- JPMorgan surged as much as 8% on Monday after the company raised its 2022 net interest income guidance.
- JPMorgan CEO Jamie Dimon talked up the strength of the consumer and said the economy could avoid a hard landing at its annual investor day.
- Dimon's optimistic comments helped lift other bank stocks considerably in Monday trades.
JPMorgan stock surged as much as 8% on Monday following the bank's annual investor day, in which its CEO Jamie Dimon made some positive comments about the consumer.
The largest bank in America told investors on Monday that it now expects 2022 net interest income of at least $56 billion, representing a $3 billion increase from its prior guidance. It increased its profit guidance thanks to what it sees as a very strong consumer despite the ongoing rise in interest rates and higher inflation.
Last month, Dimon said on JPMorgan's first-quarter earnings call that economic "storm clouds on the horizon may disappear, they may not." Today, Dimon reiterated that view, but highlighted the fact that those "storm clouds" may in fact dissipate and not lead to a big problem like they did in 2008.
Jamie Dimon said the U.S. economy remains strong, and potential obstacles to growth are not set in stone.
"Strong economy, big storm clouds. I'm calling it storm clouds because they're storm clouds. They may dissipate. If it was a hurricane, I would tell you that," Dimon said. And if a recession does ultimately materialize in the economy, it would be unlike others thanks to a very strong consumer, according to the company.
JPMorgan's credit outlook is strong, with net charge offs at a record low of 0.30% in 2021. While the bank expects net charge offs to rise back to pre-pandemic levels in the future, a "strong consumer and wholesale balance sheets will delay normalization past 2022," the bank said.
"The US economy remains fundamentally strong, despite recent mixed data. [While] recent developments have increased the risk of a future adverse outcome, [our] fortress principles are designed to withstand any operating environment," the company said.
The positive comments from JPMorgan helped lift the broader financial sector and other big bank stocks in Monday trades. The financial sector rose 3.5%, while Morgan Stanley, Bank of America, and Citigroup rose 4%, 6%, and 7%, respectively.