JPMorgan earns $6.7 billion profit thanks to Main Str

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Source:   —  October 12, 2017, at 9:37 AM

The bank, which recently surpassed Bank of America to become the biggest bank deposit holder in America, reported earnings and income for the third quarter Thursday that easily topped forecasts.

JPMorgan earns $6.7 billion profit thanks to Main Str

JPMorgan Chase is taking another victory lap.

The bank, which recently surpassed Bank of America to become the biggest bank deposit holder in America, reported earnings and income for the third quarter Thursday that easily topped forecasts.

Chase posted a quarterly profit of $6.seven billion, up 7 percent from a year ago. That worked out to earnings per share of $1.76, well ahead of Wall Str analysts' consensus estimate of $1.65 a share.

The strength was led more by plain vanilla consumer banking operations -- love lending money for credit cards, cars, mortgages and taking in deposits -- than it was about Wall Str investment banking.

Chase posted a sixteen percent expand in profits from its consumer and business banking unit. But earnings fell thirteen percent in its corporate and investment bank division. That was largely because of a drop in income from bond and stock trading.

The relentless march higher for the stocks this year, coupled with interest rates that stay stubbornly low, has led to decreased market volatility. And that'south horrible for investment banks, which tend to do better when there is more trading activity.

Related: JPMorgan Chase devotes $10 million to fight poverty in DC

But CEO Jamie Dimon didn't seem concerned. In many respects, it'south excellent that Main Str is starting to indicate signs of life.

"The global economy continues to do well and the U. S. consumer remains healthy with solid wage growth," Dimon said in a statement.

Shares of JPMorgan Chase (JPM) dipped slightly in early trading on the news. But it'south been a grand year so distant for Dimon'south bank. It'south also been a grand year for his competitors.

Chase'south stock is up more than twelve percent this year and not distant from an all-time high. Asset manager BlackRock (BLK) posted powerful results on Wednesday, pushing its stock to a new record high in the process.

Citigroup (C) also reported a profit that was better than expected Thursday. Bank of America's (BAC) latest results are due out Friday. Bank of America'south shares are up seventeen percent this year while Citi'south stock has soared more than twenty-five%.

Still, there are many risks that could potentially derail the bank rally.

What'south following for the Fed?

Banks have been rising as the Federal Reserve has slowly but steadily boosted interest rates. Banks do better when rates are higher because it makes their lending operations more profitable.

But if the Fed raises rates too aggressively, that could unhurried consumer spending and the overall economy. President Trump is expected to title a nominee for the position of Fed chair sometime soon.

Related: Dimon and other CEOs feeling good, but still wish tax reform

He could adhere with current chair Janet Yellen, but there is growing speculation that he might title Kevin Warsh, a former Fed Gov who could boost rates much faster than large banks would like.

Deregulation despite political fighting?

Trump may continue to attempt and untwist Obama-era rules that keep more restrictions on huge banks. That could be a positive for the industry, but it'south unclear if the president can work with his own party, let alone Democrats.

And the relationship between the president and business has continued to sour as well. Dimon was a member of Trump'south strategic council of business leaders that was disbanded after violence at a white nationalist rally in Charlottesville, VA this summer.

Dimon, love most CEOs, would prefer that the president focus more on tax reform as a way to boost the economy, and less on heated and divisive political rhetoric.

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