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Miami Herald
20-05-2025
- Business
- Miami Herald
Jamie Dimon warns investors about future economic pain
We're not out of the economic woods yet. At least not according to JP Morgan JPM CEO Jamie Dimon, who spoke Monday at the bank's annual investors conference. The fear and trepidation that markets felt when President Donald Trump first unveiled his tariff plan has only been matched by the exuberance felt since the White House announced a 90-day pause on the tariffs. Related: Jamie Dimon sends curt 6-word response to tariff war The Nasdaq is up 18% over the past four weeks, the Dow Jones Industrial Average is up more than 9.3%, and the S&P 5 is up nearly 13% over the same time period. However, the threat of tariffs still hangs over the heads of every country negotiating with the U.S. and every business in between. In Dimon's view, the pause on tariffs doesn't even begin to rectify the damage Trump's economic agenda has done to the economy. "It's an extraordinary amount of complacency," Dimon told investors Monday, according to the Wall Street Journal. Image source: Triballeau/AFP via Getty Images Dimon has flip-flopped his position on tariffs recently. In January, he advised investors to "just get over it" and stop complaining about tariffs because they are "good for national security." But it seems the more time Dimon has had to digest that White House talking point, the less true it has become in his own mind. Now he believes that even the scaled-back version of Trump's tariffs is "pretty extreme." Dimon also now believes that the risk of an economic slowdown is being underappreciated and that the stock market could easily slump soon as the higher costs for goods finally hit companies' bottom lines. Related: Analyst resets recession risk after Jamie Dimon's message on economy Tariffs could lead to a 10% market selloff, according to Dimon, as companies lower their earnings estimates. The economic uncertainty could also lead to a credit crunch that would hurt companies accustomed to easy credit access. Perhaps most concerning about Dimon's comments is his belief that even central banks will be powerless to prevent the worst-case scenario from happening, should the economy reach the tipping point. "We have what I consider almost complacent central banks that think they are omnipotent," Dimon said. "They just set short-term rates." Jamie Dimon is singing a different tune in recent weeks than he was at the beginning of the year when Trump was elected. Back then, he was telling people complaining about the specter of tariffs to "get over it." Even more recently in March, Dimon still wasn't taking the tariff situation too seriously. "I don't think the average American consumer who wakes up in the morning and goes to work…changes what they're going to do because they read about tariffs," Dimon said. "But I do think companies might." But ever since the actual rollout of the tariffs, Dimon has been more forceful. On April 9, Dimon warned that things "could get worse if we don't make some progress here" on tariff negotiations. "If you want to calm down the markets, show progress in those things, then let Scott [Bessent] take the time," he said on Fox Business. "Trade deals are very large and very complex. They can't be done overnight, but you really have to have teams working on them to get them right." When asked in that interview if he thought a recession was forthcoming, Dimon said, "Probably that's a likely outcome." Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Wall Street Journal
29-04-2025
- Business
- Wall Street Journal
JPMorgan Hires CDH Investments Chief to Strengthen Asia Pacific Push
JPMorgan JPM -0.14%decrease; red down pointing triangle has appointed the chief executive of Chinese alternative asset manager CDH Investments as its new vice chair of Asia Pacific, marking the latest major hire by the U.S. bank as it seeks to expand its business in the region. Alex To, who has over three decades of experience in banking and alternative asset management, will be based in Hong Kong and report to Sjoerd Leenart, chief executive of JPMorgan Asia Pacific, according to a memo seen by The Wall Street Journal.
Yahoo
07-04-2025
- Business
- Yahoo
JPMorgan, Wells Fargo, Bank of America and Morgan Stanely are part of Zacks Earnings Preview
Chicago, IL – April 7, 2025 – releases the list of companies likely to issue earnings surprises. This week's list includes JPMorgan JPM, Wells Fargo WFC, Bank of America BAC and Morgan Stanely MS. If you didn't know how banks made money, you would be justified in assuming that their business must be really exposed to tariffs. That will be a logical interpretation of bank stock performance in the ongoing tariff-induced market turmoil. Big banks like JPMorgan, Wells Fargo, Bank of America and Morgan Stanely relative to the S&P 500 index since February 19th. Two of these three banks are on deck to kick off the 2025 Q1 reporting cycle for the Finance sector by reporting their results before the market's open on Friday, April 11th. We all know that the banking business isn't subject to tariffs. But as cyclical operators, their business is heavily exposed to trends in the broader economy, which in turn is seen as weighed down by the ongoing tariffs uncertainty. There is no denying that risks to the broader economic outlook have increased, with many economists raising their recession odds and lowering their GDP growth expectations. Simply looking at the chart above, which shows the performance of these bank stocks since February 19th, makes it clear that market participants see the going getting more challenging for these banks. We intuitively understand this as the demand for credit decreases in a softening economic environment. At the same time, the quality of the bank's assets suffers, as a portion of its existing borrowers are unable to pay back their loans. Monthly loan volume data from the Federal Reserve has been showing a modest acceleration in loan demand in the first three months of the year, with commercial and industrial (C&I) loans and home-equity loans modestly up. The overriding issue for bank stock investors, however, is whether these trends can be sustained in the current macroeconomic environment. The stock market performance of these bank stocks suggests that they aren't hopeful on that count. With respect to credit quality, the problems in the commercial real estate (CRE) market are well-known and already adequately provisioned for at the major banks. Beyond CRE, aggregate bankruptcies in the U.S. have risen significantly from the Covid-driven low of early 2022, but the growth rate has been leveling off in recent months. We see this trend in early-stage credit card delinquencies as well, with the flat year-over-year growth rates in recent months indicative of favorable developments with respect to net charge-off rates this year. As with loan demand, the key question on the credit quality front will be expectations for the coming periods in a macroeconomic backdrop that is at best showing moderating growth, if not an altogether recessionary downturn. The outlook for the investment banking business is likely the biggest victim of the deterioration in market sentiment. This is notable, as management teams have consistently flagged the steady expansion in deal pipelines in recent quarters. At the start of the year, many in the market had been expecting to see signs of the hoped-for rebound in these Q1 results, but that has now been delayed, at least while the tariffs issue is front and center for the market. JPMorgan is expected to report $4.60 per share in earnings (down -0.7% year-over-year) on $43.01 billion in revenues (up +2.6% YoY). The stock was up nicely on the last earnings release on January 15th, reflecting positive commentary about the outlook. Estimates have been steadily going up, with the current $4.60 per share estimate up from $4.54 a month ago and $4.25 three months back. Wells Fargo is expected to report EPS of $1.23 (down -2.4% year-over-year) on $20.8 billion in revenues (down -0.3% YOY). Estimates for Q1 have largely been stable since the quarter got underway, with the current $1.23 estimate down from $1.24 a month back but up from $1.19 per share three months back. Wells Fargo were shares up following the last quarterly release on January 15th. For Morgan Stanely, the expectation is of $2.32 per share in earnings (up +14.9% YOY) on $16.8 billion in revenues (up +11.2%). The revisions trend has been positive, with analysts nudging their estimates higher since the quarter got underway. As with JPMorgan and Wells Fargo, Morgan Stanley shares were also up following the last quarterly release. The Zacks Major Banks industry, of which JPMorgan and Wells Fargo are a part, is expected to earn +0.7% higher earnings in 2025 Q1 on +5.3% higher revenues. Please note that this industry brought in roughly 50% of the Zacks Finance sector's total earnings over the trailing four-quarter period. Q1 earnings for the Zacks Finance sector are expected to be up +1.8% from the same period last year on +2.8% higher revenues. Despite the big bank stocks' outperformance over the past year, they are still cheap on most conventional valuation metrics. Relative to the S&P 500 index, the Zacks Major Banks industry is currently trading at 61% of the S&P 500 forward 12-month P/E multiple. Over the last 10 years, the industry has traded as high as 78% of the index, as low as 52%, and median of 62%. The Q1 reporting cycle will really get going this week with the aforementioned bank results. But several companies with fiscal quarters ending in February have been reporting results in recent weeks. Thus far, we have seen such February-quarter results from 19 S&P 500 members. All of these February-quarter results are combined with our March-quarter results. Total earnings for these 19 index members are up +9.4% from the same period last year on +5.7% revenue gains, with 57.9% of the companies beating EPS estimates and 68.4% beating revenue estimates. As you can see here, these early companies appear to be struggling to beat consensus estimates, with the EPS beats percentage for this group of companies the lowest in the preceding 20-quarter period. This is disconcerting, but we want to caution against reading too much into these early results, given the sample size. The expectation is that Q1 earnings will be up +6% from the same period last year on +3.7% higher revenues, which would follow the +14.1% earnings growth on +5.7% revenue gains in the preceding period. We have been experiencing a relatively high magnitude of negative revisions to estimates for the current period (2025 Q1), even before the more recent signs of weakness in data that drove the recent run of soft guidance from several companies. As noted earlier, these are more negative revisions to Q1 estimates since the start of January compared to the comparable periods of the preceding few quarters. Not only is the magnitude of negative revisions to Q1 estimates more pronounced relative to the last few quarters, but it is also more widespread. Since the start of the period in January, estimates have come down for 13 of the 16 Zacks sectors, with the biggest declines for the Conglomerates, Autos, Basic Materials, Aerospace, Consumer Discretionary, and others. The three sectors whose Q1 estimates have moved up since the quarter got underway are Medical, Utilities, and Construction. The Tech sector, whose estimates have consistently been positive over the past year, is also suffering negative revisions to Q1 estimates. Optimism about the AI investment cycle suffered a psychological blow following China's DeepSeek announcement. The resulting shift in market sentiment has been weighing on the space ever since, contributing to the underperformance of AI-focused stocks this year. Tariff headwinds add to the sector's worries, as a large portion of Tech hardware is manufactured in Asia. The sector still remains a key growth driver in Q1 and beyond, with 2025 Q1 earnings for the Tech sector expected to be up +12.6% on +10.2% higher revenues. A lot will be riding on the evolving earnings expectations for the Tech sector, which has been a pillar of growth over the last two years. The recent run of underwhelming guidance releases are coming at a time of growing anxiety about the macroeconomic backdrop, with many in the market starting to worry about the U.S. economy's near-term growth momentum. Uncertainty about the Trump administration's tariff policies is starting to appear in business and consumer confidence measures, and some have begun to worry that the ongoing public sector job cuts will eventually spill over into the private sector as well. Depending on where the emerging tariff regime settles, earnings estimates will need to come down in response. The ongoing market weakness is essentially a reflection of this diminished earnings expectations. For more details about the evolving earnings picture, please check out our weekly Earnings Trends report here >>>>Looking Ahead to the Q1 Earnings Season Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year. Today you can access their live picks without cost or obligation. 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Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Wells Fargo & Company (WFC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Morgan Stanley (MS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
