Shares of financial giants JPMorgan Chase (JPM - Free Report) and Bank of America (BAC - Free Report) were down nearly 5% through late afternoon trading Tuesday after comments from representatives of both companies caused investors to hesitate.
For JPMorgan, selling was inspired by the Q2 outlook shared by Daniel Pinto, the bank’s head of corporate and investment banking, at a conference in New York.
“Overall, markets revenue as we see it today will be flat year on year,” Pinto said. “The core activities will be up let's say mid single digits. Then we have a series of one-offs that overall take that back down to flat.”
Pinto did mention that performance in the company’s rates, commodities, and corporate credit business was doing fine, but JPMorgan will apparently be hit with a $100 million quarterly charge related to the tax-oriented investment unit within its fixed income segment.
Meanwhile, Bank of America’s head of global corporate banking, Alastair Borthwick, shared his company’s outlook for lending demand for the year. The executive said that although companies are “more optimistic about the economy,” Bank of America feels it is too early to predict lending for the remainder of 2018.
Economic optimism is typically a good sign for loan growth, but the company’s outlook for lending demand is complicated by the fact that many firms already have extra income thanks to lower U.S. tax rates, Borthwick said.
Bank of America shares slumped as much as $1.46, or 4.8%, to touch an intraday low of $28.70 shortly after these comments were made. Shares of JPMorgan sunk 5.1% to $104.96 before bouncing slightly off their lows in late afternoon trading.
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