The Zhitong Finance App learned that J.P. Morgan Chase (JPM.US) expects transaction revenue and investment banking fees to grow in the third quarter, which is in stark contrast to the warning issued by Bank of America (BAC.US) earlier this week.
Xiaomo Co-President Doug Petnor said on Tuesday that for the quarter ending September 30, transaction revenue is expected to increase in the middle to high range of ten percentage points. He also said that J.P. Morgan Chase's investment bank fee revenue may also rise by a similar margin.
At the same meeting just a day ago, Bank of America CEO Brian Moynihan said that third-quarter revenue will be “basically the same” compared to the same period in 2025. Moynihan said that the bank's financing business declined in part due to a slowdown in the balance of major Asian brokers.
After Petno finished his speech, J.P. Morgan's stock price rose 1.3% to $354.50 at 3:35 p.m. New York time, erasing the previous decline.
Since this year, Wall Street's trading department has performed well, in part because heightened geopolitical activity has boosted the volatility of financial markets. For J.P. Morgan, strong trading earnings helped the bank set a record profit in the second quarter.
Pettno said that the bank's investment banking business still has strong trading reserves. Earlier this month, Dorothy Blessing, co-head of global investment banking at J.P. Morgan Chase, said the deal matching looks set to usher in a record year.
Wall Street has also benefited from major IPOs, including SpaceX's record listing earlier this year. Artificial intelligence company Anthropic PBC has been looking for an underwriter bank for its highly anticipated IPO.
Earlier, Bank of America CEO Moynihan said that transaction revenue would be “basically flat” compared to the third quarter of last year, unexpectedly breaking the surge seen by Wall Street in the first half of the year.
Moynihan said on Monday that investment bank fee revenue is expected to be between 1.6 billion and 1.8 billion US dollars. Analysts had expected these expenses to be closer to $2 billion.
After Moynihan made the above remarks, Bank of America's stock price plummeted 6% intraday on Monday, the biggest intraday decline since April last year. The stock ended up falling 5.1%, the worst performing component of the KBW Bank Index.
In an interview, Moynihan said that at Bank of America, stock trading revenue has risen so far this quarter, while the fixed income business has declined and fluctuated repeatedly within the range. This is expected to keep total transaction revenue flat for the quarter, he said.
Analysts at Keefe, Bruyette & Woods said in a report that part of the decline in financing operations was due to a slowdown in the balance of major international and Asian brokers.
The Federal Reserve will meet later this week on the benchmark interest rate. Moynihan said the decision should help bring some stability.
He said, “Interest rates will eventually stabilize at some point, and I think this will help some trading activities,” “but on the debt financing side — this is a large part of business activity — the problem is that you need an interest rate structure that doesn't fluctuate back and forth, so people can confidently promise issuance.”
Wall Street traders are continuing their impressive performance at the beginning of the year, and Bank of America stock traders recorded record revenue in the second quarter.
The market continued to fluctuate, and AI stocks were sold off in July. Recently, chipmaker stocks declined as AI executives proposed to slow their development.
Moynihan said that despite this, Bank of America's market business is likely to remain strong this year. The bank's sales and trading team is striving to achieve the 17th consecutive quarter of growth.
NII growth
Regarding the bank's transaction matching business, Moynihan said that in industries where merger and acquisition activities have been more active in recent months, the positioning of this business is not that favorable. However, he said that trading reserves are still strong; it is only necessary to push the transaction through the process.
Wells Fargo analyst Mike Mayo said in a report that Moynihan said this was more about business structure than execution ability. This statement “continues the narrative that Bank of America's performance is lower than that of its peers in the capital market.”
Moynihan said on Monday that he feels “very good” about the company's net interest income (NII, the bank's income after deducting expenses from interest-bearing assets). The company has stated that it expects the NII growth rate to be in the upper end of the 6% to 8% range in 2026.