Excluding a $658 million securities loss, JPMorgan's EPS matches one consensus and trails another

Start with the consensus, because the claim that one item caused the miss depends on it. Quartz attributes its $5.75 expectation to Bloomberg ^[28]. Yahoo Finance gives $5.90 as the analyst forecast ^[29]. Against the first the miss is $0.18, all of it the loss ^[15]; against the second it is $0.33 as reported and still $0.15 after the add-back ^[16][17]. Premarket trading settled nothing: the stock fell 3% at first, then ticked up 1%, Yahoo reported ^[9].

Total markets revenue rose 15% to $10.3 billion against the $10.5 billion Bloomberg expected ^[5], a shortfall of $0.2 billion, or 1.9% ^[18]. Inside it, equity markets revenue of $4.95 billion, up 49% ^[11], implies about $3.32 billion a year earlier and a gain of roughly $1.63 billion, or rather something near that, since both percentages are rounded ^[25]. The total implies about $8.96 billion a year earlier and a gain of about $1.34 billion ^[19]. If equities and fixed income make up the total, fixed income fell by about $0.3 billion ^[26], close to the 4% decline Bloomberg reports ^[10].

One fixed-income decline, the first in over two years ^[10], fits two readings. In the first, the second quarter was the outlier: Yahoo calls it a standout, and both trading and dealmaking revenue fell from it ^[12]. In the second, the business has stopped growing and this is the start of a run. We lean to the first, but one quarter cannot separate them, and a second year-on-year decline next quarter would settle it against us.

Expenses are the less comfortable line. At $27.3 billion they came in ahead of analyst projections, Bloomberg reported ^[6]. At the $5.75 consensus, adjusted EPS still landed on the forecast ^[28][2], so by subtraction something else ran ahead of analysts. At $5.90, the $0.15 left after the add-back is at least consistent with the expense overshoot ^[17].

Jamie Dimon said in a statement that "large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface" ^[7]. "These forces may be manageable, but we remain prepared for a wide range of outcomes," Dimon said ^[8]. Elevated asset prices are on that list, and in our view the quarter's strongest line, equity markets ^[11], is the one most tied to them. The counter-thesis is that clients are still adding money: Dimon highlighted $263 billion of net inflows in Asset & Wealth Management ^[13], where assets under management reached $5.2 trillion, up 13% ^[14].