Earnings Beat
Shares in US banking firm JP Morgan are trading over 2% higher pre-market on Monday. Buyers continue to show demand for the stock following a solid Q2 earnings release. JP Morgan posted earnings of $1.38 per share last month, firmly beating Wall Street estimates of a $1.04 EPS. The bank also posted revenues of $33 billion, beating estimates of $30.3 billion.
Dimon Notes Uncertainty in Outlook
Commenting on the results, JP Morgan CEO Jamie Dimon said:
“Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy. However, we are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm.”
Dimon’s message of uncertainty is one that has been shared by many CEO’s during this latest earnings season. While the COVID-19 virus has calmed down to a large extent, there is still a great deal of concern over the prospect of a further severe outbreak of the virus. Health experts are warning that winter could see a second spike in the spread of the virus.
Record Trading Revenues
Traders had been paying close attention to JP Morgan’s release, given that they were the first major lender to report Q2 earnings. Despite a solid beat on headline earnings and revenues, there were some negatives in the release.
JP Morgan set aside $8.9 billion for loan losses which took a little shine off the report. However, the solid increase in the bank’s trading performance helped offset some of the concerns linked to loan losses.
Trading revenues soared by 79% over the quarter to a record $9.7 billion, mainly driven by a strong increase in fixed income trading.
The bank’s bond traders posted revenues of $7.3 billion over the quarter, marking a 120% increase year on year and firmly surpassing market expectations for a $5.84 billion reading.
JP Morgan Holds Support
JP Morgan shares have turned lower since the post-lockdown recovery highs which peaked around the 116 level. However, still above the rising trend line from year to date lows, price has found support at the 91.03 level. While this level holds the focus is on further upside in the near term. The next two key resistance levels to watch are the 101.17 level and the 104.13 level above.
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