JPMorgan Chase share price and Q2 earnings results preview

When are JPMorgan’s results expected?

JPMorgan Chase & Co (All Sessions), the US multi-national banking giant, is set to release its second quarter (Q2) 2023 results on 14 July 2023. The results are for the quarter ending June 2023.

What is ‘The Street’s’ expectation for the FY results?

‘The Street’ expectations for the upcoming results are as follows:

Revenue of $38,965 billion : +23.19% year-on-year (YoY)
Earnings per Share (EPS) : $3.97: +43.84% (YoY)

JPMorgan - a harbinger for the US economy

JPMorgan Chase & Co. and other major US banks are always closely-watched for the insight they provide into the US economy.
In June they all cleared the Federal Reserve's stress tests, leading to potential dividend increases.

JPMorgan’s CEO Jamie Dimon last week said that the stress tests show that banks are “resilient -- even while withstanding severe shocks -- and continue to serve as a pillar of strength to the financial system and broader economy."

The US banking behemoth late last Friday announced that it plans to raise the bank's dividend to $1.05 a share, up from $1 a share, for the third quarter, subject to board approval.

With JPMorgan kicking off the Q2 earnings season, should the bank exceed estimates then this should provide a lift to risk appetite generally, and potentially result in an extension of the rally in stocks seen around the globe over the past three quarters.

Higher interest rates are expected to support the bank’s Q2 results, although lending has taken a hit during the March banking crisis.
During the first half of this year, US interest rates continued to rise, reaching a sixteen-year high of 5.00-5.25%, as the Federal Reserve (Fed) battles stubbornly high inflation readings.

While loan losses are expected to rise due to the higher rates, analysts believe the damage will be less severe than in previous recessions. If they are proven to be incorrect, the JPMorgan share price could sell off rapidly, however.

Despite growing by a much better-than-expected annualised 2.0% in the first quarter, according to a final revision of the Gross Domestic Product (GDP) figure last week, the US economy is still facing potential headwinds but perhaps these will only impact JPMorgan’s results later in the year.

For now the overall picture remains relatively healthy, with trading volumes, investment banking fees, net interest margins and income from mortgage banking all likely to remain solid for the bank.

How to trade JPMorgan into the results

Refinitiv data shows a consensus analyst rating of between ‘buy’ for JPMorgan – 5 strong buy, 15 buy and 7 hold - with the median of estimates suggesting a long-term price target of $159.00 for the share, roughly 10.5% higher than the current price (as of 6 July 2023).

IG sentiment data shows that 70% of clients with open positions on the share (as of 6 July 2023) expect the price to rise over the near term, while 30% of clients expect the price to fall. Trading activity over this week and month shows 55% of buys.

JPMorgan – technical view

Despite European hedge funds having reduced their exposure to US banks while propping up their holdings of European banks since March, the JPMorgan share price this week briefly managed to break through major resistance and rose to levels last traded in February 2022 - to a 15-month high - before coming off again.

The fact that the January-to-March highs at $143.49 to $144.04 have only been exceeded on two consecutive days and that this rise happened on reduced volume around the Independence Day holiday before the JPMorgan share price fell below this resistance area, does point to a false breakout having been seen.

If this is indeed the case, a significant bearish reversal over the summer months might unfold over the coming days and weeks.

JPMorgan Daily Chart

Potential downside targets are the late June low and the October-to-July uptrend line at $137.62 to $137.05. Failure there would push the May low and 200-day simple moving average (SMA) at $132.68 to $131.81 to the fore.

JPMorgan Weekly Chart

Only a resumption of the bull trend, rise and daily chart close above the current early July high at $147.48 would put the September 2021 low at $150.49 ahead of the December 2021 low at $151.84 on the cards.