Charted: Banks warn on expectations
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JPMorgan Chase sounded a warning today that some earnings expectations need to be tempered in the coming world of lower interest rates.
Why it matters: The comment sent the firm's shares plunging, and it was just one of several warning flags sent up by America's banks in recent days amid an inflection point in macro conditions.
Driving the news: JPMorgan president Daniel Pinto said at a financial conference that the current $90 billion estimate for net interest income — the amount banks earn from lending vs. what they pay to depositors — "is not very reasonable" for 2025.
- Ally Financial warned at the same conference that its "credit challenges have intensified," with auto loan delinquencies increasing as borrowers struggle with high costs.
- And Goldman Sachs CEO David Solomon yesterday cited a "more challenging macro environment" while warning that trading revenue is likely to slip 10% in the third quarter.
The big picture: Bank stocks broadly have enjoyed a strong year. Even with today's 3% drop, the KBW Nasdaq Bank Index, which tracks the performance of publicly traded U.S. banks, is up 13% year to date.
