Wall Street banks’ latest results offered a pessimistic picture of the U.S. economic outlook!
The nation’s biggest lenders used their quarterly reports to reassure investors about their own financial health, while flagging signs from their commercial and consumer arms of a recession ahead.
Tweet on Wall street outlook
Wall Street banks' latest results offered a pessimistic picture of the U.S. economic outlook!
Quarterly reports reassure investors about their own financial health, while flagging signs from their commercial & consumer arms of a recession ahead
Chart’s on biggest takeaways: pic.twitter.com/3ys6GVGMv5
— The_Journalbiz (@the_journalbiz) October 14, 2022
Bank Chart on card spending and mortgage lending
Here were some of the morning’s biggest takeaways:
Mortgage lending is quaking under the pressure of soaring interest rates.
Activity fell by nearly 60% at Wells Fargo and by more than 70% at JPMorgan. (Interestingly, Citi’s much smaller residential mortgage business grew year over year, by 24%.) More on mortgage lending here.
- Banks set aside more money to cover future loan losses. Last year, they were drawing down their rainy-day funds.
Consumers leaned more on their credit cards to deal with rising prices and a slide in their savings. Card spending was up by double-digit percentages at JPMorgan, Wells and Citi. Read more here.
Bank executives say they are not seeing cracks in the financial system just yet, but they’re worried. “We’re just getting closer to what you and I might consider bad events,” JPMorgan CEO Jamie Dimon said.