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US Economy Steaming Up, As JP Morgan Earnings Soar in Q1

Posted Wednesday, April 14, 2021 by
Skerdian Meta • 2 min read

Will earnings meet forecasts?

The US economy has been recovering really well, especially in Q4 of last year and in Q1 of 2021. Manufacturing was the first sector to bounce back strongly and it is still continuing to expand, while services caught up later, although this sector is now expanding faster then ever, as long as records show back in 1983. Now, earnings are looking really strong for Q1 as well.

JP Morgan released the earnings report, showing a jump for Q1, while the rest of the major companies will release their reports today and tomorrow, which should be great as well. This shows that the US economy is outperforming and things will only gt better as we head toward summer.

JP Morgan Earnings Report

Q1 EPS $4.50 vs $3.01 estimate
Q1 revenue $33.12 billion vs $30.42 billion estimate
Q1 investment banking revenue $2.85 billion vs $2.46 billion estimate
Q1 equities sales & trading revenue $3.29 billion vs $2.32 billion estimate
Q1 FICC sales & trading revenue $5.76 billion vs $5.02 billion estimate

The firm’s trading desks had a great showing and soaring investment banking fees adds to the more upbeat results across the board. JPM CEO, Jamie Dimon, reflects on that in saying there is a “strong underlying performance across our businesses”.

On the economy, he adds that he believes “the economy could have a period of multi-year growth” and remarks that “consumer spending has returned to pre-pandemic levels”. That’s a good way to kick things off in earnings season with more financial institutions to report through to the end of the week.

Interestingly, JP Morgan shares are down 0.7% in pre-market with perhaps investors focusing more on the caution from the earnings statement. The firm said it doesn’t expect such circumstances to be recurring while adding that loan demand remains “challenged”. Goldman Sachs also released the report, which seems quite strong too.

Goldman Sachs reports strong earnings after JP Morgan

Q1 EPS $18.60 vs $10.07 estimate
Q1 revenue 17.70 billion vs $12.55 billion estimate
Q1 investment banking revenue $3.57 billion vs $2.68 billion estimate
Q1 equities sales & trading revenue $3.57 billion vs $2.68 billion estimate
Q1 FICC sales & trading revenue $3.89 billion vs $2.89 billion estimate

The only surprise seems to be how off the estimates are in gauging the performance for Wall Street firms so far. Goldman shares are up 1.5% now pre-market.

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