JPMorgan Preview: Key Insights on Consumers, Credit Risk, and Capital Markets in Focus

JPMorgan Chase will kick off the Q1 earnings season for the major banks on Friday, providing a critical read on the health of both the consumer and capital markets. As the country’s largest lender, JPM’s results are a bellwether for credit demand trends, particularly in credit cards, auto loans, and mortgages.

In parallel, Wall Street will parse its trading and investment banking revenue for clues on the health of corporate dealmaking and market activity. While macro headwinds and rate volatility have clouded the outlook, JPM could show resilience thanks to trading tailwinds in a volatile environment. Still, investors will be focused on reserve builds as concerns around a potential recession, fueled by escalating trade tensions, take center stage—especially after CEO Jamie Dimon called recession a “likely outcome.”

Consensus expects JPM to deliver $4.63 in EPS and $43.99 billion in revenue for the quarter. The firm has guided for $94 billion in full-year net interest income and roughly $95 billion in expenses for 2025, with mid-teens return on tangible equity (ROTCE). However, given the uncertain environment, a walk-back or softening of the full-year outlook—like Delta Air Lines’ move earlier this week—could be a negative for sentiment.

The key theme will be credit. JPM reported 1.63% net charge-offs in Q4, and while delinquencies remained low at 0.84%, both metrics will be under scrutiny Friday. Commentary on consumer health, especially around discretionary card and auto balances, will help investors assess whether credit deterioration is beginning to accelerate. The CFO noted on its Q4 call “we’re not really forecasting a pickup in loan growth yet,” despite underlying optimism—a remark that reflects the wait-and-see mindset gripping much of corporate America.

Trading is expected to be a relative bright spot. JPM’s COO recently guided to “low double-digit” growth in trading revenue and “mid-teens” growth in investment banking fees for Q1. That would mark a solid year-over-year bounce, especially for FICC desks, which already topped estimates last quarter ($5.01B vs. $4.37B). VaR disclosures and revenue mix breakdowns will offer more color on risk appetite, especially as investors weigh whether recent volatility led to outsized client flows or hedging activity.

Commercial real estate is another area to monitor. The bank has disclosed “some green shoots” in leasing activity in New York and San Francisco, but origination volumes remain depressed. Any disclosures around losses, markdowns, or exposure reallocations in this space will be critical. With vacancy rates still historically high, even modest signs of deterioration could ripple through broader credit risk models.

Strategically, JPMorgan continues to invest heavily in tech and infrastructure. The bank has forecasted nearly $5 billion in incremental expenses this year, including higher compensation, inflation-linked costs, and continued branch and digital expansion. Investors will be curious how that spend is translating into margin expansion, especially given muted growth expectations in core lending.

Finally, expect plenty of attention on shareholder returns. The dividend was hiked 12% to $1.40 earlier this year, and CFO Jeremy Barnum said this week that “a slightly greater return of capital” could be on the table. However, elevated capital requirements and potential regulatory shifts may limit upside flexibility in the near term.

JPMorgan’s price-to-book ratio of 1.72x is above both the key 1x threshold and its five-year average of 1.59x, suggesting the stock is relatively expensive. While its strong 18.19% return on equity supports the premium, macro headwinds may already be reflected in the current share price.

All told, JPMorgan’s Q1 will offer more than just an earnings print—it will help set the tone for how banks balance profitability, risk, and growth in an increasingly fragile macro environment. Investors will be watching closely for any signs that even the industry’s fortress balance sheet can’t fully insulate it from growing global crosswinds.

Q4 Recap

JPMorgan Chase (JPM) delivered a strong Q4 performance, easily beating Wall Street expectations across key metrics. Adjusted EPS came in at $4.81, well above the $4.04 consensus, while adjusted revenue totaled $43.7 billion, topping estimates of $42 billion. Fixed income, currencies, and commodities (FICC) trading revenue was a standout at $5.01 billion versus the $4.37 billion estimate, driven by healthy market activity.

Credit quality remained in focus, with JPM reporting net charge-offs of 1.63% and delinquencies at 0.84%. Provisions for credit losses totaled $2.63 billion—less than expected—underscoring continued resilience among borrowers. Full-year client asset inflows were a robust $486 billion, highlighting the bank’s strong wealth and asset management momentum.

Return on equity hit 17%, while return on tangible common equity (ROTCE) was 21%, exceeding estimates. JPM guided to 2025 net interest income of ~$94 billion and expenses of ~$95 billion, signaling stable operational expectations despite ongoing inflationary pressures. CFO Jeremy Barnum noted that inflation remains persistent, but cost controls are helping offset the impact.

CEO Jamie Dimon said consumer spending stayed healthy through the holidays but warned the bank isn’t yet forecasting a pickup in loan growth. JPM shares rose 2% premarket, reflecting investor confidence in the bank’s durable model amid economic uncertainty.