Why the price fell today

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  • JPMorgan Chase & Co. (NYSE: JPM) stock price fell more than 5% in intraday trading today. That’s why it happened.

JPMorgan Chase & Co. (NYSE: JPM) stock price fell more than 5% in intraday trading today. Investors are reacting negatively to the company revealing in its fourth quarter 2021 results that its compensation and other costs have increased.

Expenditure for the last 3 months of 2021 increased by 11% compared to the previous year. Specifically, the company is expected to grow by approximately $77 billion this year, excluding legal costs, which would have been an increase of 8.6%. These costs are higher than the company expected.

The company’s total trading revenue fell 11% from an estimate of 9%. And while the company’s fixed-income business was one of the company’s biggest pain points, equity revenue also fell, dropping 2% to $1.95 billion. Additionally, the company also reported a slowdown in credit card spending late last quarter.

But the company posted its best quarter ever due to a surge in mergers and acquisitions. Mergers and acquisitions expenses rose 86% in the fourth quarter to $1.56 billion. And net income rose to $10.4 billion versus expectations of $9 billion.

KEY QUOTES:

“JPMorgan Chase delivered strong results across our businesses, benefiting from elevated capital markets activity and a recovery in lending activity, average lending across the business increased by 6%. The economy continues to do well despite headwinds from the Omicron variant, inflation and supply chain bottlenecks. Credit continues to be healthy with exceptionally low net charges, and we remain bullish on US economic growth as the business climate is upbeat and consumers benefit from job and wage growth.

“IB’s overall fees increased by 37%, driven by both Corporate and Investment Banking and Commercial Banking, due to unprecedented M&A activity, a active acquisition financing and strong performance in IPOs. Markets revenue was down 11% from a record fourth quarter last year, but up 7% from the 2019 quarter, driven by strong equity performance. Asset & Wealth Management delivered robust results driven by positive long-term product inflows of $34 billion across all channels and geographies, as well as continued strong loan growth, up 18% , mainly driven by securities lending. In Consumer & Community Banking, client investment assets increased 22%, driven by growth from higher market levels and positive net flows. Combined debit and credit card spending increased 26%, supporting the acceleration in card loan growth, up 5%. Auto loans remain strong, up 7%, although a lack of vehicle supply slowed originations to $8.5 billion, down 23%. Home loans had another strong quarter with originations at $42 billion, up 30%. »

“In 2021, we extended credit and raised more than $3 trillion in capital for our consumer and institutional clients around the world, which include nonprofit organizations and U.S. government entities, including states, municipalities , hospitals and universities. We have also accelerated investments to expand our product distribution capabilities, both domestically and internationally, improve our products and services, and modernize our technology. We continue to find exciting opportunities to invest in our businesses across the business. Our long-standing capital hierarchy remains the same – first and foremost, to invest in and grow our market-leading businesses to support our clients, customers and communities; second, to pay a sustainable competitive dividend; then, return any remaining excess capital to shareholders.

—Jamie Dimon, President and CEO

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.

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