Ol' Reliable came through again.
JPMorgan Chase & Co. (JPM) has started off earnings season for banks with a strong beat on third-quarter earnings that is boosting the stock around 2% in trading before the opening bell. Maybe more importantly, both the Dow Jones Industrial Average and the S&P 500 are rising about 1% as the market bounces back from a bloody couple days.
JPMorgan Chase posted $27.82 billion in revenue in the quarter, cruising past analyst estimates by $380 million, while beating analyst estimates on earnings per share by $0.08 to $2.34. (JPMorgan Chase is a holding of Jim Cramer's Action Alerts PLUS charitable trust.)
The bank has beaten on estimates every quarter for three years, making it a reliable stock to count on when the clouds roll in on the market. The share price for the banking giant has nearly doubled since the last earnings miss in October 2015.
JPMorgan Chase's results were largely driven by large increases in revenue in the bank's consumer and community banking segment.
The segment saw a $1.2 billion increase in net revenue year over year and an approximately $800 million increase in revenue sequentially. The strong results help offset the corporate, asset management, and investment banking segments, which all saw decreasing sequential net revenue.
"Our customer satisfaction across [consumer and community banking] is at or near all-time highs," CEO Jamie Dimon said in a statement. "We continue to grow deposits faster than the industry, even as the pace slows with rising rates."
DImon said the segment attracted record net new money in the quarter, driving its customer assets up 14%.
As TheStreet's Bradley Keoun noted shortly after the earnings release, competition for deposits is critical to large banks as they struggle to keep customers from defecting to higher-paying competitors. This is especially critical while bond- and stock-trading fees are impacted by lower transaction volumes.
Only about a month after he said he could beat President Trump in an election, Dimon was complimentary of the president's tax and regulatory policy in terms of his bank's performance.
"We are extremely excited to be expanding again, as smart regulatory policy and a competitive corporate tax system help us to deliver on our commitment to invest in our customers and communities." Dimon said.
The macro effect of rising interest rates has helped the bank expand net interest margin to 2.51% in the third quarter from 2.46% in the second quarter. The figure just edge analyst estimates of 2.5% on the pivotal factor.
To be sure, while Dimon was positive on the strength of the U.S. economy at present, he issued a tentative forecast for the future.
"The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy," he said.
The market will look for Dimon to expand on this forecast and his successful quarter more broadly in the company's earnings presentation at 8:30 a.m. His comments will be critical to market confidence in the banking sector and the overall market.