JPMorgan Chase CEO Jamie Dimon recently issued a warning about inflation. This warning led to a decline in JPM stock, despite the bank’s impressive earnings report.
In the first quarter, JPMorgan reported a net income of $13.4 billion, or $4.44 per share, on revenue of $41.9 billion. This surpassed expectations of $4.17 per share.
Despite these figures, JPM stock opened at around $188 per share. The market capitalization was approximately $544 billion.
The bank’s net interest income, which is the profit generated from lending money, increased by 11% from a year ago, reaching $23.2 billion. However, this number was down by 4% from the fourth quarter of 2023, which led to some concern over expenses.
In his shareholder letter, Dimon raised concerns about wars, quantitative tightening, and the possibility of a new world trade order. This new order could be similar to the Bretton Woods agreement that came after World War II.
He also highlighted the ongoing issue of high deficits and persistent inflation. Instead of predicting lower interest rates, Dimon warned of 8% rates. He stated that the chances of a “soft landing” are lower than the 70%-80% that analysts had anticipated.
Higher interest rates could negatively impact the bank’s commercial real estate business. Despite Dimon’s claim last month that the sector was “handling the stress,” CFO Jennifer Piepszak, who is considered a potential successor to Dimon, now cautions that there is no “light at the end of the tunnel” for this industry.
Some believe that the stock’s recent performance may be due to profit-taking. JPMorgan stock has risen by 16% in 2024, earning $49.4 billion in 2023 and on track to surpass that figure this year.
While Dimon’s concerns have not materialized in the past, the repetition of these warnings is weighing on the market. This has caused it to open lower.
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