JP Morgan Lifts Profit Forecasts

Shares in US bank JP Morgan are seeing better demand this week following an encouraging profit forecast from the bank yesterday. Notably, the Morgan lifted its forecasts for interest income fuelling a 6% rally yesterday. The bank now projects net interest income of $56 billion this year, a sharp increase from the $50 billion forecast in January.

The bank had recently attracted criticism from stockholders over its earlier announcement this year that it would be increasing expenses by around 8%, roughly $6 billion. However, CEO Jamie Dimon justified the announcement in light of the bank’s reaffirmed profit target this year.

Looking ahead, the bank noted that while recession risks are a plenty, a downturn was not inevitable in the same way it was ahead of the GFC and cited strong business and consumer balance sheets as a viable buffer. With net interest margins at healthy levels the bank noted that credit concerns are fairly low for now.

Technical Views

JP Morgan

The rally in JP Morgan this week highlights a potential interim double bottom against the 116.02 lows. With price now testing above the bear channel top, the focus is on a test of the 128.58 level next, a break of which will open the way for a fuller reversal higher towards 142.12, in line with bullish MACD and RSI readings.