JPM Investor Day Conference: Q2 IB Fees to Dip, 2025 NII May Rise by $1B

At the Investor Day conference yesterday, JPMorgan JPM CEO Jamie Dimon noted that the full impact of Trump’s tariffs is yet to be fully understood, and even at the current levels (a baseline reciprocal tariff of 10% remains in place across the board), these remain steep. This is likely to hurt the economy, with a risk of higher inflation.On similar lines, Troy Rohrbaugh, co-CEO of the Commercial & Investment Bank (CIB) segment, noted that economic uncertainty is expected to hurt JPM’s investment banking (IB) business this quarter, as deal-making activities have largely stalled. IB fees are expected to be down in the mid-teens range on a year-over-year basis. In the second quarter of 2024, IB fees in the CIB segment were $2.46 billion. On the other hand, JPMorgan’s markets revenues are projected to grow in the mid-to-high single-digits range for the second quarter of 2025. This is likely to be driven by a significant rise in market volatility and higher client activity.Further, Chief Financial Officer Jeremy Barnum said, “The evolving tariff environment, combined with the preexisting geopolitical tensions, adds significant uncertainty into the economic outlook.” Despite this, he believes the company’s net interest income (NII) could increase by $1 billion this year, but stopped short of making the change in the NII outlook of $94.5 billion (up almost 2% year over year) as it's too early to comprehend the actual impact of various macroeconomic headwinds.Like JPM, its close peers – Bank of America BAC and Wells Fargo WFC – expect NII to grow this year. Bank of America anticipates NII to jump 6-7% year over year, while Wells Fargo expects the metric to be 1-3% higher than the 2024 level.Other Key Takeaways from JPMorgan’s ConferenceJPMorgan reiterated its 2025 non-interest expense outlook of $95 billion. It emphasized the importance of artificial intelligence (AI) in boosting efficiency and noted that its technology budget is $18 billion this year, up roughly 6% from last year. Marianne Lake, CEO of the Consumer and Community Banking segment, said, “The operations team (in consumer banking) is at the tip of the spear on using and leveraging new AI tools and capabilities. And based upon what we know today, we expect headcount will trend down by about 10% over the next five years or so.”Additionally, despite several near-term headwinds, JPMorgan affirmed its card net charge-off (NCO) rate at approximately 3.6%. Further, the company guided the 2026 card NCO rate to be between 3.6% and 3.9%. Further, Dimon stated that JPM will make Bitcoin ownership available to its clients, while having no plans to hold it in custody. Nonetheless, he noted that he’s still “not a fan” of Bitcoin, mainly because of its use for illegal activities.JPMorgan, with its massive liquidity, is open to expansion through acquisitions but remains "appropriately cautious" because of the challenges of integrating businesses. Since acquiring the assets of failed First Republic Bank in May 2023, the company has been relatively quiet on buyouts.JPM’s Zacks Rank & Price PerformanceOver the past year, shares of JPMorgan have rallied 32.8%, outperforming the industry’s growth of 27%. Image Source: Zacks Investment ResearchAt present, JPM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Bank of America Corporation (BAC): Free Stock Analysis Report Wells Fargo & Company (WFC): Free Stock Analysis Report JPMorgan Chase & Co. (JPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks