-quarter earnings season, which comes against a backdrop of uncertainty over international trade and an anticipated loosening of monetary policy, with the Fed expected to cut interest rates later this month.
Lower interest rates are generally viewed as a drag for large banks because it reduces the net interest income of financial companies — the difference between the interest rates it charges consumers for loans and the interest it must pay for deposits.
At JPMorgan, key areas of strength included consumer banking, where it scored from higher net interest income. JPMorgan also generated increased revenues connected to the credit card business and higher auto loans and lease originations.
Net profit came in at $9.7 billion, up 16.1 percent and a company record.
Revenues were up 4.1 percent to $29.6 billion.
Chief executive Jamie Dimon offered an upbeat appraisal of the US economy.
“We continue to see positive momentum with the US consumer ? healthy confidence levels, solid job creation and rising wages ? which are reflected in our Consumer & Community Banking results,” he said.
But shares were choppy after the report, with analysts pointing to the bank’s forecast for $57.5 billion in 2019 net interest income, down from the prior $58 billion forecast. The decline reflects the expected hit from Fed actions to cut rates.
JPMorgan Chase reported a jump in second-quarter profits on Tuesday behind strength in consumer and business banking as its CEO offered an upbeat appraisal of US economic trends.
– Higher profits at Wells –
At Wells Fargo, net income rose 19.7 percent to $6.2 billion, while revenues were essentially flat at $21.6 billion.
Wells Fargo experienced a dip in net interest income but that was largely offset by other gains, such as higher service charges on deposit accounts and lower non-interest expenses.
Results in the year-ago period were hit by a large one-time tax expense.
“In second quarter 2019, we recorded strong earnings and continued to make progress on our top priorities: focusing on our customers and team members; meeting the expectations of our regulators; and continuing the important transformation of our company,” said interim chief executive Allen Parker.
At Goldman Sachs, net income was $2.2 billion, down 6.4 percent from the year-ago period.
Revenues dropped 1.8 percent to $9.5 billion.
– Goldman trading hit –
Goldman suffered from a decline in fixed income, currency and commodity trading, a weakness at other large banks.
Financial advisory revenues also fell due to lower merger and acquisition activity compared with the year-ago period. Debt underwriting revenue also fell.
“We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients,” chief executive David Solomon said in a statement.
“Given the strength of our client franchise, we are well positioned to benefit from a growing global economy.”
Shares in JPMorgan fell 0.1 percent to $113.83 in early trading. Wells Fargo rose 0.3 percent to $46.84, while Goldman Sachs rose 2.1 percent to $215.97.
© 2019 AFP
GOP strategist walloped for urging Dem lawmakers to leave Trump alone and worry about being re-elected instead
On CNN Saturday, Democratic strategist Maria Cardona and Republican strategist Doug Heye clashed after the latter suggested Democrats should value their re-election over holding President Donald Trump accountable for wrongdoing.
"We have to remember, this is not a trial as we think of trials in courtroom," said Heye. "This is a political process. It is designed to be a political process, and that's why this whole process is played out the way that it has so far. I would say to Maria, the Republicans aren't spending money to shore up Republicans per se. They're spending money to go after vulnerable Democrats who are going home and then coming back and telling Nancy Pelosi and Democratic leadership, I'm getting killed back home."
William Barr made it clear this week that he’d sign off on a sham investigation into the Dems’ 2020 nominee
Welcome to another edition of What Fresh Hell?, Raw Story’s roundup of news items that might have become controversies under another regime, but got buried – or were at least under-appreciated – due to the daily firehose of political pratfalls, unhinged tweet storms and other sundry embarrassments coming out of the current White House.
A perfect storm propelled New York's sleaziest real estate developer to an Electoral College victory in 2016 despite winning three million fewer votes than his opponent, but Nate Silver made a compelling argument that the letter James Comey sent to Congress just 11 days before Election Day announcing that the FBI was re-opening its probe into Hillary Clinton's emails was decisive.
Bill Barr is serving notice to DOJ officials that he’ll ruin them if they investigate Trump: MSNBC host
An MSNBC discussion about Bill Barr running interference within the Justice Department for Donald Trump ended with "AM Joy" host Joy Reid suggesting that the attorney general's very public "media blitz" over the so-called "Horowitz Report" is a warning shot to anyone in the DOJ who thinks about investigating the president.
As Reid explained it, "He did a whole TV blitz to basically say that his own agency, the FBI, was spying on the Trump campaign, something that the inspector general said did not happen."
Reid took that to its logical conclusion.
"Now he’s saying, ‘Well, I’ve got a different report that’s going to find the motivations’ that he’s basically saying are bad motivations by people in the FBI. And if you’re that FBI agent and then you hear that Donald Trump may be again looking for foreign help and maybe again getting help from Russia or forcing help from Ukraine, what do you do?" she asked. "Would you then not be concerned that, should you go ahead and investigate foreign interference in our election, that William Barr may come after you?"