Oct 13 (Reuters) – JPMorgan Chase (JPM.N), opens new tab fell short of quarterly profit estimates for the first time in nearly three years as market volatility and an uncertain economic outlook dampened dealmaking and reduced bond market trading activity in recent months.
Wall Street’s dealmakers had a cracking start to the year, highlighted by the historic listing of Elon Musk’s SpaceX. But the IPO market has lost steam in recent weeks, threatening what could have been a banner year for the investment banking business.
JPMorgan reported an 8% decline in third-quarter investment banking fees versus the second quarter even as it recorded a 14% rise compared with a year earlier.
Revenue at its markets division climbed 15% in the third quarter from the prior year. Equity markets surged 49%, as investors rejigged their portfolios thanks to uncertainty over global interest rates and surging energy prices. Fixed-income trading revenue declined 4%.
“There is a slight miss on Street consensus for fixed income trading, equity underwriting and also debt underwriting,” Chris Marinac, director of research at Janney Montgomery Scott, said.
Investment banking and trading grew at the lower end of the bank’s own estimates too. In September, JPMorgan Co-President Doug Petno had said investment banking fees and markets revenue were expected to be up in the “mid-to-high teens” percentage in the third quarter.
The bank reported a profit of $5.57 per share, for the three months ended September 30. Analysts on average had expected $5.85 per share, according to estimates compiled by LSEG. It was the banking giant’s first profit miss since the fourth quarter of 2023, according to LSEG data.
The stock reversed early losses in premarket trading and was last up 0.8%, after falling nearly 3% shortly after the results were released.