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JPMorgan Chase began the second quarter results season with disappointing news: The bank temporarily halted share repurchases and missed analysts’ projections for revenue growth and earnings.
Profit decreased 28% from the prior year to $8.65 billion, and the bank posted earnings of $2.76 per share as opposed to the $2.88 experts had predicted. According to Refinitiv statistics, managed revenue came in at $31.6 billion, falling short of the $31.95 billion anticipated.
Dealmaking has been hampered this quarter, according to the bank. As a result, investment banking fees decreased by 54 percent, exceeding the analysts’ prediction of 47 percent.
The price of JPMorgan’s stock decreased by around 3% in Thursday’s premarket trade, down by a total of 29% this year.
Investors and analysts consider JPMorgan’s (JPM) earnings results as a barometer for how Wall Street performed during the past three volatile months for markets and the economy. JPMorgan is the largest US bank by assets.
Last month, CEO Jamie Dimon forewarned of an impending economic “storm” and said he was preparing for the effects of the Federal Reserve’s stricter monetary policy and rising food and fuel prices as a result of Russia’s invasion of Ukraine.
In a call with reporters on Thursday morning, Dimon stated that his opinion of an impending recession had not altered. He claimed that the Fed’s efforts might result in either a soft or a hard landing, but that there are still significant problems to address.
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According to Dimon, markets will continue to be erratic for the foreseeable future. He did, however, seem to temper some of his early forecasts of bad weather. According to Dimon, consumers are still making purchases and there are plenty of employment and rising earnings.
Investors were alarmed by the abrupt change in the buyback status. CEO Jamie Dimon stated in a statement on Thursday that it was done to meet capital requirements and “give us maximum flexibility to best serve our customers, clients and communities through a broad range of economic circumstances.” Due to Federal Reserve rules, the bank was forced to maintain its dividend last month while other banks upped their dividends.
On Thursday, Morgan Stanley (MS) also released its profits. It fell short of expectations, just like JPMorgan Chase. The bank also attributed its losses to a decline in revenue from investment banking.
On Friday, earnings reports are anticipated from BNY Mellon (BNY), Citigroup (C), and Wells Fargo (WFC).