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Speaking of JPMorgan’s position, Dimon said the bank is “very valuable” at the current price. Despite its losses, revenues from JPMorgan’s trading division are still strong. Following his statement, JPM stock went up.
JPMorgan Chase & Co CEO Jamie Dimon believes that thanks to the U.S. government’s stimulus programs and the strength of the consumer going into the coronavirus pandemic, the U.S. economy will see a fast recovery. According to Dimon, there are “pretty good odds” of a rapid rebound starting in the third quarter. JPMorgan (NYSE: JPM) stock has positively reacted to the news.
Speaking at a virtual conference hosted by Deutsche Bank, Dimon said:
“You could see a fairly rapid recovery. The government has been pretty responsive, large companies have the wherewithal, hopefully we’re keeping the small ones alive.”
Further, Dimon said that consumers are now in a better position than in the time of the last crisis. Besides, he pointed out that the trading environment has been strong this quarter despite the pandemic.
Jamie Dimon Stated That JPMorgan Will Boost Credit Reserves
Banks have been hit hard by the coronavirus, with the biggest U.S. banks seeing double-digit profit losses during the first quarter. JPMorgan’s profit plunged by as much as 70% compared with a year earlier. However, Jamie Dimon is sure JPMorgan will offset the losses in the second and third quarters. Besides, he believes JPMorgan will boost its credit reserves in the second quarter by two-thirds, or approximately $7 billion the bank added in the first quarter to fend off a potential wave of loan defaults.
Dimon explained:
“Since CECL is very forward-looking, I think that banks will have to put up a lot more credit reserves this quarter. We would have a substantial increase in credit reserves in the second quarter.”
The unemployment rate although slowly but decreases and the economy begins to recover, but there is still a possibility of a prolonged downturn, as many businesses are still not in a sound financial position to rehire employees.
JPMorgan CEO said:
“If it does go on for a year, it won’t be very good. You can’t prop up the stock market forever.”
JPMorgan Stock Soars
Further speaking of JPMorgan’s position, Dimon said the bank is “very valuable” at the current price. Even despite its losses, revenues from JPMorgan’s trading division are still strong. In addition, its customers are spending more on their debit cards again, which brings this year’s total spending levels back in line with that of 2019.
Following his statement, JPMorgan (JPM) stock went up. It jumped by 7.06% yesterday to end the session at $95.82 per share. After hours, it added 0.40% to trade at $96.20. In the pre-market today, JPM shares are 1.85% up, $97.59 per share. Its market cap is $291.965 billion.
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