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JPMorgan kicks off US earnings season

JPMorgan Chase & Co. is set to announce its latest quarterly results before US markets open on Friday, January 13th.

This Wall Street banking giant is widely deemed as the curtain raiser for the quarterly US earnings season. Earnings season comes around every 3 months, and is when US public-listed companies reveal just how well it performed financially during the previous quarter.

Here’s what markets are forecasting for some of JPMorgan’s key figures:

  • Revenue = US$ 34.15 billion
  • Net income = US$ 9.18 billion
  • EPS = US$ 3.12


Beyond such figures, perhaps equally important is what JPMorgan thinks about the US economic outlook.

After all, this is the biggest US bank in terms of assets, with a balance sheet of more than US$3.3 trillion.

Hence, JPMorgan’s sheer heft implies that this banking titan is well placed to get a pulse on the world’s largest economy.


And with that in mind, look out for “loan loss provisions”.

Loan loss provisions are money the bank sets aside in case customers can’t pay back loans.

JPMorgan may set aside more funds (a higher provision for loan losses) if it believes that a US recession is becoming likelier.

After all, an economic downturn is often accompanied by higher unemployment and more of their customers losing their ability to honour debt obligations. Hence, JPMorgan would want to pre-empt this future scenario by holding on to more funds now, just in case.

On the flip side, if JPMorgan thinks that the risk of a US recession is not as bad as feared, then it could signal such an outlook by declaring lower provisions for loan losses.

Overall, markets are forecasting that JPMorgan will set aside the most in loan loss provisions for a single quarter since the onset of the 2020 Covid-19 pandemic.


Also look out for details about JPMorgan’s share buyback

A share buyback simply means when the company buys back its own shares from the markets.

This corporate move is widely seen to help boost the stock prices, because it may entice more investors to buy these shares on the hope that prices won’t fall too much thanks to the support from the bank’s buybacks.

Existing and prospective shareholders would also take comfort knowing that they can sell these JPMorgan shares in confidence, knowing there’s a willing buyer (JPMorgan) who’s committed to buy back from the open market.

Over the course of 2021, JPMorgan had averaged US2.2 billion in buybacks per quarter.

However, these buybacks were then suspended in mid-2022, given the tougher market conditions and economic climate.

JPMorgan CEO Jamie Dimon had indicated that these buybacks may resume early in 2023.

So look out for any announcement on that front, as the resumption of JPMorgan’s share buyback programme may translate into a knee-jerk pop in its share prices, provided broader market sentiment allows for such stock gains to occur.


JPMorgan’s shares looking to earnings to help boost stock recovery

This stock has seen a remarkable rebound since falling precariously close towards the psychologically-important $100 mark back in October.

Since then, this stock has broken out to the upside of its downtrend that was in place for much of last year, while also having enjoyed critical support at its 50-day simple moving average (SMA) recently.

Last month’s technical event of a “golden cross” may have also helped propel this stock to its highest levels since March, with this $140 region also marking the cycle low from a year ago, back in January 2022.

JPMorgan stocks could move 3.5% after earnings

Markets are forecasting that JPMorgan’s stocks could move by 3.5% on Friday, either upwards or downwards, once the US stock market opens shortly after the bank’s earnings are released.

  • If so, a 3.5% move to the upside from current levels might see this stock testing immediate resistance around $144, which is also the cycle high from March 2022.
  • However, a 3.5% move to the downside from current levels may invite bears to retest the 50-day SMA for immediate support once more.



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