An inflation warning from JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon sent JPM stock down despite an earnings beat.
For the first quarter, the bank reported net income of $13.4 billion, $4.44 per share, on revenue of $41.9 billion. Analysts had expected earnings of $4.17 per share.
JPM stock opened this morning at about $188 per share, and its market capitalization is about $544 billion.
Dimon in the Rough
Net interest income, the profit made from lending money, rose 11% from a year ago to $23.2 billion. But it was down 4% from the fourth quarter of 2023. Analysts were also concerned about expenses.
Dimon’s shareholder letter also spooked investors. He expressed concern over wars and quantitative tightening and said a new world trade order like the Bretton Woods agreement that followed World War II might be needed. Dimon also warned that deficits remain high and inflation remains sticky. Rather than expecting lower interest rates, Dimon warned of 8% rates, saying the odds of a “soft landing” are less than the 70%-80% analysts expected.
Higher rates could hurt the bank’s commercial real estate business, which Dimon said last month was “handling the stress.” Now CFO Jennifer Piepszak, a potential Dimon successor, is warning there is no “light at the end of the tunnel” for the sector.
The stock’s action may also be profit-taking. JPMorgan stock is up 16% in 2024. It earned $49.4 billion in 2023 and is on pace to earn more this year.
JPM Stock: What Happens Next?
Dimon’s concerns haven’t played out in the past, but his repetition of them is weighing on the market, which will open down.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
