JPMorgan Chase shares drop nearly 7% after bank tempers guidance on net interest income

Published On Sep 10, 2024, 11:58 AM

JPMorgan Chase shares fell 5% on September 10, 2024, after the bank's president indicated that expectations for 2025 net interest income (NII) and expenses may be overly optimistic. The president, Daniel Pinto, noted that the estimated NII of approximately $90 billion is unrealistic due to anticipated Federal Reserve interest rate cuts, as well as an expense estimate of about $94 billion, which Pinto associates with inflation and new investments. These remarks caused JPMorgan's stock to drop significantly, marking the steepest decline since June 2020. Investors are now wary of the broader implications for the banking sector amid slowing U.S. economic growth.

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Stock Forecasts

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Negative

JPMorgan Chase is facing pressure from rising expectations about their net interest income amidst a backdrop of declining interest rates and higher expenses due to inflation. The lack of confidence in their predictions by management suggests that the company may struggle to meet these expectations, leading to continued negative sentiment in the short term. Given the headwinds mentioned, the stock may continue to face downward pressure for some time, especially as the market reacts to the more pessimistic outlook.

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