JPMorgan Shares Tumble After COO Throws Cold Water On Analyst Outlook

Did one comment just send JPMorgan Chase & Co. JPM shares to fall by 7.5%?

It appears so. JPMorgan Chief Operating Officer Daniel Pinto tempered analyst forecasts on next year’s expenses and net interest income (NII) at an industry event Tuesday.

The current NII consensus of $89.5 billion is “not very reasonable” in the light of interest-rate forecasts, he said according to Bloomberg. NII “will be lower,” he added.

As a result, the stock took its biggest tumble since June 2020.

But Pinto wasn’t the only bank executive who sounded pessimistic this week.

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Goldman Sach Group Inc. GS CEO David Solomon said Monday the firm’s trading revenue is on track to drop 10% in the third quarter. At last check Tuesday, the firm’s stock is down more than 4.3%.

Ally Financial Inc. ALLY is also down over 17.6% at last check.

The firm confirmed that auto delinquencies and net charge-offs were higher than forecast, sending the stock to its biggest decline since March 2020 while taking consumer lenders Capital One Financial Corp. and Synchrony Financial down with it.

The 24-firm KBW Bank Index fell 3.5%, even though the Federal Reserve said that it would cut higher proposed capital requirements for the biggest firms in half after industry pushback.

JPMorgan reported NII that missed analysts' estimates for the second quarter as well as higher-than-expected costs.

Pinto also said Tuesday that expectations for 2025 costs were too balmy, and that third-quarter investment-banking fees could rise 15% while markets revenue increases just 2% to come in below analyst forecasts.

Price Action: JPMorgan fell 5.25% to $205.40 into Tuesday’s late-afternoon trading.

• IShares U.S. Financial Services ETF IYG slipped 1.21%
• Financial Select Sector SPDR Fund XLF fell 1.06%
• iShares U.S. Financials ETF IYF slid 1.13%

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