J.P. Morgan Chase shares fall for a fourth straight session on Friday as trading revenue shrinks, quarterly earnings beat on consumer banking strength

October 15, 2018 6:45 am

J.P. Morgan Chase & Co’s quarterly earnings, reported on Friday, topped Wall Street estimates, supported by higher net interest income and strong loan growth. However, J.P. Morgan’s quarterly trading revenue decreased.

The Wall Street bank has benefited from the US tax code reform and a sound macroeconomic environment.

J.P. Morgan Chase shares closed lower for a fourth consecutive trading session in New York on Friday. The stock went down 1.09% ($1.18) to $106.95, after touching an intraday low at $105.60, or a price level not seen since July 13th ($105.14).

Shares of J.P. Morgan Chase & Co have inched up 0.01% so far in 2018 compared with a 3.50% gain for the underlying index, S&P 500 (SPX).

In 2017, J.P. Morgan’s stock soared 23.93%, thus, it outperformed the S&P 500, which registered a 19.42% return.

The bank’s total revenue went up 5.2% year-on-year to $27.82 billion in the third quarter.

J.P. Morgan said its average core loans had increased 6% year-on-year during the latest quarter despite that higher interest rates curbed mortgage loan demand.

On the other hand, the bank’s trading revenue shrank 2.5% during the third quarter amid heightened trade friction between China and the United States as well as concerns over sluggish global economic growth. J.P. Morgan’s revenue from bond trading was reported to have dropped 10% year-on-year during the past quarter, while its revenue from equity trading surged 17%.

The bank’s net interest income went up 7% year-on-year to $14.1 billion during the latest quarter, after the Federal Reserve introduced four rate hikes since the third quarter of 2017.

At the same time, J.P. Morgan’s non-interest expenditures went up 7.2% year-on-year to $15.6 billion.

Meanwhile, the bank’s net income surged 24.5% year-on-year to $8.38 billion ($2.34 per share) during the third quarter, which outstripped the median analyst estimate pointing to earnings of $2.25 per share.

According to CNN Money, the 30 analysts, offering 12-month forecasts regarding J.P. Morgan Chase & Co’s stock price, have a median target of $124.50, with a high estimate of $140.00 and a low estimate of $85.00. The median estimate represents a 16.41% upside compared to the closing price of $106.95 on October 12th.

The same media also reported that 14 out of 32 surveyed investment analysts had rated J.P. Morgan Chase & Co’s stock as “Buy”, while other 14 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for J.P. Morgan Chase & Co (JPM) are presented as follows:

Central Pivot Point – $109.44
R1 – $113.29
R2 – $119.62
R3 – $123.47
R4 – $127.31

S1 – $103.11
S2 – $99.26
S3 – $92.93
S4 – $86.59

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