Latest news with #JPMorgan Chase
Yahoo
4 days ago
- Business
- Yahoo
The American consumer is proving to be resilient, at least according to their bankers
A version of this post first appeared on Despite weak consumer sentiment, an uptick in household debt delinquencies, and anecdotal reports of financial distress, the overarching narrative remains that consumers as a whole are healthy, and they are spending. This is important because personal consumption accounts for about 70% of GDP. On Thursday, we learned monthly retail sales grew 0.6% in June to $720 billion. This metric is hovering near record highs. Retail sales remain very strong. (Source: Census via FRED) This trend was confirmed last week by America's largest banks, which know exactly how much money people have, how much they're spending, and how they're paying for it. "The consumer basically seems to be fine," JPMorgan Chase CFO Jeremy Barnum told analysts on Tuesday. "You see a little bit more stress in the lower income bands than you see in the higher income bands. But that's always true. That's pretty much definitionally true. And nothing there is out of line with our expectations." Barnum acknowledged concerns about debt delinquencies but argued there was little cause for alarm. "Consumer credit is primarily about the labor market," he explained. "In a world with a 4.1% unemployment rate, it's just going to be hard, especially in our portfolio, to see a lot of weakness." The state of consumer spending can be described as cooling, but also "still positive" and "still growing," Barnum said. Other banks echoed that sentiment while addressing their second-quarter profits, which beat analysts' forecasts. "Consumer health remains very strong," Citigroup CFO Mark Mason said. "We do anticipate further consumer [spending] cooling in the second half as ... tariff effects play through." JPMorgan's debit and credit card spending volume in Q2 was up 7% from last year. Citi's branded credit card spending volume increased by 4%. Bank of America said its credit and debit card spending was up 4%. Wells Fargo's purchase volume was up 4% for its debit cards and 8% for its credit cards. BofA card data reflects growth in spending, but the growth has been cooling. (Source: BofA) "Consumers remained resilient, with healthy spending and asset quality," BofA CEO Brian Moynihan said. "Consumers and businesses remain strong as unemployment remains low and inflation remains in check, credit card spending growth softened very slightly in the second quarter, but is still up year over year," Wells Fargo CEO Charlie Scharf said. The big picture 🖼️ As you'll see below in TKer's weekly review of the macro crosscurrents, card spending data from early July shows that consumers continue to spend at a healthy clip. Just because consumers have been resilient doesn't mean they'll remain resilient. As we've been discussing for months, the economic data, while growing, continues to cool. This doesn't mean the economy is doomed to fall into a recession. Rather, it's just an acknowledgement and recognition that it has gotten harder to argue that growth is destiny. For now, we'll just have to keep watching the data — especially the hard data. Because so far, the economy continues to hold up, supported by healthy consumer spending. Review of the macro crosscurrents 🔀 There were several notable data points and macroeconomic developments since our last review: 👎 Inflation ticks higher. The Consumer Price Index (CPI) in June was up 2.7% from a year ago. Adjusted for food and energy prices, core CPI was up 2.9%, up from the prior month's 2.8% rate. (Source: Greg Daco) On a month-over-month basis, CPI was up 0.3% and core CPI increased just 0.2%. If you annualize the three-month trend in the monthly figures — a reflection of the short-term trend in prices — core CPI climbed 2.4%. (Source: Greg Daco) ⛽️ Gas prices tick lower. From AAA: "In the thick of summer, gas prices are laying low with the national average for a gallon of regular going down one cent from a week ago to $3.16. Pump prices have dipped to match the summer of 2021, the last time seasonal gas prices were this low. Meanwhile, a low-pressure system off the Gulf Coast has the potential, albeit low, to strengthen, and it's something to watch as it moves westward. This time of year, tropical activity can have an effect on gas prices if there's damage to refineries or if local flooding affects gasoline distribution or demand." (Source: AAA) For more on energy prices, read: 🛢️ 🛍️ Shopping ticks higher. Retail sales increased 0.6% in June to $720.1 billion. (Source: Census via FRED) Growth was broad-based, with just a couple of categories showing modest declines. (Source: Wells Fargo) 💳 Card spending data is holding up. From JPM: "As of 11 Jul 2025, our Chase Consumer Card spending data (unadjusted) was 6.6% above the same day last year. Based on the Chase Consumer Card data through 11 Jul 2025, our estimate of the US Census July control measure of retail sales m/m is 0.63%." (Source: JPMorgan) From BofA: "Total card spending per HH was up 4.5% y/y in the week ending Jul 12, according to BAC aggregated credit & debit card data. The jump in y/y growth was mainly due to the timing shift in Prime Day & other promotions (Jul 8-11 '25 vs Jul 16-17 '24). Relative to last week, online retail saw the biggest rise in y/y spending growth." (Source: BofA) For more on consumer spending, read: 🛍️ 👍 Consumer sentiment improves from low levels. From the University of Michigan's July Surveys of Consumers: "While sentiment reached its highest value in five months, it remains a substantial 16% below December 2024 and is well below its historical average. Short-run business conditions improved about 8%, whereas expected personal finances fell back about 4%. Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future." (Source: Univ. of Michigan) Relatively weak consumer sentiment readings appear to contradict resilient consumer spending data. For more on this contradiction, read: 🙊 and 🛫 💼 New unemployment claims tick lower — but total ongoing claims tick higher. Initial claims for unemployment benefits declined to 221,000 during the week ending July 12, down from 228,000 the week prior. This metric remains at levels historically associated with economic growth. (Source: DoL via FRED) Insured unemployment, which captures those who continue to claim unemployment benefits, rose to 1.956 million during the week ending July 5. This metric is near its highest level since November 2021. (Source: DoL via FRED) Steady initial claims confirm that layoff activity remains low. Rising continued claims confirm hiring activity is weakening. This dynamic warrants close attention, as it reflects a deteriorating labor market. For more context, read: 🧩 and 💼 🛠️ Industrial activity improves. Industrial production activity in June increased 0.3% from prior month levels. Manufacturing ticked up by 0.1%. (Source: Federal Reserve) For more on economic activity cooling, read: 📉 🏠 Mortgage rates tick higher. According to Freddie Mac, the average 30-year fixed-rate mortgage rose to 6.75%, up from 6.72% last week. From Freddie Mac: "The 30-year fixed-rate mortgage inched up this week and continues to stay within a narrow range under 7%. While overall affordability headwinds persist, rate stability coupled with moderately rising inventory may sway prospective buyers to act." (Source: Freddie Mac) There are 147.8 million housing units in the U.S., of which 86.1 million are owner-occupied and about 34.1 million are mortgage-free. Of those carrying mortgage debt, almost all have fixed-rate mortgages, and most of those mortgages have rates that were locked in before rates surged from 2021 lows. All of this is to say: Most homeowners are not particularly sensitive to the small weekly movements in home prices or mortgage rates. For more on mortgages and home prices, read: 😖 🏠 Homebuilder sentiment ticks higher. From the NAHB: "Builder confidence for future sales expectations received a slight boost in July with the passage of the One Big Beautiful Bill Act but elevated interest rates and economic and policy uncertainty continue to act as headwinds for the housing sector. … the latest HMI survey also revealed that 38% of builders reported cutting prices in July, the highest percentage since NAHB began tracking this figure on a monthly basis in 2022. This compares with 37% of builders who reported cutting prices in June, 34% in May and 29% in April. Meanwhile, the average price reduction was 5% in July, the same as it's been every month since last November. The use of sales incentives was 62% in July, unchanged from June." (Source: NAHB) 🔨 New home construction starts rise. Housing starts increased 4.6% in June to an annualized rate of 1.26 million units, according to the Census Bureau. Building permits ticked up 0.2% to an annualized rate of 1.4 million units. (Source: Census) 🏢 Offices remain relatively empty. From Kastle Systems: "Peak day office occupancy rose to 63% on Tuesday last week, only 1.2 points lower than the post-pandemic record high set in early June.. The average low was on Thursday (7/3) at 36.7%, more than 20 points lower than the previous week. New York City and Chicago experienced the largest decreases in occupancy leading up to the holiday, declining more than 30 points from the previous Thursday to 30.1% and 32.2%, respectively." (Source: Kastle) For more on office occupancy, read: 🏢 😬 This is the stuff pros are worried about. From BofA's July Global Fund Manager Survey: "Trade war triggering a global recession is still viewed as the #1 'tail risk' according to 38% of FMS investors (down from 47% in June). Inflation preventing Fed rate cuts is the 2nd biggest 'tail risk' (20%), while 14% say the biggest 'tail risk' is the US dollar slumping on capital flight." (Source: BofA) (Source: BofA) 📈 Near-term GDP growth estimates are tracking positively. The Atlanta Fed's GDPNow model sees real GDP growth rising at a 2.4% rate in Q2. (Source: Atlanta Fed) For more on GDP and the economy, read: 📉 and 🤨 Putting it all together 📋 🚨 The Trump administration's pursuit of tariffs threatens to disrupt global trade, with significant implications for the U.S. economy, corporate earnings, and the stock market. Until we get more clarity, here's where things stand: Earnings look bullish: The long-term outlook for the stock market remains favorable, bolstered by expectations for years of earnings growth. And earnings are the most important driver of stock prices. Demand is positive: Demand for goods and services remains positive, supported by healthy consumer and business balance sheets. Job creation, while cooling, also remains positive, and the Federal Reserve — having resolved the inflation crisis — shifted its focus toward supporting the labor market. But growth is cooling: While the economy remains healthy, growth has normalized from much hotter levels earlier in the cycle. The economy is less "coiled" these days as major tailwinds like excess job openings and core capex orders have faded. It has become harder to argue that growth is destiny. Actions speak louder than words: We are in an odd period, given that the hard economic data decoupled from the soft sentiment-oriented data. Consumer and business sentiment has been relatively poor, even as tangible consumer and business activity continues to grow and trend at record levels. From an investor's perspective, what matters is that the hard economic data continues to hold up. Stocks are not the economy: There's a case to be made that the U.S. stock market could outperform the U.S. economy in the near term, thanks largely to positive operating leverage. Since the pandemic, companies have aggressively adjusted their cost structures. This came with strategic layoffs and investment in new equipment, including hardware powered by AI. These moves are resulting in positive operating leverage, which means a modest amount of sales growth — in the cooling economy — is translating to robust earnings growth. Mind the ever-present risks: Of course, we should not get complacent. There will always be risks to worry about, such as U.S. political uncertainty, geopolitical turmoil, energy price volatility, and cyber attacks. There are also the dreaded unknowns. Any of these risks can flare up and spark short-term volatility in the markets. Investing is never a smooth ride: There's also the harsh reality that economic recessions and bear markets are developments that all long-term investors should expect as they build wealth in the markets. Always keep your stock market seat belts fastened. Think long-term: For now, there's no reason to believe there'll be a challenge that the economy and the markets won't be able to overcome over time. The long game remains undefeated, and it's a streak that long-term investors can expect to continue.A version of this post first appeared on
Yahoo
16-07-2025
- Business
- Yahoo
Mamdani Talks ‘Intifada', Taxes in Grilling by Business Leaders
(Bloomberg) -- New York City mayoral candidate Zohran Mamdani told business leaders that he would begin to discourage the use of the phrase 'globalize the intifada' after being pressed on his views by Pfizer Inc. Chief Executive Officer Albert Bourla, according to people with knowledge of the matter. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say Mamdani, the 33-year-old democratic socialist who shocked New York City's business and political establishment by beating Andrew Cuomo in last month's Democratic mayoral primary, met Tuesday with about 100 business leaders from the Partnership for New York City. The group is a 350-member coalition of the city's largest banks and media companies as well as investment, real estate and law firms. The meeting, which came at Mamdani's request, is one of several scheduled this week between the Democratic nominee and the business community, which is grappling with the potential impact of Mamdani's leadership on the city. Mamdani campaigned on promises to freeze the rent on affordable housing, and fund free buses and government-run grocery stores with new taxes on corporations and high-earners. JPMorgan Chase & Co. CEO Jamie Dimon last week criticized Mamdani and the Democratic reaction to his election, describing him as 'more of a Marxist than a socialist.' Bourla, whose grandparents perished at Auschwitz, moderated the event. Mamdani, an activist for Palestinian causes, has been criticized for refusing to denounce calls by anti-Israel protesters to 'globalize the intifada,' a reference to the armed Palestinian uprisings against Israel. Bourla in 2020 struck an agreement with Israeli Prime Minister Benjamin Netanyahu to use Israel as a test case for Pfizer's Covid-19 vaccine. In Tuesday's meeting, Mamdani appeared to relent on the matter, the people said, saying he would discourage such language going forward. But on other subjects the Queens assemblyman held firm, reiterating his goals and brushing off concerns about higher taxes by saying wealthy New Yorkers would stay put regardless, the people said. Mamdani also said he'd consider, but wouldn't commit, to keeping Police Commissioner Jessica Tisch, the people said. Her father, Loews Corp. Chairman James Tisch, was at the meeting. Other attendees included Uber Technologies Inc. CEO Dara Khosrowshahi, Hearst Corp. CEO Steve Swartz, Related Cos CEO Jeff Blau, and Centerview Partners' co-founder Blair Effron, the people said. 'Zohran appreciated the meeting today, and felt it was a constructive, honest discussion,' Jeffrey Lerner, a spokesman for Mamdani's campaign, said in a statement. 'We look forward to the opportunity to build on this conversation, even in navigating disagreement on fiscal policy. Zohran continues to believe that working in partnership is the best way to deliver an affordable city for all New Yorkers.' Business leaders who attended the Tuesday event thought Mamdani was 'the most impressive candidate they have seen in generations,' Kathy Wylde, CEO of the coalition, said in an interview on CNBC Wednesday. But Wylde said Mamdani is 'clearly, totally inexperienced' and that she doesn't think the candidate changed the minds of city business leaders. Mamdani also told attendees he would examine the New York City Department of Education for waste and duplication, and that he would look to use the World Cup as an opportunity to build up city infrastructure. Mamdani has been making efforts to consolidate traditional institutions behind his candidacy ahead of November's mayoral race, which could prove unusually competitive in a heavily blue city where the Democratic nominee has been all but assured of victory in recent elections. He will face off against four other candidates: incumbent Mayor Eric Adams, former governor Cuomo, and attorney Jim Walden — all of whom are running as independents — as well as Republican Curtis Sliwa. President Donald Trump, who has described Mamdani as a 'communist lunatic,' said this week that Cuomo should stay in the race, even after losing by more than 12 percentage points to Mamdani in the primary. --With assistance from Aysha Diallo. (Updates with comments by Partnership for New York City CEO in 10th paragraph) Forget DOGE. Musk Is Suddenly All In on AI How Starbucks Is Engineering a Turnaround With Warm Vibes and Cold Foams How Hims Became the King of Knockoff Weight-Loss Drugs Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot The New Third Rail in Silicon Valley: Investing in Chinese AI ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
16-07-2025
- Business
- Bloomberg
Bond Traders Boost Bearish Bets as US 30-Year Yields Eclipse 5%
A bearish tone is taking hold in the Treasury market amid worries over the risk of tariff-fueled inflation and increased government spending in some of the world's biggest economies. In JPMorgan Chase & Co.'s latest Treasury client survey, investors' net long positioning shrank to the smallest in six weeks. That coincides with selling pressure in US government debt, which picked up on Tuesday after June consumer-price data failed to assuage concerns over the impact of trade levies. In response, investors trimmed bets the Federal Reserve will cut interest rates as soon as September.
Bloomberg
15-07-2025
- Business
- Bloomberg
JPMorgan's Jamie Dimon Says the Rush Into Private Credit May Have Peaked
By and Paige Smith Save The biggest US bank isn't itching to buy a company in Wall Street's hottest market. 'You may have seen peak private credit,' JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said on a Tuesday call to discuss second-quarter earnings. 'A little bit,' he added as a caveat, 'I don't know.'
Yahoo
14-07-2025
- Business
- Yahoo
JPMorgan Q2 Earnings Preview: Reading the Consumer Pulse
JPMorgan Chase & Co. (NYSE:JPM) will post Q2 results before the bell on 15 Jul 2025. Given its vast branch and card network that touches millions of households, investors often treat the bank and CEO Jamie Dimon's remarks as an early read on consumer sentiment. They are also keen to hear Dimon's views on tariffs and their potential impact on the economy. Street consensus points to EPS of $4.48 and revenue of $43.9 billion. Ahead of the print, the stock has risen 20% year-to-date and now sits about 3% below the early-July record high, so expectations are elevated. Investors will focus on whether net interest income remains resilient and how much wage inflation and technology spending weigh on expenses. Management last quarter guided for FY 2025 NII "around the mid-$90 billion area," so any tweak could steer estimates. Credit costs warrant attention after Dimon recently put recession odds near 50%. On rates, the 2s-10s yield curve has moved from last year's inversion to a modest 53 bp slope. That is steeper than six months ago but still flatter than the long-run average near 150 bp, which means margin tailwinds are tapering even as trading desks may welcome the extra volatility. Commentary on deposit betas, card-spending trends, and capital returns against Basel III Endgame targets will set the tone for the sector. This article first appeared on GuruFocus. Sign in to access your portfolio
