Where Will JPMorgan Chase Be In 5 Years?

Economic

Summary:

JPMorgan Chase (JPM -0.99%) is a sprawling financial services titan. This mega-bank has produced a total return of 208% in the past five years. It's difficult for anyone to complain about that type of gain.

As of this writing, shares of JPMorgan Chase trade just 5% off of their all-time high. Investors might have their eyes on the business if they're looking to gain more exposure to the industry in their portfolio, but where will this top bank stock be in five years?

Strong financial performance

JPMorgan's impressive stock performance in the past five years has been driven, unsurprisingly, by strong financial gains. In 2024, the company reported revenue of $178 billion, which was 54% higher than in 2019. What's more, diluted earnings per share soared 84% during that time.

The momentum has continued into 2025, despite recent economic challenges. In Q1, total deposits were up 2% year over year, providing low-cost funding to power loan growth. Net interest income rose 1%, with non-interest income jumping 17%.

This doesn't mean there aren't risks to be mindful of. Since banks in general are so exposed to the economy and credit cycle, a potential cause for concern is the chance of a recession happening. Even CEO Jamie Dimon isn't exactly the most optimistic. On the Q1 2025 earnings call, he agreed with JPMorgan's chief U.S. economist, putting the chance of a recession at 50-50.

Dominating the banking sector

As of March 31, JPMorgan Chase had a whopping $2.5 trillion in total assets on the balance sheet. What's more, it carries a massive market cap of $736 billion. And in the last 12 months, it raked in $181 billion in net revenue. This is a truly colossal organization.

This business is the clear leader in the financial services sector, with its hands in numerous different areas. Not only does JPMorgan have a significant presence in capital markets and investment banking activities, but it's also a strong player in asset and wealth management, as well as in consumer banking. This diversity presents a favorable setup. Weakness in one area can be more than offset by robustness in another.

Investors can rest assured knowing that this company won't be disrupted anytime soon, if ever. It has built up durable competitive advantages that support its staying power.

There are cost advantages that stem from the company's huge scale. It's able to leverage expenses and investments in many areas, such as technology and marketing efforts.

Then there are switching costs, both for corporate customers and individual consumers. Because JPMorgan Chase can essentially offer any financial product or service its customers need, the more ingrained it becomes, the harder it is for customers to leave.

It also helps to have industry veteran Jamie Dimon at the helm, who many agree is one of the best CEOs. He successfully navigated the Great Recession, making JPMorgan an even better bank.

One major headwind for investors

The stock has done remarkably well in the past. And given the factors just mentioned, investors are probably wondering why they don't own JPMorgan Chase.

Despite a positive view of the company, I don't believe future returns will resemble the past. The main reason why comes down to valuation. Shares trade at a steep price-to-earnings ratio of 13, which is above the trailing five- and 10-year averages.

Investors familiar with the banking industry might be more inclined to look at the price-to-book ratio. As of this writing, this metric stands at 2.2, near the highest it has been in the past 20 years. Consequently, I wouldn't be surprised if this stock lags the broader market between now and 2030.

Source: The Motley Fool

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Thomas

Cryptocurrency

Britain's financial regulator is to remove a ban on consumers buying crypto exchange-traded notes (ETNs), ditching its previous position of wanting to keep them out of the hands of retail investors.

The Financial Conduct Authority said on Friday that allowing retail investors to buy ETNs would support growth and competitiveness, in the latest sign that the UK is shifting its approach to crypto as the government seeks to grow the economy and support a digital assets industry.

Last year the FCA had approved the launch of crypto ETNs for professional traders but banned retail investors from access, calling the products "ill-suited" because of "the harm they pose".

"We want to rebalance our approach to risk and lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them given they could lose all their money," David Geale, executive director of payments and digital assets at the FCA, said in a statement on Friday. The proposal will now go out for consultation.

Britain in April published draft laws for bringing cryptocurrencies under compulsory regulation for the first time, aligning it with the United States' approach, rather than the European Union, which has built rules tailored to the industry.

To be sold to individual consumers, the ETNs will need to be traded on an FCA-approved investment exchange, the regulator said.

A ban on retail investors trading cryptoasset derivatives would remain, the watchdog added.

Source: Yahoo Finance

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Damon

Economic

German Chancellor Friedrich Merz's meeting with U.S. President Donald Trump was dramatically overshadowed by the U.S. leader's spat with Elon Musk. But it was still seen as a win for Merz.

"Being sidelined is not necessarily always a bad thing," Carsten Brzeski, global head of macro at ING, told CNBC on Friday. "In fact, it might have even helped Merz as the Musk distraction was also deviating attention away from more controversial topics.

It was a high-stakes trip for Merz, who is just a few weeks into his chancellorship, especially given the treatment other leaders have gotten from Trump in the Oval Office in recent months.

As such, Merz is unlikely to be disappointed about the outcome — especially given the potential downsides.

"Having avoided an escalation in the Oval Office is already an achievement these days," Brzeski added.

A full agenda

Merz arrived in D.C. with a full agenda that ranged from strengthening relations between the U.S. and Germany, to tariffs — which could significantly impact key German industries — as well as U.S. support for Ukraine in its war with Russia and higher NATO defense spending.

While we don't know what was discussed behind closed doors, Merz was seemingly able to address most of these points with Trump, political strategist Julius van de Laar told CNBC's "Squawk Box Europe" on Friday.

What Germany's Merz wants to tackle in Trump meeting

"I think what Friedrich Merz got across is that he hopes that the U.S. president will continue to support Ukraine," he said, noting that the issue had gathered momentum recently given several significant attacks. Merz was able to pick up on this, and draw links to the anniversary of D-Day a day after their meeting.

"And he said the United States played a great role in ... freeing Europe from the Nazi regime back then, and so he's hoping that Donald Trump will ... say we're going to get engaged again and help Europe become free of dictatorship," van de Laar said.

Merz making this point was important in the context of highlighting the U.S-German relationship, according to Jackson Janes, senior resident fellow at the German Marshall Fund. Speaking to CNBC's "Squawk Box Europe," he also pointed out that Trump was gifted his grandfather's birth certificate by Merz, "making the point 'you have a relationship with Germany in your own family.'"

German Chancellor Friedrich Merz presents US President Donald Trump with what Merz said was the birth certificate of Trump's grandfather, who was born in 1869, during a bilateral meeting in the Oval Office of the White House in Washington, DC, on June 5, 2025.

Janes also noted that Merz highlighting Germany's plans for higher defense spending would have marked a positive note in the discussion.

Germany recently changed its fiscal rules to allow for higher defense spending, and Merz's government seems to be making it a priority. The chancellor has promised a financial push to boost the German military, and the country's foreign minister has suggested support for Trump's proposal that NATO members spend 5% of their gross domestic product on defense.

Germany backs Trump's push for 5% NATO defense spending target

Meanwhile, the sensitive topic of Germany's far-right party, the Alternative fuer Deutschland, was seemingly avoided. Officials in the Trump administration have in recent weeks come out in support of the party after German intelligence services classified it as a "proven right-wing extremist organization."

This led to clapbacks from German politicians, with Merz himself warning the U.S. not to get involved. The classification of the AfD is currently on hold amid a legal challenge.

'A home run' for Merz

All in all, Merz's visit to D.C. was seen as "a home run or a hole in one," van de Laar said.

ING's Brzeski also suggested that the trip laid good foundations between the leaders. "There seems to be some common grounds between Trump and Merz, which could be the seeds for a more constructive relationship," he said.

Merz even appeared to get some compliments from Trump, with the president commending him for his English skills and saying that while "difficult," the German leader was a "very good man to deal with."

Following the meeting, Merz appeared satisfied, saying in a social media post that the atmosphere was "really good," and that the two have much in common. "I am coming back with the feeling that we can speak on the phone any time," he said, according to a CNBC translation.

But even an in-person reunion might not be too far off: a Trump trip to Berlin is already being planned, Merz told German media.

Source: CNBC

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Manuel

Economic

China–U.S. Trade War

President Donald Trump said his Chinese counterpart Xi Jinping had agreed to restart the flow of rare-earth materials, as negotiators from the two nations prepare to resume trade talks on June 9 in London.

The developments come as the world’s two largest economies look to resolve a simmering dispute over tariffs and technology that has unnerved markets. Trump and Xi held a 90-minute call on Thursday that saw the two agree to defuse growing tensions spurred by concerns over the flow of critical minerals needed by American firms.

US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer are set to meet Monday “with Representatives of China, with reference to the Trade Deal,” Trump said Friday on social media. “The meeting should go very well.”

Earlier talks between the two countries in Switzerland in May resulted in a tariff truce between Beijing and Washington that set the stage for further discussions on trade. But negotiations between the rivals stalled after the Geneva meeting, with both sides accusing the other of violating the agreement that brought down duties from massive highs.

The US expressed concerns over the lack of rare-earth magnets essential for American electric vehicles and defense systems, while China bristled at fresh US restrictions on artificial intelligence chips from Huawei Technologies Co., as well as other advanced technologies and crackdowns on foreign students in the US.

Asked Friday if Xi had agreed to restart the flow of rare-earth minerals and magnets, Trump told reporters on Air Force One: “Yes he did.”

China also approved temporary export licenses to critical mineral suppliers to major US automakers, Reuters reported earlier.

But questions remain about what Trump conceded to Xi in their call, which the US president had eagerly sought. The Chinese Foreign Ministry in a statement said that Trump told Xi Chinese students are welcome to study in the US, and Trump later said it would be his “honor” to welcome them.

The call between Trump and Xi generated some hope on Wall Street for lower duties between the US and China, although investor optimism was limited, citing the lack of details on key matters and the thorny issues that await negotiators.

The inclusion of Lutnick in the new round of talks may signal that Trump is willing to reconsider some of the technology curbs that threaten to hobble China’s long-term growth ambitions.

Source: Bloomberg

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Manuel

Central Bank

The Federal Reserve announced on Friday that Michael Horowitz will serve as the central bank's new inspector general.

Horowitz, who most recently served as the Justice Department's inspector general, or IG, replaces Mark Bialek, who retired in April after serving in that role since 2011. As Fed IG, Horowitz is also responsible for serving as the independent watchdog of the Consumer Financial Protection Bureau.

While serving as the DOJ's watchdog, Horowitz also chaired a committee of 21 federal inspectors general charged with overseeing $5 trillion in relief spending tied to the COVID-19 pandemic. He also chaired the Council of the Inspectors General on Integrity and Efficiency and has been a member of the U.S. Sentencing Commission.

Earlier, he served as an assistant U.S. attorney in the Southern District of New York and was chief of its public corruption unit.

The Fed's IG is unusual among government watchdogs for being selected by the chair of the central bank. Some senators, who contend that arrangement makes it impossible for the IG to conduct real oversight over the central bank, have introduced legislation that would have the president select the IG, who would then be subject to Senate confirmation.

The central bank IG was most prominently in the public's eye in the aftermath of the central bank's trading controversy, which saw the office weigh in on the propriety of some Fed officials' trading activities. Bialek, the former IG, faced a tough hearing in Congress in 2023 and generated controversy over his defense of his high level of compensation.

Source: Reuters

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Manuel

Stocks

Economic

The U.S. stock rebound has driven key indexes to the cusp of record levels, with fresh economic data and trade and fiscal policy developments set to test whether equities will get an extra push higher in the near term.

A monthly U.S. inflation report headlines the events for markets in the coming week.

Equities have bounced back from a steep fall in April, sparked by concerns about the economic fallout from President Donald Trump's tariff plans. Stocks ended the week on a high note, with the S&P 500 closing on Friday above 6,000 for the first time since late February, buoyed by a monthly U.S. jobs report that calmed worries about the economy.

The benchmark S&P 500 ended on Friday 2.3% off its record closing high from February.

"I'd still say it's a cautious tone" in the market, said Jim Baird, chief investment officer with Plante Moran Financial Advisors. Despite a "recovery off the lows, I still think it's a market that is looking for greater clarity."

Some uncertainty stems from how the U.S. economy is weathering the shifting trade backdrop. Trump has eased back on some of the harshest tariffs since his April 2 "Liberation Day" announcement sent stocks tumbling, but investors are waiting to see how other levies may be rippling through the economy.

The consumer price index report for May, due on Wednesday, could give insight into the tariff impact at a time investors are wary of any flare-ups in inflation.

"Consumers are feeling the impact of higher prices and if there are indications that near-term inflation could re-accelerate, that is going to put further pressure on discretionary spending and ultimately could lead to a more pronounced slowdown in growth," Baird said.

The CPI report will be one of the last key pieces of data before the Federal Reserve's June 17-18 meeting. The U.S. central bank is widely expected to hold interest rates steady at that meeting, but traders are pricing in nearly two 25-basis point cuts by the end of the year.

"If we see inflationary data that defies what people are concerned about based on this tariff talk and it comes in cooler, then that could also be a catalyst to at least test those old highs," said Jay Woods, chief global strategist at Freedom Capital Markets.

For the year, the S&P 500 is up 2%. But the index has stormed back over 20% since April 8, at the depth of the stock market's plunge on concerns over the tariff fallout.

Investors also are grappling with uncertainty over a sweeping tax-cut and spending bill under review in the U.S. Senate. Wall Street is monitoring how much the legislation could stimulate economic growth, but also inflate the country's debt burden as widening fiscal deficits have become a central concern for markets in recent weeks.

"As debt increases, it has a greater negative impact on growth," said Kristina Hooper, chief market strategist at Man Group.

The legislation also appeared to be the source of a severe rift between Trump and Tesla chief Elon Musk, which weighed on stock indexes. Former Trump ally Musk called the bill at the heart of Trump's agenda a "disgusting abomination," while Trump said he was "disappointed" by the billionaire's public opposition.

Trade talks also remain at the forefront of markets, with a 90-day pause on a wide array of Trump's tariffs set to end on July 8. Trump said on Friday three of his cabinet officials will meet with representatives of China in London on Monday to discuss a trade deal.

"When it comes to policy from Washington, D.C., there are still big question marks," said Bob Doll, chief investment office at Crossmark Global Investments.

Source: Reuters

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Manuel

Economic

Forex

Treasuries slumped after stronger-than-expected US job and wage growth prompted traders to trim bets that the Federal Reserve will cut interest rates this year.

The Friday selloff lifted yields across maturities by as much as 12 basis points, led by shorter-dated tenors more sensitive to Fed rate changes. The benchmark 10-year note’s rate rose 12 basis points to 4.51%, and yields across the spectrum once again exceeded 4%. Traders Reel In Fed Cut Bets as Strong Job Data Drags on Bonds_1

Traders Reel In Fed Cut Bets as Strong Job Data Drags on Bonds_1

Interest-rate swaps showed traders now see a roughly 70% chance of a quarter-point rate cut by September, compared with a probability of about 90% on Thursday. The amount of easing priced in for the year declined to about 43 basis points, fewer than two quarter-point cuts.

“You are seeing a little bit of the bond market reaction here of pricing out a bit of the expectations in terms of the Fed,” Jeffrey Rosenberg, portfolio manager at BlackRock Inc., said on Bloomberg Television. “The big takeaway is a slowing-but-still strong labor market.”

Nonfarm payrolls increased 139,000 last month after a combined 95,000 downward revisions to the prior two months. The median forecast of economists was for an increase of 126,000. The unemployment rate held at 4.2%, while hourly wages picked up.

Gains for US equities also curbed demand for bonds. The S&P 500 rose about 1%.

Following the job report, President Donald Trump urged the Fed to cut rates by a full point, intensifying his pressure campaign against Chair Jerome Powell.

Fed policymakers have said they are waiting for more data before lowering rates as they balance the risks of still elevated inflation and a potential economic slowdown. Officials have said it could take months to gain clarity on the economic impacts of sweeping policy changes, particularly around trade.

Consumer price index data for May, scheduled to be released June 11, is expected to slow acceleration, according to the median economist estimates in a Bloomberg survey. The overall rate is seen rising to 2.5% from 2.3%, the core rate to 2.9% from 2.8%.

Fed officials traditionally observe a communications blackout beginning the second Saturday before a meeting, a period that begins June 7. Also ahead next week are Treasury auctions of three- and 10-year notes and 30-year bonds, whose expected yields are higher as a result of Friday’s selloff.

This week’s data has painted a mixed picture of the job market amid the uncertainties of the Trump administration’s tariff wars. ADP private-sector payrolls showed hiring decelerated in May to the slowest pace in two years, while job openings unexpectedly rose in April.

“There’s nothing here to change the status quo for the Fed,” said Ed Al-Hussainy, a rates strategist at Columbia Threadneedle Investment, referring to Friday’s report. “Some downside bets on Fed cuts this summer will likely come out.”

Economists at Citigroup — whose Fed policy forecast was among the most dovish on Wall Street — revised it based on the jobs report. They expect a rate cut in September versus July previously, and at each of the subsequent four meetings through March.

That remains a notably dovish call. The most common forecast among major Wall Street banks is for just one cut this year, in either September or December.

Traders are still wagering on policymakers keeping rates on hold at their June 17-18 gathering, and see only about 12% odds of a move in July.

“The jobs number takes June and July off the table,” said Kevin Flanagan, head of fixed income strategy at WisdomTree. “We continue to play this waiting game and with no visible slowing in jobs, the market now turns to focusing on whether the disinflation trend continues with CPI next week.”

What Bloomberg strategists say...

“While the initial bond reaction has focused on the earnings beat (and possibly the marginal headline beat), in aggregate this data doesn’t really move the needle on our understanding of the labor market.” — Cameron Crise, Markets Live Blog macro strategist

In the currency market, a Bloomberg gauge of the dollar rose to the day’s high after the release of the report, trimming its loss this week to 0.4%.

The Treasury selloff undermined popular wagers that longer-term yields would continue rising more than shorter-term ones. Based on expectations for Fed rate cuts capping short-term yields and for persistent budget deficits causing investors to demand higher long-term yields, so-called curve-steepening trades have been working since March.

This week, however, the gap between five- and 30-year yields narrowed about 12 basis points, the most since October.

Source: Bloomberg

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