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Here's Why JP Morgan Chase Shares Climbed 4.9% on Friday

By Lou Whiteman – Apr 12, 2019 at 5:54PM

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A strong first quarter went a long way towards easing fears of an imminent recession.

What happened

Shares of JP Morgan Chase (JPM 0.24%) climbed nearly 5% on Friday after the largest U.S. bank reported first-quarter earnings that came in ahead of expectations. Given the growing fears about the U.S. economy and the health of the banking sector, the results were music to the ears of bank investors. 

So what

JP Morgan Chase reported net income of $2.65 per share in the first quarter, easily topping analyst expectations for $2.35 per share in earnings. The bank generated $9.18 billion in revenue in the quarter, an all-time high for the institution and well above the $8.71 billion in sales in the same quarter a year prior.

A banker reaches across his desk to shake hands with a male customer, who is sitting next to a woman.

Image source: Getty Images.

The bank showed strong momentum across its businesses in the quarter, and executives on the conference call that followed the release said they see no indication of an imminent recession. Investors have been growing nervous about the prospect of a slowdown in the U.S., especially after the Federal Reserve's surprising dovish turn in March, but CEO Jamie Dimon told analysts his outlook remains strong.

"There is no law that says it has to stop," Dimon said when asked about the economy. "I wouldn't count on there having to be a recession in the short run."

Now what

JP Morgan is perhaps the best-run large U.S. bank, and the company has set a very high bar to kick off this earnings season.

As long as the economy is humming, I'd expect JP Morgan to keep generating above-average results. And at least according to Jamie Dimon, there's no reason to believe the economy is going to collapse any time soon.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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