JPMorgan Chase & Co. (NYSE:JPM) executive’s attempts to quash investors’ concerns about the US economy seem to be falling on deaf ears. Pessimism across the larger industry continues to batter the bank’s shares as market volatility clocks levels not seen before.
JPMorgan Bullish Bet
The bank’s investor day did little to avert investor growing concerns. A free fall that has engulfed the stock in the recent past persisted, as investors reacted angrily to the setting aside of $500 million to cover potential losses from oil and gas business. JPMorgan was down by 4.2% as of the close of business having already shed more than 17% in market value since November.
Even with the turmoil, JPMorgan Chase & Co. (NYSE:JPM) remains one of the best performers in the banking sector. Many banks are currently trading at levels last seen in 2011. The nation’s largest bank, however, remains optimistic of reporting record profits amidst the turmoil in the broader industry. It is currently projecting profits of $30 billion up from $24.4 billion posted last year.
CEO, Jamie Dimon says there is too much noise in the markets at the moment which continues to scare many investors. The executive has gone as far as buying $26 million worth of JPMorgan’s stock all in the effort of trying to ramp up investors’ confidence.
Waning Consumer Confidence
Data from the Conference Board shows consumer confidence is at its seven-month low. The JPMorgan Chase & Co. (NYSE:JPM) executive says the current situation has been thrown out of proportion as a look at the bank’s data paints a different picture. According to the executive, fewer consumers are having trouble repaying their loans with more loans coming online by the day.
Much of the turmoil in the stock market is down to growing concerns over the health of the global economy. A plunge in oil prices has seen a good number of companies inch a step closer to bankruptcy. The uncertainty in the energy sector is also slowly finding its way into other sectors leading to levels of volatility not seen in years.
Head of JPMorgan Chase & Co. (NYSE:JPM) division with exposure to the energy industry, Douglas Petno says the real impact of low oil prices has not yet been felt. Looking into the future, the bank says it is setting aside $1.3 billion to cover any losses that would come from the energy sector. Chief Financial Officer, Marianne Lake, says they could up the amount to $1.5 billion should oil prices remain close to $25 a barrel for more than a year.
