JPMorgan (JPM.US) Q3 beats expectations as businesses thrive

Before the market opened on Friday, JPMorgan Chase (JPM.US) reported its third-quarter earnings. The data showed that JPMorgan Chase's Q3 revenue was US$42.65 billion, up 7.0% YoY, better than market expectations; its EPS was US$4.37, also better than market expectations.

JPMorgan Chase's net interest income in the third quarter unexpectedly grew and raised its forecast for this major source of revenue, despite the market's expectation that U.S. interest rates will continue to decline.

The bank's Wall Street business revenue also exceeded analysts' expectations, with investment banking revenue surging 31%, better than the market's expectation of 16%; stock trading revenue grew 27%.

Despite strong business performance, "Wall Street king" Jamie Dimon, CEO of JPMorgan Chase, expressed pessimistic views on the economic outlook.

Dimon said in a statement on Friday: "Although inflation is slowing, the U.S. economy remains resilient, but there are still some key issues, including massive fiscal deficits, infrastructure needs, trade restructuring, and the world's re-militarization." In geopolitics, Dimon said "the situation is very dangerous and getting worse," which "could have a profound impact on the short-term economy, and more importantly, on the historical process."

Analysts began to lower their expectations for bank loan business revenue after the Fed started its first rate cut in more than four years last month. However, JPMorgan Chase said its net interest income grew 3% to US$23.4 billion in the third quarter, topping market expectations for a slight decline. JPMorgan Chase now expects its net interest income in 2024 to be about US$92.5 billion, up from its previous forecast of about US$91 billion.

JPMorgan Chase's stock has risen 25% year-to-date. As of the time of writing, the stock rose 2% before the market opened on Friday.

Its rival Wells Fargo (WFC.US) reported better-than-expected third-quarter earnings on Friday, and its stock rose more than 3% before the market opened. Bank of America (BAC.US), Citigroup (C.US), Goldman (GS.US) and Morgan Stanley (MS.US) will report earnings next week.

After a period of record highs, shareholders have become restless. Last month, JPMorgan Chase's president Daniel Pinto said that analysts' estimates of the bank's net interest income in 2025 "were not reasonable" given interest rate expectations, leading to a four-year low in the stock price.

JPMorgan Chase also reported US$3.11 billion in loan losses and US$2.09 billion in net charges, with reserves of about US$10 billion.