JPMorgan Q3 earnings beat expectations, stock jumps - Yahoo Finance

IMAGE DISTRIBUTED FOR JPMORGAN CHASE & CO- Jamie Dimon, Chairman and CEO, JPMorgan Chase, speaks at the Chase NYC Flagship, Tuesday, June 25, 2019 in New York. (Adam Hunger/AP Images for JPMorgan Chase & Co.)

JPMorgan Chase (JPM), the largest U.S. bank by assets, reported third-quarter earnings on Tuesday that surpassed Wall Street’s expectations, boosted by broad strength in nearly all its major business lines.

Here were the key figures from the report, compared to consensus expectations compiled by Bloomberg:

• Revenue: $29.3 billion vs. $28.46 billion expected

• Adj. earnings: $2.68 per share, vs. $2.34 per share expected

Revenue for the quarter set a record, and was even higher on an adjusted basis at $30.06 billion.

“The consumer remains healthy with growth in wages and spending, combined with strong balance sheets and low unemployment levels. This is being offset by weakening business sentiment and capital expenditures mostly driven by increasingly complex geopolitical risks, including tensions in global trade,” said CEO Jamie Dimon.

JPMorgan maintained its No. 1 spot for global investment banking fees, with 9.3% of the wallet share this year. Dimon noted that the firm had a record quarter for investment banking fees with "particularly strong performance in [Debt Capital Markets] and [Equity Capital Markets]." Banking revenue for the quarter was $3.3 billion, up 2% from the same quarter a year ago. Investment banking revenue was $1.9%, up 8% on higher underwriting fees.

Total markets revenue came in at $5.1 billion, up 14% from last year. Fixed income revenue rebounded 25% to come in at $3.6 billion, "driven by strong client activity across products." Equity markets revenue slipped 5% to $1.5 billion "reflecting lower revenues in derivatives."

Elsewhere, in the consumer and community bank, credit card sales volume rose 10% in the quarter, while merchant processing jumped 11%.

The stock, traded on the New York Stock Exchange, jumped more than 2% from Monday’s close to trade near $119.

JPMorgan kicked earnings season off for the big financials. Goldman Sachs (GS), Wells Fargo (WFC), Citigroup (C) will report results on Tuesday, followed by Bank of America (BAC) on Wednesday and Morgan Stanley (MS) on Thursday.

This story is developing.

—

Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.

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2019-10-15 11:04:00Z
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WeWork reportedly expected to lay off 2,000 workers as early as this week - CNBC

A WeWork logo is seen at a WeWork office in San Francisco, September 30, 2019.

Kate Munsch | Reuters

WeWork is expected to lay off at least 2,000 people, about 13% of its staff, as soon as this week, the Guardian newspaper reported.

WeWork staff told the Guardian that they believe the cuts will not stop there, suggesting more of the company's 15,000 person workforce could be sacked. The Information reported in September that executives and bankers have discussed cutting up to a third of those workers. The embattled start-up is attempting to turn its fortunes around with painful cost reduction measures.

Employees also told the Guardian that little to no work is getting done at the company and new projects have been put on hold.

WeWork declined to comment to the Guardian. Representatives for the company did not immediately respond to CNBC's request for additional comment.

Last month, the start-up pulled the plug on plans to go public. Its much-anticipated IPO prospectus in August revealed a massive $900 million loss in the first six months of 2019 and drew skepticism over its corporate governance. WeWork had a private market valuation of about $47 billion but its potential value in the public market had been slashed significantly.

There has also been a showdown between former CEO Adam Neumann and SoftBank chief Masayoshi Son, who has invested billions into the start-up. Neumann stepped down last month. It was also reported that SoftBank has readied a financing package to take control of the company and further sideline Neumann, who is also a co-founder.

WeWork rents out office spaces to start-ups, freelancers and enterprises by investing in real estate in some of the most expensive markets around the world. It makes money back over time as companies and individuals pay their rent or membership fees.

Read more about the Guardian's report on WeWork's plans to sack 2,000 staff here.

— CNBC's Alex Sherman and Lauren Feiner contributed to this report.

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https://www.cnbc.com/2019/10/15/wework-reportedly-expected-to-lay-off-2000-workers-as-soon-as-this-week.html

2019-10-15 09:34:38Z
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WeWork reportedly expected to lay off 2,000 workers as early as this week - CNBC

A WeWork logo is seen at a WeWork office in San Francisco, September 30, 2019.

Kate Munsch | Reuters

WeWork is expected to lay off at least 2,000 people, about 13% of its staff, as soon as this week, the Guardian newspaper reported.

WeWork staff told the Guardian that they believe the cuts will not stop there, suggesting more of the company's 15,000 person workforce could be sacked. The Information reported in September that executives and bankers have discussed cutting up to a third of those workers. The embattled start-up is attempting to turn its fortunes around with painful cost reduction measures.

Employees also told the Guardian that little to no work is getting done at the company and new projects have been put on hold.

WeWork declined to comment to the Guardian. Representatives for the company did not immediately respond to CNBC's request for additional comment.

Last month, the start-up pulled the plug on plans to go public. Its much-anticipated IPO prospectus in August revealed a massive $900 million loss in the first six months of 2019 and drew skepticism over its corporate governance. WeWork had a private market valuation of about $47 billion but its potential value in the public market had been slashed significantly.

There has also been a showdown between former CEO Adam Neumann and SoftBank chief Masayoshi Son, who has invested billions into the start-up. Neumann stepped down last month. It was also reported that SoftBank has readied a financing package to take control of the company and further sideline Neumann, who is also a co-founder.

WeWork rents out office spaces to start-ups, freelancers and enterprises by investing in real estate in some of the most expensive markets around the world. It makes money back over time as companies and individuals pay their rent or membership fees.

Read more about the Guardian's report on WeWork's plans to sack 2,000 staff here.

— CNBC's Alex Sherman and Lauren Feiner contributed to this report.

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2019-10-15 06:35:32Z
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US futures point to a higher open - CNBC

U.S. stock index futures were higher Tuesday morning, as traders look ahead to a new earnings season.

At around 04:10 a.m. ET, Dow futures rose 100 points, indicating a positive open of more than 102 points. Futures on the S&P and Nasdaq were both also higher.

Overall, market players are monitoring developments on the trade front. U.S. Treasury Secretary Steven Mnuchin told CNBC that tariffs will go up in December if there is no deal in place with China.

"I have every expectation if there's not a deal those tariffs would go in place, but I expect we'll have a deal," Mnuchin said Monday.

Furthermore, the U.S. has also decided to stop trade negotiations with Turkey and raised its steel prices to 50%. The decision followed an earlier U.S. announcement to remove all U.S. troops from the northern border of Syria with Turkey.

Investors are also looking ahead to a new earnings season. BlackRock, Citigroup, Goldman Sachs, Wells Fargo and J.P. Morgan Chase are set to release their latest performance numbers before the bell. United Airlines and Interactive Brokers will also release earnings after the bell.

On the data front, the Empire State manufacturing figures are due to be released at 08:30 a.m. ET.

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2019-10-15 06:13:44Z
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Don’t get too excited about progress on Trump’s ‘greatest and biggest deal ever’ - MarketWatch

“The greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country,” as President Trump described it, triggered a broad rally in U.S. stocks on Friday. The Dow DJIA, +1.21% and S&P SPX, +1.09% closed off session highs, but buyers are wary amid a report China wants more talks.

Indeed, our call of the day, suggests last week’s bullish reaction may have been overdone.

Morgan Stanley MS, +2.14% says those who are banking on this trade deal wrapping up are getting ahead of themselves and that the deal with China is an “uncertain” arrangement at best, according to a note from strategists Michael Zezas and Meredith Pickett.

“There is not yet a viable path to existing tariffs declining, and tariff escalation remains a meaningful risk,” the bank wrote. “Thus, we do not yet expect a meaningful rebound in corporate behavior that would drive global growth expectations higher.”

Nevertheless, investors seem to be focusing on the silver lining. Trump said Washington will suspend a tariff hike planned this week on $250 billion of Chinese goods, in return for China agreeing to buy as much as $50 billion of American farm goods.

Future hikes remain in place, though.

For real progress to be made, Morgan Stanley says it will need to see more progress on issues like enforcement and intellectual-property protections.

“Until such evidence is available, we must conclude that this pause is more ‘uncertain’ than ‘durable,’” the strategists wrote.

The chart

Kevin Muir, strategist at East West Investment Management, calls this illustration from Crescat Capital’s Tavi Costa his “new favourite chart.”

Outlook for rising prices is at a fresh 40-year low while core & median CPI are at decade highs.

Inflation tends to surprise investors at the top of the business cycle.

I mostly agree with the deflationary concerns, but is inflation the most underrated risk out there? pic.twitter.com/n8JDfycxOY

— Otavio (Tavi) Costa (@TaviCosta) October 13, 2019

“Tavi’s chart illustrates clearly the market is completely complacent about inflation,” Muir wrote on Twitter TWTR, +2.07%  . “Yeah, I know the deflationists will argue that it will resolve itself with a GFC-type-bust. Maybe, but true financial crises occur when something happens that NO-ONE-BELIEVES-CAN-HAPPEN.”

The buzz

While traders are understandably preoccupied with the trade deal, the third-quarter earnings season kicks off this week with the first reports expected Tuesday from big banks JPMorgan JPM, +1.69%  , Goldman Sachs GS, +2.41% and Citibank C, +2.16%  , along with fellow Dow components Johnson & Johnson JNJ, +1.76%   and UnitedHealth Group UNH, -0.74%  .

Away from the markets, Gordon Sondland, the U.S. ambassador caught up in the latest White House controversy, is expected to tell Congress his text message reassuring another envoy that there was no quid pro quo in their interactions with Ukraine was based solely on what President Trump told him. Stay tuned.

There’s lots of build-up heading into Tuesday night’s Democratic presidential debate, and with Elizabeth Warren challenging Joe Biden for the front-runner label, the backdrop is significantly different from prior discussions.

The stat

12.4% — That’s how much Brown University’s $4.2-billion endowment rallied in fiscal 2019. No other Ivy League school managed to beat the S&P 500’s SPX, +1.09% 10.4% over the same time period, Barron’s reported.

The economy

Banks are closed for Columbus Day, and there are no economic releases on the schedule. Notable reports coming up this week include retail sales figures and September housing starts, due out Wednesday and Thursday, respectively.

Random reads

Oversubscribed! The utter failure of cutting the cord.

Ken Fisher is paying the price for his inappropriate comments.

Alex Trebek gets real about his situation.

Should we soak the rich? Absolutely!

This dark video was shown to a bunch of Trump supporters at the president’s Miami resort last week, according to the New York Times.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

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2019-10-14 11:28:00Z
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Dow Jones Futures: Will China Trade Deal Caution Chill Stock Market Rally? Apple At Highs, Microsoft, Google, Nvidia Near Buys - Investor's Business Daily

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Dow Jones Futures: Will China Trade Deal Caution Chill Stock Market Rally? Apple At Highs, Microsoft, Google, Nvidia Near Buys  Investor's Business DailyView full coverage on Google News
https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-china-trade-deal-spur-stock-market-rally-apple-stock-microsoft-stock-google-stock-nvidia/

2019-10-14 10:36:42Z
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Wall Street’s Sky-High Expectations Are About to Collide With Reality - The New York Times

Wall Street’s eternally optimistic forecasters are expecting corporate profit growth to surge by the middle of next year — views that are about to collide with reality as hundreds of companies report financial results and update investors on their prospects.

American companies go through this ritual every three months: sharing financial statements and holding conference calls in which they sometimes offer their expectations for future quarters, what Wall Street calls “guidance.” For this quarter, it begins with reports from several big banks on Tuesday.

In between these reports, executives continue to issue guidance, trying to nudge expectations higher or lower with speeches at conferences or other events so official results don’t jolt investors.

Lately, they’ve been doing less of the in-between nudging, and that could make this round of earnings reports more important than usual.

“Companies are starting to do what they do when there is rampant uncertainty, which is just stop issuing guidance,” said Savita Subramanian, head of United States equity strategy at Bank of America Merrill Lynch. “Companies just basically go dark.”

During the three months that ended in September, companies in the S&P 500 offered the fewest updates — positive or negative — to investors since 2000, according to the bank’s analysts.

The “rampant uncertainty” that Ms. Subramanian referred to flows from many sources: signs that the economy and job growth are slowing, evidence that the manufacturing sector may already be in a recession, and the trade war’s toll on China, Japan and Germany.

Plus, politics and the 2020 presidential election were always going to be a distraction, but the impeachment investigation has made it harder to know where policy will go.

On Friday, President Trump said the United States and China had reached an interim deal to avert a planned tariff increase on Tuesday. But the agreement was spoken and would take several weeks to write, doing little to remove the uncertainty surrounding the economic battle between Beijing and Washington.

Regardless of the companies’ reasons, the relative silence since their last reports means stock investors may be in for a lot of bad news all at once.

Then there’s the matter of the habitually overenthusiastic Wall Street analysts who rate stocks and try to predict where they’re heading. Stock prices hinge on expectations — not on what just happened — and the predictions look increasingly divorced from reality.

Right now, the collective forecast is that profits at S&P 500 companies will jump more than 10 percent in 2020, a view that defies expectations for the economy to slow further.

“It doesn’t look likely,” said Ralph Davidson, chief global equity strategist at BTG Pactual, a Brazilian investment bank, of the profit forecast. “We expect guidance to be coming down.”

It’s not that double-digit profit growth is unprecedented. In 2018, earnings jumped 22 percent after a sharp cut in corporate taxes. But it’s becoming clear that last year’s surge was a one-time jolt.

The current year offers an example of what may happen if it dawns on analysts that they’re being too rosy.

Last October, they were forecasting that profits would grow about 10 percent in 2019. Those targets came down fast at the end of the year because of sudden worry that the trade war and rising interest rates might tip the economy into a recession.

As the year progressed, and companies reported results, the analysts cut the forecast down, again and again.

Now, they expect that profits will have grown just under 2 percent once the year is done. For the third quarter, which ended in September, analysts expect S&P 500 companies to report that their profits fell 3 percent.

Lower profits aren’t necessarily bad news for the economy. One reason corporate earnings have been pinched is that wages have been rising. That reflects the strong job market and helps support consumer spending, which is the bedrock for economic growth in the United States.

Nor does a slowdown in profits definitely mean stocks will fall. The key reason that stocks haven’t done worse as growth targets have been reduced is the Federal Reserve’s decision to cut interest rates.

The central bank made its first cut in July and, most recently, announced that it would expand its balance sheet, a process that pumps money into financial markets. All of this has been good for stocks.

But eventually investors will have to turn their attention back to the fundamental question of whether profits are going to keep growing, and how fast. And that could make the next few weeks rocky.

“I think we’re going to see a wave of negative guidance on next year’s earnings,” said Ms. Subramanian of Bank of America. “And that might not be great for the market.”

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https://www.nytimes.com/2019/10/14/business/stock-market-earnings-season.html

2019-10-14 07:00:00Z
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