JPMorgan Chase Exceeds Q2 Revenue Forecasts

LOCAL MARKET COMMENTARY

On the stock market, the Top 40 index and the All Share index closed 0.8% and 0.7% higher, respectively, ending last Friday at 74,703 and 81,686 points. JSE-listed Capitec Bank announced in a voluntary trading update on Friday that it expects earnings growth of between 25% and 35% for the six months ending 31 August 2024. Acsion Limited reported its earnings for the full year ending 29 February 2024, with sales of ZAR 1,281.05 million, up from ZAR 1,105.93 million the previous year.

EUROPEAN MARKET COMMENTARY

European shares rose on Friday, marking their second consecutive weekly gain due to positive earnings reports and global investor optimism about a potential September interest rate cut by the Federal Reserve. The pan-European STOXX 600 index increased by nearly 0.9%, while the euro zone blue-chip gauge climbed 1.3%, both reaching their highest intra-day levels in over a month. In economic news, consumer prices in France increased by 2.5% year-on-year in June, aligning with preliminary readings, while German wholesale prices decreased by 0.6% compared to the same month last year.

US MARKET COMMENTARY

Wall Street closed higher on Friday, with the S&P 500 and Dow Jones Industrial Average reaching intraday record highs, fuelled by expectations of a U.S. Federal Reserve interest rate cut in September. Despite JPMorgan Chase's second-quarter profit boost from increased investment banking fees, its shares dipped 1.2%. Wells Fargo fell 6% after missing quarterly interest income estimates, and Citigroup dropped 1.8% even with a rise in investment banking revenue. Producer prices in June were slightly higher than expected, but this did not alter predictions of a rate cut, following a surprising decline in U.S. consumer prices reported on Thursday.

ASIA MARKET COMMENTARY

Asia-Pacific markets mostly declined this morning after China reported lower-than-expected GDP growth. China’s economy grew 4.7% in the second quarter, missing the 5.1% forecast and down from the 5.3% growth in the first quarter. Retail sales for June also fell short, rising only 2% year-on-year compared to the expected 3.3%.

CURRENCY MARKET COMMENTARY

The South African rand extended its gains on Friday after surprisingly soft U.S. inflation data led to speculation that the Federal Reserve might cut interest rates in September. Meanwhile, this morning, the dollar rose on safety bids following an attempted assassination of former U.S. President Donald Trump, causing the yen to struggle despite suspected intervention efforts by Tokyo.

COMMODITY MARKET COMMENTARY

Gold prices dipped this morning as the dollar remained strong, with investors awaiting comments from Federal Reserve officials and upcoming economic data for hints on future U.S. interest rate changes. Oil prices also fell for a second consecutive day as the dollar gained strength amid political uncertainty in the U.S. following an attack on presidential candidate Donald Trump, and investors monitored the progress of Gaza ceasefire talks.

Capitec Bank Holdings Limited (CPI) +1.42%

The board expects that for the six months ending 31 August 2024, headline earnings per share will be between 5 090 and 5 497 cents, which is a 25% to 35% increase from the 4 072 cents per share for the same period in 2023. Additionally, overall earnings per share are projected to be between 5 085 and 5 492 cents, also representing a 25% to 35% increase from the 4 068 cents per share for the same period in 2023.

AVI Limited (AVI) +1.45%

We inform shareholders that, according to JSE Limited's requirements, consolidated headline earnings per share for the year ending 30 June 2024 are expected to increase by 21% to 25%, rising from 553.6 cents last year to between 669.9 and 692.0 cents per share. Additionally, consolidated earnings per share, including capital gains and losses, are expected to increase by 20% to 24%, from 555.6 cents last year to between 666.8 and 689.0 cents per share.

Acsion Limited (ACS) -11.09%

The reviewed condensed consolidated financial results for the year ended 29 February 2024 highlight key financial changes: revenue increased by 21% to R1.43 billion from R1.19 billion in 2023, earnings per share rose by 17% to 270 cents from 231 cents, while headline earnings per share decreased by 18% to 98 cents from 120 cents. The net asset value per share increased by 11% to 2 662 cents from 2 391 cents. Additionally, the final dividend declared is 16 cents per share, down from 18 cents per share in 2023. On 11 July 2024, the board of directors declared a final cash gross dividend (No. 7) of 16 cents per ordinary share, payable out of income reserves to all shareholders of Acsion.

JPMorgan Chase & Company (JPM) -1.21%

JPMorgan Chase reported second-quarter profit and revenue that exceeded analysts' expectations, driven by a 52% surge in investment banking fees. The bank posted earnings of $4.26 per share, adjusted, compared to the $4.19 estimate from analysts surveyed by LSEG, and revenue of $50.99 billion, surpassing the $49.87 billion estimate. Earnings rose 25% from the previous year to $18.15 billion, or $6.12 per share, and excluding Visa-related items, profit was $4.26 per share. Revenue increased by 20%, bolstered by strong investment banking and equities trading results. Despite the positive report, shares of JPMorgan fell about 1% on Friday.

Citigroup Inc. (C) -1.81%

Citigroup reported second-quarter results that beat expectations, driven by a rebound in Wall Street activity. The bank posted earnings of $1.52 per share, exceeding the expected $1.39 per share according to LSEG, and revenue of $20.14 billion, slightly above the expected $20.07 billion. Net income increased by 10% from the previous year to $3.22 billion. Revenue rose by 4% to $20.14 billion. Despite the positive financial results, shares of Citigroup fell nearly 2% following the announcement.

Do you prefer a full in-depth report you can read offline?Click here to download the full report.