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April 14 (UPI) -- While reporting a record year-on-year increase in net revenue, Jamie Dimon, the head of JPMorgan Chase, said the U.S. economy has shown resilience, but there may be "storm clouds" on the horizon. Earnings season is underway, with big banks like JPMorgan and Wells Fargo among the first out of the gate with reports for the first quarter. Market watchers are keen to comb through those earnings due to recent concerns about the health of the global financial sector.
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JPMorgan on Friday reported total revenue of $38.3 billion, a 25% increase over year-ago levels. Earnings-per-share of $4.10 marked a 56% increase over first quarter 2022.
"The U.S. economy continues to be on generally healthy footings -- consumers are still spending and have strong balance sheets, and businesses are in good shape," Dimon said. "However, the storm clouds that we have been monitoring for the past year remain on the horizon, and the banking industry turmoil adds to these risks."
The collapse of Silicon Valley Bank in California and the forced marriage between Swiss investment bank UBS and troubled Credit Suisse stoked fears of a global crisis in the financial sector. Banks had faced pressure in part from aggressive rate hikes from the Federal Reserve that undermined the strength of their long-term investments.
The heads of the various Federal Reserve districts, however, say this is not a repeat of the collapse of Lehman Brothers and the broader subprime mortgage crisis that triggered the so-called Great Recession during the mid-2000s.
"The banking situation is distinct from 2008 as it has involved far fewer financial players and fewer issues that need to be resolved, but financial conditions will likely tighten as lenders become more conservative, and we do not know if this will slow consumer spending," Dimon said.
Speaking Friday, Christopher Waller, a member of the Board of Governors at the Federal Reserve said that, with strong growth in the labor market, tighter monetary conditions may be necessary to slow consumer-level inflation. Recent data point to lower prices at the wholesale level, though Waller said it may be too soon to bet on a possible rate hike next month.
"I stand ready to adjust my stance based on what we learn about the economy, including about lending conditions," he said.
For his part, Dimon said he too would monitor inflationary data and the potential for higher interest rates, along with various geopolitical tensions across the world. But against those concerns, he said the bank would continue to perform as expected.
"While we hope these clouds will dissipate, the firm is prepared for a broad range of outcomes, and we are confident that we can serve the needs of our customers and clients in all environments," he said.
Most major market indices were in the red during Friday trading, though banks were running against the trend. Shares for JPMorgan were up 7% as of 12:30 p.m. EDT to trade at $138.08 per share.
