Jamie Dimon has seen the future – and probably wishes he hadn't.
To be fair, the JPMorgan Chase JPM CEO did get some good news recently, when the financial services giant posted better-than-expected third-quarter earnings.
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The company reported earnings of $13.15 billion, or $4.33 per share, up 28.9% from the same period last year and firmly ahead of the Street consensus forecast of $3.36 per share.
Managed revenues, JPMorgan said, rose 21% to $40.69 billion, just ahead of analysts' estimates of a $39.57 billion tally, while net interest income rose 30% to a record $22.9 billion a result of the higher interest rate environment, offsetting a slump in global dealmaking fees amid a dearth of new listings and takeovers so far this year.
'Facing so many uncertainties'
Still, Dimon warned that "persistently tight labor markets as well as extremely high government debt levels with the largest peacetime fiscal deficits ever are increasing the risks that inflation remains elevated and that interest rates rise further from here.”
Furthermore, he added that the war in Ukraine compounded by the recent attack on Israel may have “far-reaching impacts on energy and food markets, global trade, and geopolitical relationships.”
“This may be the most dangerous time the world has seen in decades,” he said.
Dimon told analysts that just "because markets do well is not a reason ever to say they're going to continue to do well."
"If you don't believe me, remember 1987, 1990, 1994, the year 2000, the year 2009, and people don't predict those inflection points," he said, according to a transcript of the call. "My caution is that we are facing so many uncertainties out there.
Dimon said he was not feeling overly optimistic about the bank's immediate future.
The top executive acknowledged his bank’s “over-earning” on net interest income, CNBC noted, a benefit that will vanish eventually.
Meanwhile, Wells Fargo's (WFC) -) third-quarter earnings echoed JPMorgan's, with a boost in net interest income supporting a better-than-expected bottom line.
Bad times are no surprise
CEO Charlie Scharf said that “while the economy has continued to be resilient, we are seeing the impact of the slowing economy with loan balances declining and charge-offs continuing to deteriorate modestly."
"Our base case remains a continued slowing of the economy, but we remain prepared for a wide range of scenarios, given there is still significant uncertainty ahead," he told analysts during the company's earnings call.
In addition, the University of Michigan's benchmark consumer sentiment survey for October came in below market forecasts amid the highest reading for inflation expectations since May.
“Nearly all demographic groups posted setbacks in sentiment, reflecting the continued weight of high prices,” Joanne Hsu, the survey director, said in a statement.
Looking ahead, Dimon told analysts that "we know there are going to be bad times."
"That's not a surprise as there are going to be bad times," he said. "I don't know how they're coming and where they're coming from, but we keep on serving clients and doing good for clients, you can build a good business kind of separate from what it does to your returns."
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