To The Moon

On Fri, 13 Oct 2023, $JPMorgan Chase(JPM)$ - US largest bank by assets, reported its Q3 2023 earnings. Total Revenue was $39.8 Billion, up +22% from the same quarter last year. Revenue climbed +21% to $40.69 Billion,helped by stronger-than-expected net interest income. Bank posted a Net Income of $13.28 Billion, This is up +22% YoY. EPS works out to be about $4.21 per share, beating analysts' expectations of $3.98 per share. JP Morgan’s stellar results were driven by strong performances in following bank’s divisions: (see below) Consumer & Community Banking (CCB). Businesses rose by +36% to $5.9 Billion, fueled by higher net interest income and the acquisition of First Republic Bank. (see below) Commercial Banking (CB). This division contributed > +100% or $1.9 Billion to bank’s growth. Asset & Wealth management (AWM). It rose by +16% to $1.4 Billion. Corporate & Investment (CIB). This is the only non-performing line of business. Businesses fell by -12% to $1.4 Billion. due to decline in [a] trading and [b] advisory revenue. Elevated interest rates have affected smaller banks in 2023. However, JPMorgan continued to benefit from the rate environment. On Fri, 13 Oct 2023 — the bank said it expects net interest income will total $88.5 Billion in 2023. This is up from the $87 Billion forecasted in July 2023, a 4th time the bank has increased its guidance. Headwinds & Thunderstorms Facing JP Morgan (1) Less Money For Investment. In my 23 Aug 2023 post, I have touched on “additional” capital required from US bigger banks (click here! to read!). It has been enforced since 01 Oct 2023. During Q3 2023 earnings press conference, CFO Jeremy Barnum: Criticized US regulators’ push to increase capital levels at banks with at least $100 Billion in assets. Unless modified, the plan would boost JPMorgan’s required capital by 25%, or $50 billion. according to the bank. Meaning less working capital for the bank to generate income. (2) Uncertain Times. In Q3 2023 earnings press conference, CEO Jamie Dimon highlighted the followings: JP Morgan’s [a] “over-earning” on net interest income and [b] “below normal” credit costs that will both normalize over time. Interest rate “may” climb further given the following dire combinations, [1] healthy consumer confidence, [2] healthy PPI, [3] households are spending down cash balances, [4] persistent tight labour market & [5] “extremely high government debt levels”. 21st century wars — [i] Russia/Ukraine and [ii] latest Israel/Harmas will have far-reaching impacts on [a] Energy, [b] Food markets, [c] Global trade, & [d] Geopolitical relationships. Shares of JPMorgan have climbed +9.53% this year (YTD performance). Outperforming the -19% decline of the KBW Bank Index (as of Thu, 12 Oct 2023). What I think: On interest rate, I believed the Fed would only raise it in December if November’s data rise instead of continuing to fall. On the 2 wars in Europe and Middle East, the former may still persists. Hope the latter could be over in a jiffy. JP Morgan’s net interest income is a one-off that will dissipate when the Fed starts to reduce the Fed rate; likely in 2024. After all that has been shared, is it time to invest in US bank stocks? Do you think it is time to get back into JP Morgan? Do you think other US banks will report similar stellar earnings like JP Morgan? Please give a “LIKe”, “Share” and “Re-post” ok. Thanks. Rating is very important (to me). Do consider “Follow me” and get firsthand read of my daily new post/s ok. Thanks. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents