US President Donald Trump, left, and Chinese President Xi Jinping arrive for a meeting on the sidelines of the G-20 Summit in Hamburg, Germany.AP/Saul Loeb
- During second quarter earnings calls on Friday, bank executives from Citi and JPMorgan tamped down concerns about the impact of Trump’s trade war on their firms.
- Worries over trade may have actually boosted results, the executives said, by increasing client uneasiness which led to increased trading business.
Executives from the biggest US banks on Friday brushed off concerns that Trump’s trade war was biting into economic growth or corporate earnings.
“If you’re looking for potholes out there, there are not a lot,” JPMorgan Chase CEO Jamie Dimon said on a second quarter analyst call on Friday. He did acknowledge, however, that consumer and business confidence levels coming off their highs may have been due to trade concerns.
Even more, worries over trade may have boosted the bank’s results by increasing uncertainty and enflaming market volatility that led to increased trading business. Dimon’s bank posted record earnings for the second quarter and JPMorgan finance chief Marianne Lake said on the same call that ironically, economic uneasiness has given clients more reasons to rebalance their portfolios and trade.
“There’s just more catalysts in the market and just generally more client participation,” she said. European Union and emerging-market unrest also helped, she added.
JPMorgan’s revenue from trading stocks and bonds rose 14% to $5.4 billion, better than analysts had anticipated. Citigroup, which also reported earnings on Friday, said trading revenue declined just 1% to $3.9 billion.
Citi’s finance chief, John Gerspach, also tamped down trade concerns, saying in a call with media that he saw “little direct impact” from the first days of the dispute.
“We haven’t seen changes in behavior of any significance and so right now, it’s the rhetoric we’re tracking,” he later added on an analyst call. “I think the markets have the fears of what the rhetoric leads to but at this point, we’re not seeing it coming through in the numbers.”
The Trump administration imposed a 25% tariff on roughly $34 billion worth of Chinese goods last week, leading Beijing to retaliate with in-kind tariffs on American products, including soybeans. President Trump has showed no signs of backing down on threats to impose an additional $200 billion worth of additional tariffs on China.
Even so, Dimon warned earlier in the day that there’s always a risk that the current tit-for-tat can escalate and lead to unintended consequences.
“There are unpredictable outcomes when you start skirmishes like this with multiple countries,” Dimon said on a conference call with journalists. “It’s a worry. I wouldn’t use the word major yet, but hopefully it gets resolved.”
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