JP Morgan's results smash analysts' expectations
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.
Evolution of the last five years:
- 2020: -8.85%
- 2019: 42.80%
- 2018: -8.72%
- 2017: 23.93%
- 2016: 30.68%
With the Invest.MT5 account from Admirals, you can invest in JP Morgan, Goldman Sachs and over 4,300 other shares! Click the banner below to register for an account today:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admirals shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst Roberto Rojas, Freelance Contributor (hereinafter "Author") based on personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admirals does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modelled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admirals for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.