Banks' Boost in Earnings Tempered by Tariff Turmoil
JP Morgan, Wells Fargo, Morgan Stanley and Blackrock report this morning.
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Bank earnings are usually the first to kick off earnings season and JP Morgan JPM once again did not disappoint. The financial giant logged a nice profit of $14.6 billion, $5.07 per share, which beat estimates handily.
But CEO Jamie Dimon warned of global economic uncertainties, thanks to the trade war. The bank had strong performance over the quarter, revenue up 10% year over year. The trading desk performed well, and attributed that success to increased market volatility. The company set aside 3.3 billion to cover bad loans, up from 1.9 billion a year ago, announcing a big 7 billion share buyback and boosting its dividend by 12%.
Morgan Stanley MS also reported a fine quarter, beating estimates by .39 cents per share. Revenue rose 17.2% year over year and was more than a billion ahead of estimates. The company executed well across different categories, wealth management was a standout performer. Equity underwriting was down 25.8% but equity trading revenue was up a robust 45%.
Wells Fargo WFC had a beat as well, profit rose 6% in the first quarter as the company collected more fees in wealth management and investment banking. The CEO warned about the effect of U.S. tariffs on their business and possibly slowing economic growth. The CEO said also he expected continued volatility to roil markets for some time.
Blackrock BLK is the world's largest money manager and flexed its muscles: Assets grew to 11.58 trillion, about 10% higher than a year ago. Yet, net income declined to 9.64 per share vs. 10.48 a year ago. The financial services company blamed the weakness in stocks during the first quarter on fading optimism over the new president. It also said tariff implementation soured investor appetite.
Morgan Stanley is a holding the Pro Portfolio.
