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JPMorgan Chase CEO warns about US Government shutdown impasse

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JPMorgan Chase CEO Jamie Dimon called on US politicians to work together, indirectly hinting at the current paralysis of the federal government, which economists fear could affect growth and, in turn, the future performance of the government and banks. He stated that if the shutdown lasted the whole quarter US GDP growth could drop to nil. He quoted no research about his dire prediction.

JPMorgan Chase announced Tuesday a massive profit for 2018, fueled by the rise in interest rates in the United States – which allowed the biggest US bank by assets to limit the adverse effect of high volatility in markets. The company, however, disappointed the financial markets, which were hoping for better results, and this disappointment led to a decline of 1.6% of the stock on Wall Street.

Net profit stood at $7.06 billion in the last quarter, up 67% year-on-year, but earnings-per-share was $1.98 against $2.21 expected on average by analysts. The fourth quarter of 2017 was also reduced by a $2.4 billion charge related to the new US tax reform.

For the whole of 2018, JPMorgan has undoubtedly shown a “record” profit of $ 32.5 billion, but it is, however, less than hoped because adjusted earnings-per-share is only $9. Despite a 5% increase in loans and 3% in deposits, the activity also increased at a slower pace than feared. Quarterly revenue was $26.8 billion, up 4.07%, but below the $ 26.9 billion anticipated. Over the year, it was $109.03 billion, up 8.1% but lower than the $110.78 billion that analysts were betting on.

JPMorgan Chase attributes this underperformance to trading activities, where revenues fell by 11% in the fourth quarter as a result of investor fears over US-China trade tensions, uncertainties related to Brexit, and the implications for US Fed’s monetary policy.

According to Krishna Memani of Oppenheimer Funds and Mohammed El-Erian of Allianz, there is no recession ahead for US economy.

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Taha Farooqui

Taha specializes in copywriting & translating texts. He aims to cover cryptocurrencies & blockchain in both English and local dialects in the Middle Eastern regions. He has helped write, translate, and localize the material related to cryptocurrencies and blockchain.

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