JPMorgan Chase reported Monday that it earned more money than it earned last year, and its chief executive then spent the morning explaining why nobody should be happy about it, and the stock rose anyway, which is the most honest sentence in this entire edition.
Profit was up about six percent. Revenue was up. Earnings per share came in slightly under what Wall Street had demanded, and Jamie Dimon warned that “large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface” while also noting, in the same statement, that the economy is being powered by strong business investment and consumers who have apparently stopped saving. Both halves of that sentence are true. Bankers have always been paid to say both halves at once; it is the actual product, and on Monday the product performed.
The market’s read, per the traders who text it to you: the miss was small, the warning was expected, and the stock’s rise means investors believe the warning is for other people. JPMorgan kicked off the earnings season Tuesday alongside Goldman, Wells, and Citigroup, a tradition in which four banks report before breakfast and everyone agrees afterward that the American consumer is “resilient,” a word bankers use for a person who keeps buying things while the interest on his things doubles.
“What I hear from clients is not panic,” said Marisol Vega, a portfolio manager in Charlotte who has been taking these earnings calls since 2009. “It’s people asking me, very calmly, what the word ‘sticky’ means this quarter. It used to mean one thing. Now they want the quarterly definition. I tell them it means the same thing, they just get tired of hearing it, and the tiredness is the story.”
Gasoline is near $4 a gallon. The Federal Reserve cut rates last week while admitting it hates itself for doing it. Existing home sales data lands Tuesday into a housing market that has stopped pretending to be a housing market and now functions as a subscription service. And still: the banks made more money, the consumer kept spending, and the warning about the consumer kept spending was delivered by the bank that took the consumer’s deposits.
The fiscal deficits, for the record, are large. The inflation, for the record, is sticky. The asset prices, for the record, are elevated. All three facts were stated by the man whose bank had the best year of its history, from a building with a view of the harbor, and the harbor, for the record, is fine.