JPMorgan surges 5% on Q3 earnings beat

• JPMorgan stock sails ahead on an impressive Q3 showing.
• GAAP EPS arrives 10% above Wall Street consensus. 
• Revenue benefits from investment banking, wealth management fees.
• Traders focus on setting new all-time high.

JPMorgan (JPM) stock surged over 5% on Friday after the nation’s largest bank released earnings that strongly beat consensus.

The Producer Price Index (PPI) for September was released before the market open, and it was not the signal the market desired. The annual inflation figures for both headline and core PPI arrived above consensus. In the case of annual core PPI, inflation rose above the August figure, even though the latter was revised upward.

The Dow Jones Industrial Average (DJIA), of which JPMorgan is a primary member, led other major US indices at the start of Friday trading. The DJIA is up 0.8% at the time of writing, while the NASDAQ rises 0.3%.

JPMorgan stock news

JPMorgan, managed by CEO Jamie Dimon, earned $4.37 in GAAP income per share, which was more than 10% above consensus from Wall Street. The figure was helped by higher fees from investment banking and wealth management but was hurt by higher credit provisions due to rising write-offs in its credit card business. Also, $6 billion in share buybacks (about 1% of outstanding) during the quarter pushed the figure higher.

Revenue in the third quarter rose 7% from a year ago to $42.65 billion, beating consensus by nearly $1.3 billion.

Deposits and total loans rose meagerly from a year ago, but investment banking fees rose 31% YoY, while asset management fees gained 15% in that period. Car loans rose 11% YoY in Q3. Fixed income revenue remained flat from a year prior, while equity market revenue rose 27%.

Looking ahead, CFO Jeremy Barnum said that Q3’s $23.5 billion in net interest income would likely drop to $22.9 billion in Q4 due to the yield curve.

Based on the declining yield curve, which is changing due to the Federal Reserve cutting interest rates, Barnum predicted that the bank would see a pullback in net interest income until it levels off in the middle of 2025. 

When asked about Wall Street’s 2025 consensus of $87 billion for net interest income, Barnum said it was “in the ballpark” but was toward the top end of what is possible.

JPMorgan stock forecast

JPMorgan stock is closing in on a new all-time high. The existing one came on August 30 at $225.48, and JPM stock was less than a Dollar from reaching it earlier in the session.

The Fibonacci extensions give traders a key as to where they can aim for. Right now, JPM stock trades near the 161.8% Fibo at $224.31. The 261.8% Fibo sits at $236.65, and the 361.8% sits at $248.99.

The 100-day Simple Moving Average (SMA) has worked as decent support on many occasions over the past two years. On Friday, it trends a little above $207.