Pro Perspectives 7/14/23






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July 14, 2023

Remember, we head into Q2 earnings season with a market that has low expectations — looking for a 7% contraction in S&P 500 earnings.

That sets up for positive surprises. 

With that, let’s take a look at JP Morgan’s report this morning.

Keep in mind, this is the biggest bank in the country.  No entity is closer to the pulse of the consumer, business and government than JP Morgan.

They reported record revenue, and record net income (if we add back the net $1.5 billion they set aside as provisions for credit losses).

Jamie Dimon said, “almost all of our lines of business saw continued growth in the quarter.”

About the economy, Dimon said it continues to be resilient.  Consumer balance sheets remain healthy. Consumers are spending.  And job growth remains strong. 

How is the business customer faring?  Commercial banking revenues grew 14%, just over the past quarter.  

All of this is taking place into the headwind, and at the tail end, of a 500 basis point Fed tightening cycle.  

Bottom line:  The activity at the country’s biggest bank is quite healthy, and that is reflective of an economy that continues to float on a decades worth of money supply growth, that was force-fed over the span of just two years (in response to the pandemic).

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