JP Morgan reported Q4 earnings this morning. Q4 EPS was $3.57 vs. $3.07 expected. Q4 Revenue was $35.57 billion vs. $34.3 billion expected. Revenue rose 17% to $35.57 billion, fueled by the rise in net interest income to $20.3 billion!!! CEO Jamie Dimon said in the release that they may resume stock buybacks this quarter due to the strong earnings results. JPM 0.00 stock soared 2.52% today.
In the press release, Jamie Dimon also made the following statement about the outlook of the US economy:
The U.S. economy currently remains strong with consumers still spending excess cash and businesses healthy. However, we still do not know the ultimate effect of the headwinds coming from geopolitical tensions including the war in Ukraine, the vulnerable state of energy and food supplies, persistent inflation that is eroding purchasing power and has pushed interest rates higher, and the unprecedented quantitative tightening. We remain vigilant and are prepared for whatever happens, so we can serve our customers, clients and communities around the world across a broad range of economic environments
I found his tone about US economy to be a bit softer than the previous release 3 month ago, in which he said:
In the U.S., consumers continue to spend with solid balance sheets, job openings are plentiful and businesses remain healthy. However, there are significant headwinds immediately in front of us – stubbornly high inflation leading to higher global interest rates, the uncertain impacts of quantitative tightening, the war in Ukraine, which is increasing all geopolitical risks, and the fragile state of oil supply and prices. While we are hoping for the best, we always remain vigilant and are prepared for bad outcomes so we can continue to serve customers even in the most challenging of times
It does sound like things are not as bad as he expected. Some people think there might be a white-collar recession looming but the majority of American workers will be fine due to the tight labor market. If this is true, I suppose this will help America’s income equality problem. Wages of blue-collar workers continue to trend up while wages of white-collar workers normalize. Real estate prices deflate due to higher interest rates, which makes home prices more affordable. It’s probable we are by and large heading for the right direction for middle-class America as long as we can keep inflation under control.