JPMorgan, Citi, and Wells Fargo Post Q2 Earnings Beat

Alison Williams, Senior Analyst of Global Investment Banks at Bloomberg Intelligence, breaks down earnings from JPMorgan, Citi, and Wells Fargo out this morning.

JPMorgan Chase & Co.’s investment bankers eked out a surprise gain in the second quarter, signaling what may be the start of a dealmaking rebound after widespread hesitation tied to US tariff policies.

Investment-banking fees climbed 7%, the bank said in a statement Tuesday, while analysts were expecting a 14% decline. The firm’s stock traders notched their best second quarter ever, and fixed-income trading trounced expectations.

Dealmaking “activity started slow but gained momentum as market sentiment improved,” Chief Executive Officer Jamie Dimon said in the statement. “The finalization of tax reform and potential deregulation are positive for the economic outlook, however, significant risks persist – including from tariffs and trade uncertainty, worsening geopolitical conditions, high fiscal deficits and elevated asset prices.”

The better-than-expected investment-banking results give a first glimpse into how the Trump administration’s whipsaws on tariffs affected results, as well as new insights into the health of US consumers and businesses. Wells Fargo & Co. and Citigroup Inc. also report Tuesday, with Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley due on Wednesday.

Big banks’ merger-advisory businesses have been a source of concern for many investors, as an expected rebound this year was stymied by conflicting tariff announcements that kept many CEOs on the sidelines, waiting for more clarity. Doug Petno, co-head of JPMorgan’s commercial and investment bank, told investors in May that a lot of clients “tapped the brake” during the volatility.

Shares of JPMorgan, up 20% this year, slipped 0.4% at 9:49 a.m. in New York. Some analysts had predicted the stock might stagnate, even after positive earnings news, because the company’s valuation was already at a high level.

Within investment banking, debt underwriting rose 12% and fees from advising on mergers and acquisitions climbed 8%, both bucking analyst expectations for a decline from a year ago. Equity-underwriting revenue fell 6%, while analysts expected a 29% drop.

On the trading side, the fixed-income business pulled in $5.69 billion, well ahead of the $5.22 billion average estimate. Equity trading came in at $3.25 billion — a second-quarter record following an all-time high set in the first quarter.

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