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Jacob Maslow
Jacob Maslow
Articles (131)  | Author's Website |

JPMorgan's Stock Falls 1.63% in 6 Days

The bank has been impacted by trade war fears

April 26, 2018 | About:

JPMorgan Chase & Co. (NYSE:JPM) was trading at $110.26 on Thursday, down more than 1.63% since April 20. The decline of the multinational investment and financial services bank's stock is primarily due to all three major U.S. indexes dropping over the past week. The Dow Jones has fallen 1.33%, the S&P 500 has lost 0.85% and the Nasdaq has declined 1.56%.

Chairman Jacob Frenkel spoke with CNBC on April 20 to discuss his concerns regarding trade wars, which have been a primary factor in stock market volatility in recent weeks.

Frenkel claims there's a major risk to the global recovery: protectionism. He warned that a global trade war would be very difficult to turn around as China and the United States start imposing tariffs and higher imports on each other. The Trump administration imposed $60 billion in tariffs on Chinese goods in March.

Fear of a potential trade war has caused markets to fall in the past week, impacting JPMorgan's stock along the way.

The bank was also named in a class-action lawsuit related to cryptocurrencies. It is being sued by Brady Tucker, an investor who claims the bank started charging cryptocurrency transactions as a a merchant cash advance with fees and interest rates as high as 30%.

Tucker claims that he, and many other investors, paid unsuspecting fees that are in violation of the Truth in Lending Act.

Investors expect JPMorgan's stock to rebound on strong financials and a focus on regional expansion. The bank released first-quarter earnings on April 13, posting top and bottom line growth that beat analyst expectations.

The company's earnings per share was $2.37, an increase of 44% year over year, topping expectations of $2.28 per share. JPMorgan's revenue was $2.7 billion higher than the same period a year ago, posting $28.52 billion. Analysts estimated the bank would post revenue of $27.68 billion.

JPMorgan's first-quarter results showed businesses performing well across the board.

Core loans rose at a rate of 8% year over year, deposits grew by 6% and client investment rose 13%. Credit card transaction volumes were also up 12%.

JPMorgan has also made a commitment to regional expansion, with the company pledging to open 70 branches and lend $4.5 billion in the Greater Washington area in the next five years. Experts suggest the bank will need to acquire another lender to reach its goal.

The bank has said it has no plans to make an acquisition, but experts agree that would speed up the process.

Investopedia reports that big banks also saved $3.6 billion in the first quarter due to the Trump administration's tax cuts. JPMorgan, Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) have seen their tax rates fall to below 17% and 23% during the first quarter of the year.

Executives expect tax rates to be between 20% and 22%.

The bank is expected to use the tax break to open new branches and further speed up the company's growth.

JPMorgan's stock rose 1.68% in the 30-day period ended April 25 and 1.89% between January 2 and April 25.

Disclosure: Author does not have a stake in the listed equities.

About the author:

Jacob Maslow

Jacob Maslow is a writer who began his career as a payroll manager. The same affinity for numbers that originally led him to an early career in accounting now comes in handy when it comes to understanding and working with marketing analytics.

A native of New York, Maslow is now based in the Middle East, where he lives with his wife and five children and provides high-quality services to clients in a variety of industries, including the legal, medical and financial sectors.

In addition to his marketing and consulting work, Maslow has founded a variety of news websites, including Legal Scoops. He is a frequent contributor to a variety of publications including business.com and business2community.com.

Visit Jacob Maslow's Website

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