• Video
  • JPMorgan Shares Tumble After Tempering Revenue Optimism

JPMorgan Shares Tumble After Tempering Revenue Optimism

Show Transcript
Bloomberg Sep 10 19:52 · 9945 Views

JPMorgan Chase President Daniel Pinto said analysts are being too optimistic in projecting next year’s expenses and net interest income, causing shares to fall the most in more than four years.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more

Transcript

  • 00:00 What exactly did Daniel Pinto, who's the president of JP Morgan Chase, say about current estimates for results?
  • 00:05 Pinto was there at the Barclays conference and he made the point about how the
  • 00:09 analysts expectations, especially for net interest income,
  • 00:12 is a bit too high.
  • 00:14 He pointed about the Nii estimates, the expense estimates, and it does appear that the stock has taken a dive following those comments.
  • 00:22 It's down about 7%, the most since June 2020.
  • 00:24 But at the same time, I'd probably say
  • 00:26 JP Morgan executives must be a little bemused.
  • 00:29 For a while, they've been talking about how they've been over earning from Nii.
  • 00:33 We know the Fed is going to start cutting rates, so it is likely to come down.
  • 00:38 But
  • 00:38 analysts will tell you
  • 00:40 every time JP Morgan has been putting out a target there for the last couple of years, they've been meeting it and beating it.
  • 00:46 So maybe their expectation optimism wasn't misplaced.
  • 00:50 Pinto has come out there and said it probably is misplaced.
  • 00:53 It needs to be revised lower.
  • 00:54 OK, so there was this game of setting the bar low and beating it.
  • 00:57 What are the vibes at this conference?
  • 00:58 Because Goldman Sachs made some remarks yesterday that didn't exactly set the tone
  • 01:03 very kindly for today.
  • 01:04 No, that's absolutely fair.
  • 01:05 The mood music out of this conference is certainly downbeat.
  • 01:08 Goldman Sachs and Morgan Stanley both talked about let's talk about the investment banking side of the business.
  • 01:14 It's
  • 01:15 good in terms of conversations, but not necessarily in terms of revenue realization.
  • 01:21 Morgan Stanley said that
  • 01:22 M&A and IPO revenue, through the end of the year at least, will remain below historical trend lines.
  • 01:27 I think the market is impatient for that revival to land and actually turn into real revenue.
  • 01:33 We also talked about trading not being as great as last year.
  • 01:35 And on the consumer side, you've heard commentary from both Citi and Ally Financial that gives us some reason for pause, and that's being reflected in the bank stocks.