Finance

JPMorgan Chase shares drop 7% after bank tempers guidance on interest income and expenses

Published

6 months ago

September 10, 2024

Daniel Pinto, president and chief operating officer of JPMorgan Chase, speaks during the Semafor 2024 World Economy Summit in Washington, DC, on April 18, 2024.

Saul Loeb | AFP | Getty Images

JPMorgan Chase shares fell 7% Tuesday after the bank’s president told analysts that expectations for net interest income and expenses in 2025 were too optimistic.

While the bank expects to be in the “ballpark” of the 2024 target for NII of about $91.5 billion, the current estimate for next year of about $90 billion “is not very reasonable” because the Federal Reserve will cut interest rates, JPMorgan president Daniel Pinto said at a financial conference.

“I think that that number will be lower,” Pinto said. He declined to give a specific figure.

The stock move was the New York-based bank’s worst drop since June 2020, according to FactSet.

JPMorgan, the biggest U.S. bank by assets, has been a winner among lenders in recent years, benefiting from better-than-expected growth in NII as the bank gathered more deposits and made more loans than expected. But skittish investors are now concerned about the outlook for a bellwether banking stock, along with broader concerns about slowing U.S. economic growth.

NII, one of the main ways banks make money, is the difference in the cost of a bank’s deposits and what it earns by lending money or investing it in securities. When interest rates decline, new loans made by the bank and new bonds it purchases will yield less.

Falling rates can help banks in the sense that customers will slow the rotation out of checking accounts and into higher-yielding instruments like CDs or money market funds. But they also make new assets lower yielding, which complicates the picture.

“Clearly, as rates go lower, you have less pressure on repricing of deposits,” Pinto said. “But as you know, we are quite asset sensitive.”

When it comes to expenses, the analyst estimate for next year of roughly $94 billion “is also a bit too optimistic” because of lingering inflation and new investments the firm is making, Pinto said.

“There are a bunch of components that tell us that probably the number on expenses will be a bit higher than what is expected at the moment,” Pinto said.

When it comes to trading, JPMorgan said it expects third-quarter revenue to be flat to up about 2% from a year ago, while investment banking fees are headed for a 15% jump.

The trading slowdown tracks with Goldman Sachs, which said Monday that trading revenue for the quarter was headed for a 10% drop because of a tough year-over-year comparison and difficult trading conditions in August.

Finance

Stocks making the biggest moves after hours: HIMS, TEM, FANG

Published

5 hours ago

February 24, 2025

Business Finance News

Finance

Anthropic closes in on $3.5 billion funding round

Published

6 hours ago

February 24, 2025

Business Finance News

Dario Amodei, Anthropic CEO, speaking on CNBC’s Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 21st, 2025.

Gerry Miller | CNBC

Anthropic is in talks to raise a $3.5 billion funding round, significantly more than the amount previously expected, CNBC has confirmed.

The round would roughly triple the artificial intelligence startup’s valuation to $61.5 billion, according to two sources familiar with the deal, who asked not to be named because the details aren’t public. Lightspeed Ventures is leading the funding, with participation from General Catalyst and others, the sources said.

The financing, which was first reported by the Wall Street Journal, signals continued investor demand for top-tier AI companies, even in the face of potential disruption from China’s DeepSeek. Anthropic is backed by Amazon and Google, and had initially set out to raise $2 billion, according to a source.

Anthropic declined to comment.

The company’s last private market valuation was $18 billion. Amazon has poured $8 billion into the startup.

Anthropic was founded by early OpenAI employees and is the creator of the popular chatbot Claude. Earlier Monday, Anthropic released what it says is it’s “most intelligent AI model yet. Its so-called hybrid model combines an ability to reason — or stopping to think about complex answers — with a traditional model that spits out answers in real time.

WATCH: Anthropic unveils newest AI model

Amazon-backed Anthropic unveils newest AI-model

Finance

Jamie Dimon calls U.S. government ‘inefficient,’ touts Elon Musk’s DOGE effort

Published

8 hours ago

February 24, 2025

Business Finance News

Watch CNBC's full interview with JPMorgan CEO Jamie Dimon

JPMorgan Chase CEO Jamie Dimon on Monday said the U.S. government is inefficient and in need of work as the Trump administration terminates thousands of federal employees and works to dismantle agencies including the Consumer Financial Protection Bureau.

Dimon was asked by CNBC’s Leslie Picker whether he supported efforts by Elon Musk’s Department of Government Efficiency. He declined to give what he called a “binary” response, but made comments that supported the overall effort.

“The government is inefficient, not very competent, and needs a lot of work,” Dimon told Picker. “It’s not just waste and fraud, its outcomes.”

The Trump administration’s effort to rein in spending and scrutinize federal agencies “needs to be done,” Dimon added.

“Why are we spending the money on these things? Are we getting what we deserve? What should we change?” Dimon said. “It’s not just about the deficit, its about building the right policies and procedures and the government we deserve.”

Dimon said if DOGE overreaches with its cost-cutting efforts or engages in activity that’s not legal, “the courts will stop it.”

“I’m hoping it’s quite successful,” he said.

In the wide-ranging interview, Dimon also addressed his company’s push to have most workers in office five days a week, as well as his views on the Ukraine conflict, tariffs and the U.S. consumer.