Shares of JPMorgan and Wells Fargo lower on earnings, Goldman Sachs higher


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Modest moves so far

Modest moves so far

Earnings season kicked off today and all three of JPMorgan, Wells Fargo and Goldman Sachs beat estimates.

JPM earned $4.50 per share compared to $3.13 but the difference was largely due to a $1.28 per share benefit from reserves set aside from the start of the pandemic that were released. Revenue was $33.1B vs $30.4B expected on strong trading revenue.

The company said it may buy back up to $7.4B  in the quarter but shares are down 1.4%, with the company cautioning on weak loan demand and higher expenses later in the year.

In terms of the economy, the company noted that in the recent round of stimulus cheques, Americans are saving and paying down debt rather than spending.

CEO Jamie Dimon did strike a positive tone in the release:

“With all of the stimulus spending, potential infrastructure spending,
continued quantitative easing, strong consumer and business balance
sheets and euphoria around the potential end of the pandemic, we believe
that the economy has the potential to have extremely robust, multi-year
growth,” Dimon said.

Goldman Sachs earned $18.6 per share compared to $10.06 expected, also on loan loss provisions being reversed. But revenue was also much higher at $17.70 compared to $12.54 expected. Shares are up 0.7% after rising as much as 1.7%.

The beat for Wells Fargo was smaller at $1.05 compared to $0.68 with revenue at $18.06B versus $17.52B. The company’s much smaller trading firm means it relies more on loans and company executives warned that low rates will be a drag on earnings. Shares of WFC are fractionally lower in the pre-market.

The big news in equities today will be the direct listing of Coinbase, which looks like it will open with a $100 billion market cap, making it one of the 85 most-valuable companies in the United States.

S&P 500 futures are fractionally lower with Nasdaq futures up 0.25%.

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