JP Morgan's results smash analysts' expectations

October 14, 2021 12:07

Yesterday's session was full of important news - with the Federal Reserve minutes and US inflation data being the highlights. The US CPI continues to show inflationary pressures as the year-on-year CPI came in at 5.4% versus the 5.3% expected by the market consensus. This figure also represents a 0.1% increase from the previous month.  

This rise can be explained by the increase in energy prices due to the crisis that is ravaging the entire world and has pushed the price of Brent crude oil to over 85 dollars per barrel at times. As we have commented in previous analyses, this crisis is causing temporary stoppages in some factories, paralysing production, which could have a very negative impact on the future prospects of the economy.  

Regarding the minutes of the US Federal Reserve, we could observe that they are ready to start tapering in November, with a reduction of its bond purchase programme by 15 billion dollars per month. This is in spite of the poor employment data that was released last Friday after the NFP showed a sharp slowdown in job creation, creating only 194,000 jobs in September compared to the 500,000 jobs expected.   

Therefore, once again, we can confirm what we have been talking about over the past few weeks regarding the slowdown of the world economy. We will have to be very attentive to the effects of a reduction in the current stimulus programmes in an environment of economic and inflationary slowdown due to the energy and raw materials crisis.  

With that in mind, we continue with the release of quarterly results, and it is the turn of the financial sector, as today we will know the data for the Bank of America, Citigroup, Wells Fargo and Morgan Stanley. However, yesterday the data for both JP Morgan and BlackRock was released.  

The famous investment and management company BlackRock presented positive quarterly results after achieving earnings per share of 10.95 dollars and revenues of 5.05 billion dollars compared to the 9.6 dollars per share and revenues of 4.82 billion dollars expected by the market consensus. These results led BlackRock shares to gain 3.78% during yesterday's session and the pre-opening of today's session has also been positive.  

JP Morgan also presented positive quarterly results, although unlike BlackRock, these did not prevent the company from continuing its correction during yesterday's session that began after setting record highs. Share price fell 2.64% during the session, due to uncertainty of how inflation growth and the start of tapering without a rise in interest rates will affect the company.  

JP Morgan achieved earnings per share of 3.74 dollars and revenues of 30.44 billion dollars compared to the expected 3 dollars per share and 29.86 billion dollars respectively, thus continuing its positive streak in results - as we can see in the following image:  



If we look at the daily chart, we can see that, after a strong uptrend that began with the lows of March 2020, during the last few months the price has been contained in a wide sideways range represented by the green and red bands that act as main resistance and support levels respectively. However, during the last few sessions the price has managed to momentarily break its resistance level to subsequently fall back into the sideways channel.  

It is important to observe the evolution of the price in the coming sessions, as a possible new failed attempt to overcome its current resistance level could trigger a new bearish impulse in search of its 200-session average in red and the lower band of this channel, which act as the main support levels. On the other hand, a break of this resistance level to the upside could trigger a new upward impulse in search of new all-time highs.  

Depicted: Admirals MetaTrader 5 – JP Morgan Daily Chart. Date Range: 24 January 2019 – 14 October 2021. Date Captured: 14 October 2021. Past performance is not a reliable indicator of future results. 


Evolution of the last five years: 

  • 2020: -8.85%
  • 2019: 42.80%
  • 2018: -8.72%
  • 2017: 23.93%
  • 2016: 30.68%

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Roberto Rojas
Roberto Rojas Financial Analyst, Admirals Spain

Roberto is a Financial Analyst with a European Financial Advisor certificate and a Double Degree in Business Administration and in Actuarial and Financial Sciences. In 2013 was graduated as an Expert Manager in Equities