Connect with us

Finance

JPMorgan Earnings Fall But Beat Estimates While Morgan Stanley Mistakes

Avatar

Published

on

Shares of JPMorgan Chase & Co rose on Friday after the mega bank beat analysts’ targets for third-quarter earnings and revenue and said it would beat expectations for net interest income in the next quarter.

On a profitable banking day, Wells Fargo & Co.
WFC,
+ 2.83%

It did not achieve the targeted earnings, but its stock rose as it exceeded revenue estimates.

Morgan Stanley
Ms,
-4.02%

Advertisement

Stocks fell after they failed to meet Wall Street’s earnings and revenue targets.

Citigroup Inc.
c,
+ 1.32%

Shares rose after hitting their earnings mark, although revenue fell 1% after the divestment impact was broken.

In general, banks benefited from higher interest rates and strong trading volumes, but the activity of investment banks’ deals fell sharply. Banks also directed more capital into reserves and off their collective net profit in preparation for a possible economic downturn.

As the largest US bank and sector leader, JPMorgan Chase
JPM,
+1.70%

Advertisement

Its “strong performance” last quarter, in the words of CEO Jamie Dimon.

The bank said it expects to meet capital requirements under international Basel III banking guidelines and to resume share buybacks in early 2023.

“In the United States, consumers continue to spend with strong balance sheets, jobs are plentiful, and businesses remain healthy,” Dimon said. “However, there are major headwinds right ahead of us — stubbornly high inflation driving up global interest rates, the uncertain effects of quantitative tightening, the war in Ukraine, which adds to all geopolitical risks, and the fragile state of oil supplies and prices.”

Dimon said the bank remains “prepared for bad outcomes” so it can continue to operate even during the most challenging times.

Dimon’s prepared statement comes a day after the CEO announced that the US consumer sector is currently still strong, but that inflation will start to affect people by 2023.

Advertisement

Read also: Dimon, CEO of JPMorgan, says inflation hasn’t dampened consumer spending yet but is giving it time

JPMorgan Chase stock rose 2.6% Friday after it said its third-quarter net income fell 16.7% to $9.74 billion, or $3.12 per share, from $11.69 billion, or $3.74 per share, in the year-ago quarter.

Third-quarter revenue from the mega bank rose to $32.72 billion from $29.65 billion in the third quarter of last year.

Wall Street analysts expected JPMorgan Chase to earn $2.90 per share on revenue of $32.12 billion, according to estimates compiled by FactSet. T

The bank said a net credit reserve that increased by $808 million led to its net income for the fourth quarter, compared to a net reserve of $2.1 billion a year earlier.

Advertisement

Net interest income increased by 34% to $17.6 billion, and net interest income excluding the Markets unit increased by 51% compared to the same period last year to $16.9 billion as a result of higher interest rates.

JPMorgan Chase’s total assets under management fell 13% to $2.6 trillion in the face of losses in the stock market and challenging bond market conditions.

Looking ahead, JPMorgan Chase said it expects net interest income for the fourth quarter to be about $19 billion, ahead of analysts’ estimates of $18.2 billion.

Calling JPMorgan’s results an explosive quarter “would be an understatement” because “the reported numbers do not do justice to the fundamental strength,” said Chris Kotofsky, an Oppenheimer analyst.

The bank’s trading revenue exceeded $6.8 billion, plus net interest income increased 16% sequentially to $17.6 billion, more than expectations of about $1.3 billion, while expenses increased only 2.3% sequentially.

Advertisement

Octavio Marenzi, CEO of management consultancy Opimas, said the bank’s results were “surprisingly strong” and if you cancel its payments to loan reserves, its earnings are basically unchanged.

“Individual lines of business, such as investment banking and mortgages, performed predictably poorly, but this was offset strongly in other areas of lending and commerce,” said Marenzi.

Ahead of Friday’s trading, JPMorgan Chase shares lost 30.9% in 2022 compared to a 17.3% decline in the Dow Jones Industrial Average.
DJIA,
-0.63%

And a 23.0% loss by the S&P 500
SPX,
-1.31%
.

Wells Fargo missed profit target but high stock

Advertisement

Wells Fargo & Co shares advanced 3.1% after the bank reported net income of $3.528 billion, or 85 cents a share, for the quarter ending in September, down from $5.122 billion, or $1.17 a share, in the previous quarter.

The mega bank failed to meet its earnings per share target of $1.09 per share.

Wells Fargo’s revenue rose to $19.505 billion from $18.834 billion last year, ahead of the FactSet consensus of $18.775 billion.

CEO Charlie Scharf said performance was “significantly impacted” by $2 billion, or 45 cents a share, in operating losses “related to litigation, customer processing, and regulatory issues related primarily to a variety of historical matters.”

However, the bank is experiencing historically low delays and high repayment rates, and “the timing of the deterioration in those actions due to high inflation remains unclear.”

Advertisement

The bank set aside $784 million for loan losses after cutting them by $1.395 billion a year ago.

Net interest income increased 36%, while non-interest income decreased 25%, as bank mortgage income decreased.

Citi analyst Keith Horowitz said Wells Fargo had a “good” quarter overall, although larger-than-expected one-time fees and reserve building dampened earnings. Horowitz said Wells Fargo also raised its net interest income forecast “and we’re still seeing an uptick until the 2023 consensus.”

Wells Fargo shares are down 12% in the year to date, ahead of Friday’s trading.

Morgan Stanley shares fall on results

Advertisement

Morgan Stanley fell 3.1% after the investment bank missed Wall Street’s profit and revenue targets amid a dip in deal activity.

Morgan Stanley said its third-quarter net income fell to $2.49 billion, or $1.47 per share, from net income of $3.7 billion, or $1.98 per share, in the year-ago quarter.

Third-quarter revenue decreased to $12.99 billion from $14.75 billion.

Wall Street analysts were looking for earnings of $1.52 per share and revenue of $13.29 billion, according to FactSet data.

“The company’s performance was resilient and balanced in an uncertain and challenging environment, delivering a 15% return on tangible common stock,” said CEO James Gorman. Wealth Management added an additional $65 billion in new net assets and produced a pre-tax margin of 28%, excluding integration related expenses, demonstrating volume and stability despite declining asset values.

Advertisement

Morgan Stanley shares had lost 19.2 percent in 2022 as of Thursday’s close.

City beats goals but stocks lose steam

Citigroup shares rose 1.3% after the bank posted a stronger-than-expected profit, but revenue fell 1% after liquidation-related effects were broken, as growth in net interest income was offset by lower non-interest income.

Citi said its third-quarter net income fell to $3.5 billion, or $1.63 per share, from $4.6 billion, or $2.15 per share, in the year-ago quarter.

Excluding the effects related to the divestment, earnings were $1.50 per share.

Advertisement

Total revenue increased to $18.5 billion from $17.4 billion.

Analysts were looking at earnings of $1.42 per share and revenue of $18.26 billion for Citigroup, according to a survey by FactSet.

Citi said it continues to scale back its operations in Russia, and expects to end nearly all institutional banking services offered in the country in the next quarter. “To be clear, we intend to end our presence in this country,” CEO Jane Fraser said.

Citigroup also said it continues to scale back its business in Russia. It will end “nearly all of our corporate banking” in the next quarter as it winds down its presence there.

Citigroup shares were down 28.9 percent in 2022 as of Thursday’s close.

Advertisement

Read also: JPMorgan and Goldman are still top companies in investment banking, but business is shrinking dramatically in 2022

Source link

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Finance

Core PCE prices in the US rose less than expected; spending gains

Avatar

Published

on

(Bloomberg) — A key measure of U.S. consumer prices posted its second-smallest increase this year while spending accelerated, offering hope that the Federal Reserve’s rate hikes will curb inflation without sparking a recession.

Most Read from Bloomberg

Commerce Department data on Thursday showed that the personal consumption expenditures (PCE) price index excluding food and energy, which Federal Reserve Chairman Jerome Powell stressed this week is a more accurate measure of inflationary sentiment, rose less than expected by 0.2% in October from the previous month.

Compared to a year earlier, the gauge rose 5%, which is down from an upwardly revised 5.2% increase in September.

Advertisement

The overall personal consumption expenditures price index rose 0.3% for the third month and was up 6% from a year ago, still well above the central bank’s target of 2%.

Personal spending, adjusted for changes in prices, rose 0.5% in October, the most since the start of the year and largely reflecting a rise in spending on goods.

Similar to last month’s CPI data, the report shows that while inflation has begun to ease, it is still very high. While a slowdown is certainly welcome, Powell stressed on Wednesday that the US is far from price stability and that it will take “significantly more evidence” to provide comfort that inflation is in fact declining.

Policymakers are expected to continue raising interest rates next year, albeit at a slower pace, and remain on hold for some time.

The median estimate in a Bloomberg survey of economists was for a 0.3% monthly increase in the core PCE price index and a 0.4% advance in the overall measure. The S&P 500 rose, the dollar fell, and 10-year Treasury yields fluctuated.

Advertisement

What Bloomberg tells the economy…

The larger-than-expected slowdown in PCE prices in October adds to the case for a gradual increase in the pace of rate hikes at the upcoming FOMC meetings. However, there was strength elsewhere: Consumer spending started the fourth quarter at a strong clip, gains in wage income remained strong, and government distributions of refundable tax credits — which boosted income — likely just aren’t a one-off.”

Andrew Hesby and Eliza Winger, economists

For the full note, click here.

Advertisement

Supported by a flexible labor market and continued wage increases, the pick-up in household spending points to a strong start for GDP in the fourth quarter.

Inflation-adjusted expenditures for goods jumped 1.1% in October, driven by new vehicle purchases. Spending on services rose 0.2%, supported by expenditures on health care, food services, accommodation, housing and utilities.

However, it is unclear whether consumers will be able to maintain this momentum in 2023.

With inflation continuing to outpace wage gains, many families are relying on savings, stimulus checks from some state governments, and credit cards to keep spending. There is growing concern that tight monetary policy will push the US economy into recession.

Low savings rate

Advertisement

The Commerce Department report showed that the savings rate fell to 2.3% in October, the lowest level since 2005.

Inflation-adjusted disposable income rose 0.4%, the largest rise in three months. Non-price wages and salaries increased by 0.5%. The report also noted that one-time payments issued by countries boosted income in October.

Continued wage gains, particularly in the service sectors, could keep inflation consistently above the Fed’s target for a long time, underscoring the importance of the labor market to the Fed’s decision-making in the months ahead.

A measure of core services inflation that excludes housing and energy, Powell said on Wednesday “may be the most important category for understanding the future development of core inflation,” which was revised in October from the previous month.

Data released on Friday is expected to show that employers added another 200,000 jobs in November, while the unemployment rate remained at a historically low level of 3.7%.

Advertisement

— with assistance from Matthew Boesler and Kristy Scheuble.

(Adds Market Open, comment from Bloomberg Economics)

Most Read by Bloomberg Businessweek

© Bloomberg LP 2022

Source link

Advertisement

Continue Reading

Finance

Tivic Health has an agreement with ALOM for product supply chain and logistics

Avatar

Published

on

The company also recently announced additional steps to reduce cost and improve margin, including the implementation of a manufacturing partnership with Microart Services, which is expected to reduce printed circuit board subassembly costs by up to 70% while increasing manufacturing scalability.

Source link

Continue Reading

Finance

Poisoning, Adultery, Incest, Murder, and Mayhem: A Family History of Humankind

Avatar

Published

on

A lot of world dates have popped up in the past few years, but this one is different. It is a family history of the world–not a global history of families, tracing how marital unions evolved from the loose alliances common to hunter-gatherers through the strict patriarchy of peasant societies to the dizzying diversity of residential groups in the twenty-first century, but rather a history of the world as evidenced by the lives of specific families.

Simon Sebag Montefiore, whose previous books included a living history of the Romanovs, begins with the oldest known person of his name, an accountant named Kushim, who lived in the third millennium BC in the Middle East.

As it progresses through time, the geographic range of The world: a family history It expands steadily. By 1150 BC, the story has expanded to include King Wuding of the violent, ancestor-worshipping Shang dynasty of China, who ruled with his favorite wife, Lady Hao. By 800 BC, we hear of King Alara of Kush, who is believed to have married his sister and built mud-brick pyramids in what are now Egypt and Sudan. In the sixth century B.C., we join the greedy Alcmaeonids in Athens; Around 300 BC, we meet King Chandragupta and his mother in India; And by the second century AD, we find ourselves in Tikal at the court of the bloodthirsty Mayan clan of Yax Ehb Xook, or “First Step Shark”.

By the 19th century, Sebag Montefiore’s novel had become truly international, casting characters from Kamehameha in Hawaii with his 30 wives and his 500-pound girlfriend/adviser Kaahumanu, through King Gezo of Dahomey, whose three thousand “wives” in his army fought for English Victoria and her wise husband and the sentimental Albert, whose 42 descendants went on to thrones across Europe. Another exceptional story follows, all very well told. It’s hard to stop turning pages – and that too, since there are more than a thousand of them.

Advertisement

One of the most common critics of world history is Jared Diamond Guns, germs and steel Or Yuval Noah Harari Sabines is that it is about the enormous impersonal forces of geography and evolution, and hardly has a place for the very important people who have already made history. The family-centered Sebagh Montefiore alternative is the perfect antidote, reveling in the outspoken quirks and perversions of its human representatives.

A big part of the author’s challenge is that the nature of our evidence changes a lot over time. Until only a few centuries ago, many of our sources were written by wealthy and educated men and most of them were written. This requires him to focus heavily on a narrow elite of wealth and birth, but he tries very hard to give a voice to pre-modern women—in fact, it’s so hard that our perspective becomes distorted in two different ways.

One of them includes the kind of women we hear about. Pericles of Athens is supposed to have said, “Women’s greatest glory, is the least spoken of by men”—implying that young girls tend to get lost in the historian’s gaze.

The women who access the pages of Sebagh Montefiore constitute something of a catalog of delinquents, constantly betraying, torturing and/or doing to death their relatives. Whether Olympias of Macedon or Catherine the Great was truly as troubling as the men put it is still open to debate, but the ways men chose to write about women mean we hear more monsters like Messalina, who – it has been claimed – made Roman Emperor Claudius’ life very miserable, in comparison. With delightful people like Julius Caesar’s daughter, who shared bliss with Pompey the Great until she died in childbirth.

Advertisement

One of the few things we know about Julia, however, is that when she married Pompey she was only 14 while her new husband was 57. This is a second approach to the exceptional women who feature strongly in the first 600 pages or so. From the scientist may mislead us. Throughout most of history, most marriages — even happy ones — have been startlingly masculine.

Take Julia’s father. When he’s not busy conquering Gaul, subverting the Roman constitution, killing scores of rivals, reforming the calendar, writing a two-volume work on Latin grammar and composing some of the most crisp prose ever written, Julius Caesar found time to seduce the wives of just about everyone. A leading man in Rome, a foundling father with an Egyptian queen and an adulterer with outnumbered slaves. Yet Caesar’s wife had to be above suspicion. And when she failed to meet his standards, she had to go.

The Sebagh-Montefiore families are largely unhappy. Immediate marital misery, such as Napoleon’s neglect of Empress Josephine, is the least of them. I soon lost count of husbands beating wives, wives killing husbands, and parents of both sexes killing unfit children.

But my vote for the greatest house in history goes back to Temujin, the Mongol boy who grew up to be Genghis Khan. His father, Yesugei, kidnapped his mother, Hoelun, from her original husband, impregnated her, and renamed her Temujin Temujin Temujin after a man he killed. Temujin was then forgotten by Yesugei and Hoelun when they moved from camp to camp and did not wander back to retrieve him for a year. Then the Yesugei tribesmen killed him, drove out Hoelun, stole her animals and left her to starve. Temujin supported her by trapping the rats. It wasn’t long until he killed his half-brother, blood brother and men who kidnapped and raped his fiancée, before graduating to several million hapless people from the Pacific Ocean to the Volga, taking their lives “where the lines of writing were erased from the paper,” according to a Persian survivor.

Advertisement

However, the regularly repeated fact that Genghis was so active in the bedroom that his blood now runs in the veins of 16 million people seems to be wrong. According to a paper published in 2018, it was the migrating Mongols collectivelynot a single sex-crazed killer, who has spread the Y chromosome C3* star cluster across Asia.

Although Tolstoy believed that every unhappy family is unhappy in its own way, Sebagh Montefiore all tend to be unhappy in somewhat similar ways. Nobody watched TV dramas like this Succession, or reading any Shakespeare, you would be surprised to read that the families of the rich and famous are awful. But where the dramatists work their magic by showing how these crazy families are bound together by love—sick and twisted as they may be—almost as strong as their hate, the Sebagh-Montefiore families have less redeeming features. As the book went on, I regularly found myself wondering why they hadn’t killed each other even earlier.

Individually, Sebag Montefiore’s vignettes are fascinating, if often in an annoying way. But taken together, hundreds of horror stories could undermine anyone’s faith in human nature. “Leaders who trust no one usually trust family,” the author tells us near the end of the book, but he makes it hard to see why. There seemed to be no end to poisoning, adultery, and incest, not to mention flaying and burning; And if the book has a real flaw, perhaps this is it. “There is such a thing as too much history,” notes Sebag Montefiore.

It wasn’t always obvious, as the family story in Family Story accumulated across 1,250 pages added what each new example added, other than simply moving the narrative forward. The book might have benefited from a smaller focus, with fewer examples chosen to illustrate a tighter range of topics.

Advertisement

the scientist It begins with a group of roughly one million-year-old footprints excavated on a beach in Habsburgh, England in 2013, which appear to belong to a family; Even the oldest footprints from Latoli in Tanzania, dating back 3.7 million years, may also belong to population groups and/or kinship groups.

There is no doubt that the family is the central institution of human history, and Sebag Montefiore’s look at the last five thousand years is constantly entertaining and intriguing. However, it clearly did not lead him to any concrete conclusions. This interesting book is well worth the read, but there should be more to say.

the scientistFamily history Written by Simon Sebag Montefiore, Weidenfeld & Nicholson, £35 / Knopf $45, 1,344 pages

Ian Morris is professor of classics at Stanford University and author of the book Geography is Destiny: Britain and the World, a 10,000-Year History (Profile personly)

Source link

Advertisement

Continue Reading
Advertisement

Trending