Full access to Entrepreneur for $5

JPMorgan (JPM) Expects Trading to Continue 'Normalizing' in Q3

Trading business continues to normalize and JPMorgan (JPM), thus, expects markets revenues to fall year over year in the third quarter of 2021. On the...

This story originally appeared on Zacks

At the Barclays investors’ conference, JPMorgan JPM pointed out that trading business continued to “normalize” in the third quarter of 2021. Per Marianne Lake, the co-CEO of the company’s Consumer and Community Bank segment, both markets and investment banking (IB) results in the quarter are projected to be better than expected.

Lake noted that markets revenues are likely to decline 10% both year over year and sequentially as trading keeps normalizing from exceptionally high levels in 2020. She said, “We’re seeing particular strength in equities, a little less so in FICC.” Almost similar views were echoed by Citigroup’s C chief finance officer Mark Mason, who stated that trading revenues at the company will likely fall by a “low-to-mid teens” percentage from the prior-year period.

Likewise, trading businesses for Bank of America BAC, Morgan Stanley MS, and Goldman Sachs are likely to continue normalizing during the third quarter.

Now coming to IB business, Lake believes that IB fees will rise from the prior-year quarter on the back of “continued momentum” in global M&As. At the second-quarter earnings call, JPMorgan had expected the same to be “up year-on-year but down sequentially” following a robust quarterly performance. The company still projects the same view but “more up year-on-year and less down sequentially” than previously anticipated.

Further, JPMorgan’s consumer credit-card spending is up almost 20% from the 2019-level, though “the Delta variant has a little bit knocked consumer confidence, at least temporarily.”

Besides providing third-quarter guidance, JPMorgan reiterated its net interest income (NII) target of $52.5 billion for this year. The company, however, didn’t give any guidance for NII for 2022.  

Over the past year, shares of JPMorgan have jumped 57.5% compared with the industry’s rise of 59.1%.


- Zacks

Zacks Investment Research

Image Source: Zacks Investment Research

Currently, JPMorgan carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Time to Invest in Legal Marijuana

If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.

After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.

You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.

Today, Download Marijuana Moneymakers FREE >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report


Bank of America Corporation (BAC): Free Stock Analysis Report


JPMorgan Chase & Co. (JPM): Free Stock Analysis Report


Morgan Stanley (MS): Free Stock Analysis Report


Citigroup Inc. (C): Free Stock Analysis Report


To read this article on Zacks.com click here.


Zacks Investment Research