JPMorgan’s Record M&A Quarter Overshadowed by Muted Loan Growth

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Yahoo Finance 13 October, 2021 - 08:56am

Fees from advising on deals almost tripled in the third quarter, crushing analysts’ estimates and helping to push the firm’s net income to $11.7 billion.

“JPMorgan Chase delivered strong results as the economy continues to show good growth -- despite the dampening effect of the delta variant and supply-chain disruptions,” Chief Executive Officer Jamie Dimon said in a statement Wednesday. Investment-banking fees jumped 52%, driven by a “surge in M&A activity and our strong performance in IPOs.”

The report provides a look into how the U.S. economy fared in the Covid-19 pandemic as the delta variant spread across the country, undercutting a return to normalcy. JPMorgan’s results also hint at what’s to come when the rest of Wall Street reports third-quarter results this week.

Loan growth has been a particular focus for bank investors frustrated by a lack of progress in the business. Wall Street executives have begun pointing to early indications that small businesses and individual consumers are taking on debt again after government stimulus checks depressed demand during the Covid-19 crisis.

JPMorgan’s consumer and commercial loan growth remained elusive, with period-end consumer loans down 2% and commercial loans down 5%. Still, total loans increased 6% from a year earlier, driven by gains in the firm’s asset- and wealth-management arm and corporate and investment bank.

Chief Financial Officer Jeremy Barnum said the picture for lending is improving, but it will take time before it gets back to normal.

“We expect it to take some time for revolving credit card balances to return to pre-pandemic levels given the amount of liquidity in the system,” Barnum said on a conference call with analysts. He said the bank is optimistic about prospects for growth in revolving card balances.

Shares of JPMorgan, which gained 30% this year through Tuesday, fell 2.2% to $161.64 at 9:49 a.m. in New York.

The firm reported $3.3 billion in investment-banking fees, topping analysts’ estimates for $2.8 billion. Debt underwriting revenue rose to $1.04 billion and equity underwriting climbed to $1.03 billion.

Results were also padded by a $2.1 billion reserve release, a benefit Dimon has downplayed as the biggest U.S. bank released large portions of what it set aside at the onset of the pandemic for potential soured loans.

The bank also lowered its outlook for net charge-offs in the card business to about 2% from a previous forecast of less than 2.5%.

The bank’s traders generated $6.27 billion of revenue in the quarter, down from a year earlier but above the $5.9 billion analysts expected.

Managed revenue was $30.4 billion, up 2% from a year earlier and above analysts’ average expectation of $29.9 billion.

Expenses rose 1% to $17.1 billion, beating analysts’ expectations. The firm has said it expects to spend about $71 billion this year.

Net charge-offs were $524 million, down 56% from a year earlier.

(Updates with comments on loan business starting in seventh paragraph.)

The bank’s strong foundation was resilient during a turbulent third quarter, but that might not be enough to drive stock-price gains.

The COVID-19 pandemic has prompted more Americans to discuss end-of-life plans with close family members, but many still aren't giving enough thought to their long-term care needs, according to a new...

JPMorgan Chase & Co. (JPM) has delivered better-than-expected Q3 results, driven by top-line growth that was aided by robust M&A activity and the strong performance of the company’s wealth management unit. The investment banking and financial services giant also reported credit reserves release of $2.1 billion. Earnings jumped 28.1% year-over-year to $3.74 per share, beating the Street’s estimates of $3 per share. Revenues rose 2% to $30.4 billion, ahead of analysts’ expectations of $29.8 billio

Following the market opening Wednesday, the Dow traded down 0.36% to 34,254.62 while the NASDAQ rose 0.27% to 14,505.47. The S&P also fell, dropping 0.07% to 4,347.49. The U.S. has the highest number of coronavirus cases and deaths in the world, reporting a total of 45,431,160 cases with around 737,580 deaths. India confirmed a total of at least 34,001,740 cases and 451,220 deaths, while Brazil reported over 21,590,090 COVID-19 cases with 601,440 deaths. In total, there were at least 239,595,360

Bank of America reported its third-quarter 2021 financial results today. The news release, supplemental filing and investor presentation can be accessed at Bank of America's Investor Relations website at https://investor.bankofamerica.com/quarterly-earnings.

The fourth-largest U.S. bank has operated since 2018 under consent orders from the Federal Reserve and two other U.S. financial regulators to improve governance and oversight, with the Fed also capping its assets at $1.95 trillion. Analysts on average had expected a profit of 99 cents per share, according to the IBES estimate from Refinitiv.

'The Big Short' guy remains bearish. But he's long on this trio of stocks.

Novavax (NASDAQ: NVAX) has taken investors on a wild roller-coaster ride so far this year. After all of these dizzying gyrations, Novavax appears to be the biggest bargain among the top vaccine stocks. Here's why Novavax stock is absurdly cheap right now.

Guess what many of the 100 most popular stocks on Robinhood have in common right now? CEO Mark Zuckerberg has himself even called for more regulation in the past, knowing that it would help Facebook over the long run.

Worried about inflation? You should be — especially if you own the wrong assets and bet against S&P 500 and growth stocks.

Summer has wound down, the Q3 earnings reports will be coming in over the next few weeks, and every investor can see that the market is hitting a rolling boil. For investors in search of a bright spot, Canaccord Chief Market Strategist Tony Dwyer believes the increasing volatility in the market could lead to attractive entry points. "Our core fundamental thesis remains positive, our tactical indicators coupled with history suggest any further weakness should prove temporary, and we expect the ye

Toymaker Hasbro Inc said on Tuesday longtime Chairman and Chief Executive Officer Brian Goldner has died, two days after he went on medical leave. In a statement last year, Goldner said he had been under continued medical treatment following his cancer diagnosis in 2014. Board member and former CEO of marketing firm InnerWorkings Inc, Rich Stoddart, has replaced Goldner on an interim basis.

Based on analysts' loftiest price targets, these companies could nearly triple or potentially quintuple investors' money over the next year.

For investors seeking the best returns, the decision of where to put the initial investment typically comes down to two choices. Put all the eggs in one big basket, and buy into the market’s giant corporations, the trillion-dollar companies with famously high share prices and a track record of steady growth – or to buy low, find a group of low-cost stocks in companies with sound business footings and high potential upside. It all comes down to just how much of a return do you want. The market's

Bitcoin has set off to a flying start in October with gains of 31%, said one analyst.

Plug Power has had some tailwinds that have helped to make it more attractive to investors of late.

When the financial media mentions "tech stocks," many people equate the term with consumer hardware or business software. After all, those are the companies that get talked about the most, so they're what many of us are most familiar with. For that, you need to find the companies that are behind the scenes.

Market signals are starting to switch, after a long year of steady upward trends in the S&P 500 and NASDAQ indexes. The Federal Reserve has made it clear that it will start tapering bond purchases, likely next month, and that the low-to-zero interest rate policy may end early next year. Q2 GDP growth came in a brisk 6.7%, but forecasts going into 1H22 are predicting a slowdown to the 3% to 4% range. And to top it off, inflation is up, with the consumer price index gaining 4.3% yoy in August of t

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Bitcoin Basher Jamie Dimon Insists It's a Worthless Investment

Motley Fool 13 October, 2021 - 06:16am

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by Maurie Backman | Published on Oct. 13, 2021

JPMorgan Chase CEO Jamie Dimon isn't one to hide his opinions. The financial power player has long been critical of cryptocurrency. And this week, he doubled down on his stance on Bitcoin, going as far as to call it "worthless."

Dimon insists he doesn't want to be a spokesperson on the crypto front. And JPMorgan Chase clients are allowed to buy and sell Bitcoin. But in Dimon's mind, it's not something worth owning. And he's convinced that regulations are going to come down the pike that make it harder to buy and sell.

He may be correct in that regard. Recently, the Biden administration began discussing ways to impose bank-like regulations on the crypto industry. And the impact that could have on investors isn't fully clear.

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Regardless of what Dimon thinks about the popular crypto, it's hard to argue the fact that Bitcoin, like other digital currencies, is an extremely volatile investment. So buying it is risky from that standpoint alone.

But while Bitcoin may be volatile, it's far from worthless right now. In recent weeks, its value has surged. In fact, Bitcoin has nearly doubled this year, and investors who stuck with it may be sitting on a sweet pile of cash right about now.

Still, Dimon's core argument about Bitcoin is that it lacks intrinsic value. And that might apply to cryptocurrency as a whole.

Investors who buy stocks get to own a piece of a company that sells a product or service and therefore has a viable revenue stream. As such, it's fairly easy to attribute actual financial value to a share of stock.

Bitcoin, and other forms of crypto, are only worth as much as investors are willing to pay for them. And it's difficult to determine whether Bitcoin and other currencies like it have staying power.

The future value of Bitcoin will hinge heavily on whether it becomes a widely accepted form of currency. If that doesn't happen, its value could sink. Plus, we don't know what regulations might get implemented that make it a less attractive investment from a tax perspective.

So where does that leave you as an investor? It's simple -- if you have the appetite for Bitcoin and are willing to assume the risks involved, go ahead and buy some. Maybe you'll lose money. Or maybe you'll gain some. It's impossible to know. On the other hand, if you want to put your money into an investment whose value can be more easily measured, you may want to favor stocks over Bitcoin.

Though Dimon isn't shy about disliking Bitcoin, he's not the only big name in the financial world to voice his concerns about it. Investing giant Warren Buffett, for example, has long cautioned against sinking money into crypto.

If you're going to buy Bitcoin or another digital currency, you may want to go in with the assumption that your investment may become worthless over time. Embracing that possibility may be a better approach than assuming Bitcoin bashers are dead wrong.

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