When JPMorgan Chase (JPM) reports first quarter earnings Friday morning, investors will be most focused on the future as they listen for any clues about how President Trump’s tariffs may scramble the outlook for the bank and its customers.
The stock of the largest US bank has been dragged lower in the last week by the many economic uncertainties surrounding the president’s trade war, including a 145% tariff on China and separate duties on other countries and industries. JPMorgan’s stock fell another 3% Thursday.
At close: April 10 at 4:00:02 PM EDT
The voice investors most want to hear Friday belongs to JPMorgan CEO Jamie Dimon, who earlier this week said he expects tariffs to produce higher inflation and slower economic growth and told Fox Business Network’s Maria Bartiromo that a recession is now a “likely outcome.”
But that was also before Trump decided to pause for 90 days the implementation of so-called reciprocal tariffs for many countries, stoking hope on Wall Street the steep duties could be negotiated lower.
Some on Wall Street gave Dimon credit for swaying the president, since Trump did mention that he had seen and liked Dimon’s Wednesday morning appearance on Fox Business Network’s “Mornings with Maria.” The interview had been scheduled before the initial tariff announcements, according to a person close to Dimon.
“He was very good,” Trump said outside the White House Wednesday after announcing his 90-day pause.
Dimon this week discussed other possible outcomes of the unfolding chaos, including stress among bank borrowers.
“If you have rates going up a little bit, and inflation is sticky, and credit spreads are gapping out, which they’re going to, I think you’ll see more credit problems than people have seen in a long time,” he added.
JPMorgan isn’t the only big bank reporting results Friday. Wells Fargo (WFC) and Morgan Stanley (MS) are also releasing earnings this morning, to be followed next week by Goldman Sachs (GS) on Monday and Bank of America (BAC) and Citigroup (C) on Tuesday.
The signs of stress on Wall Street have certainly been mounting in the last week. IPOs and mergers were put on the shelf. Leverage loan deals were shoved to the sidelines. Bond sales were paused.
“We’ve lost a couple bond deals already,” Dimon said in his Fox Business interview.
Wall Street is also reckoning with other forms of chaos that still have the potential to roil the financial system.
The FT reported this week that hedge funds were receiving the steepest margin calls since the 2020 COVID-19 crisis, meaning Wall Street banks were asking them to come up with cash to cover losses. That may have triggered more fire sales of losing positions.
