Executives for JPMorgan Chase and Wells Fargo issued cautious statements about the economic outlook for the year with their Q1 results early Friday. JPMorgan Chase topped expectations. Wells Fargo and BlackRock posted mixed results. Bank of New York Mellon cleared forecasts.
JPMorgan reported earnings of $5.07 per share to beat FactSet views for $4.63 per share. Revenue increased 8% to $45.31 billion, also beating estimates for $43.99 billion.
CEO Jamie Dimon noted that investment banking fees rose 12% during the quarter, but clients have become "more cautious" amid the increased market volatility from geopolitical and trade-related tensions. Dimon said that, "the economy is facing considerable turbulence" due to tariffs, trade wars, ongoing sticky inflation, high fiscal deficits, with still-high asset prices and volatility. Potential positive drivers include tax reform and deregulation.
"We hope for the best but prepare the firm for a wide range of scenarios," Dimon said in the release.
JPM stock jumped almost 4% Friday. Shares have dropped, 3.7% this month, retreating from their Feb. 19 record high of 280.25.
Wells Fargo
Wells Fargo earnings rose to $1.39 per share, to beat views for $1.23 per share. Revenue declined 3.4% to $20.15 billion, missing forecasts for $20.72 billion.
"We support the administration's willingness to look at barriers to fair trade for the United States, though there are certainly risks associated with such significant actions," Wells Fargo CEO Charlie Scharf said in the release. "Timely resolutions which benefits the U.S. would be good for business, consumers and the markets. We expect continued volatility and uncertainty and are prepared for a slower economic environment in 2025, but the actual outcome will be dependent on the results and timing of the policy changes."
Wells Fargo fell 1% Friday.
WFC stock retreated 4.9% Thursday, reversing Wednesday's rebound which narrowly regained support at the stock's 200-day moving average.
Wells Fargo is down almost 13% over the past month, having fallen from its late February all-time high of 81.50.
BlackRock
BlackRock earnings increased 15% to $11.30 per share adjusted, ahead of estimates for $10.08 per share. Total revenue increased to $5.28 billion, just below expectations for $5.29 billion.
Shares of BlackRock climbed 2.3% Friday.
BLK stock fell 4.3% Thursday, marking a 7.2% decline over the past month. BlackRock on Jan. 31 peaked at a record 1084.22 but has been in a downtrend since.
Bank Of New York Mellon
Bank of New York Mellon earnings increased 26% to $1.58 per share, which beat expectations for $1.50 per share. Total revenue climbed 6% to $4.79 billion, also ahead of views for $4.76 billion.
CEO Robin Vince said the bank is "prepared for a wide range of macroeconomic and market scenarios as the outlook for the operating environment becomes more uncertain."
Bank of New York Mellon shares rose 1.4% Friday.
BK stock slid 3.5% Thursday, with shares trading between their 10-day and 200-day lines.
Shares are down from their March 3 all-time high of 90.43 and have retreated 7.4% over the past month.
Analyst Views
Morgan Stanley analysts on Monday cut their outlook on large and midcap banks, citing concerns over President Donald Trump's tariff policies, Bloomberg reported. The firm lowered their view on the banking sectors to in-line from attractive, warning that the policy for higher tariffs increases the risk of a recession and threatens to smother a rebound in deal making.
"Trade developments move our base case to a significant gross domestic product slowdown, with risk of our bear case recession scenario rising sharply," analysts led by Betsy Graseck wrote in a note.
The note cut Goldman Sachs to equal weight from overweight due to its exposure to investment banking revenues. Those have the "fastest-twitch response within the financials sector to recession risk and deteriorating market conditions," according to Graseck's group. The analysts added that investment banking deteriorates "much faster than loan growth at traditional commercial banks."
Fed Sidelined By Tariffs
Morgan Stanley also sees bank executives slashing their revenue outlooks. "With recent market volatility, clearly the outlook for investment banking and wealth fees needs to be tempered," the firm wrote.
The latest research note comes after Morgan Stanley on April 3 said it no longer expects a Federal Reserve rate cut in June. Michael Gapen, U.S. chief economist for Morgan Stanley, wrote that tariff-induced inflation would keep the Fed sidelined. Meanwhile, larger, longer-lasting tariffs could weigh further on investor growth expectations. That could lead to the deterioration of asset prices and worsen the outlook for consumer spending.
Elsewhere, BofA in a research note last week said it expects banks to strike a cautious tone for their Q1 results. The firm predicts JPMorgan, Wells Fargo and Morgan Stanley will emphasize downside risks driven by policy uncertainties. BofA said it is "too soon to expect meaningful credit cracks," but there is potential for reserve increases based on the macro environment.
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