Q3 Earnings Converge With Macro & Monetary Uncertainties
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Overview: Q3 earnings kicked off this week, with JP Morgan, BofA, Goldman Sachs, and other large banks reporting record profits. This all comes at the convergence of macroeconomic uncertainty, centered around week 3 of the government shutdown set to begin next week, inconsistent rhetoric around rate cuts (cuts are expected to be between 25 and 50 basis points), and inadequate government data leading to insufficient payroll and inflation data.
Source: TradingView - A depiction of JP Morgan’s Year-To-Date (YTD) chart for 2025 as of 10/16/2025 after its Q3 earnings. As can be seen, it’s strong Q3 earnings were offset by CEO Jamie Dimon’s guidance of “cracks” and “cockroaches” indicating unchecked levels of credit spending in AI/banking.
JPMC Earnings Summary: JPMorgan Chase reported strong third-quarter 2025 results, generating net income of $14.4 billion ($5.07 per share), which represents a 12% increase compared to the prior-year quarter. The Firm delivered a Return on Tangible Common Equity (ROTCE) of 20%. Managed revenue reached $47.1 billion, up 9% year-over-year (YoY), driven significantly by noninterest revenue, which rose 16%. Noninterest expense increased by 8% to $24.3 billion, predominantly due to higher compensation, brokerage expense, auto lease depreciation, and marketing. The provision for credit losses totaled $3.4 billion, consisting of $2.6 billion in net charge-offs and an $810 million net reserve build.
All lines of business performed well in the quarter. The Commercial & Investment Bank (CIB) posted a 21% rise in net income, benefiting from a 16% increase in Investment Banking fees and Markets revenue growth of 25%. Consumer & Community Banking (CCB) net income grew 24%, supported by Card Services & Auto revenue increasing 12%, and the Firm continued to acquire new accounts at a robust pace. Asset & Wealth Management (AWM) saw net income increase 23%, with Assets under Management (AUM) growing 18% YoY to $4.6 trillion. Regarding the outlook or guidance, CEO Jamie Dimon observed that the U.S. economy generally remained resilient, despite some signs of softening, particularly in job growth. However, the Firm noted a heightened degree of uncertainty stemming from complex geopolitical conditions, tariffs, elevated asset prices, and the risk of sticky inflation, which reinforces the necessity for the Firm to prepare for a wide range of scenarios.
Summary Statistics: JP Morgan & Chase Company Earnings Report
What This Means - Q3 Earnings Outlook: While consumer sentiment continues to lower and GDP growth outside data centers remains nonexistent at best, JPMC and other banks’ earnings suggest that commercial sentiment remains bullish, and enterprise spending optimistic. While OpenAI’s circular deals with Nvidia, Microsoft, AMD, and Broadcom are a cause for AI-bubble related concern, there doesn’t seem to be any slowdown in revenue growth in the near-term as companies trim workforce size and optimize productivity.
Salesforce’s announcement of $60 billion revenue projections by 2030 after its deals with Anthropic and OpenAI showcase the emergence of the next phase of AI, beyond GPT-wrappers to true agent-to-agent communication.
Opinion: Q3 earnings seem to be overall optimistic despite consumer and macroeconomic concerns surrounding trade and tariffs. The highest earners in the US continue to spend heavily despite “cracks” beginning to emerge in low income groups, and enterprise spend doesn’t seem to be slowing down. While there may be an AI bubble collapse in early 2026 due to data center overspend, these concerns are not expected to derail earnings in Q3 (although significant ecosystem “doubts” may begin to emerge and spark short selling).
Sources:
Salesforce Partnership Report: https://www.cnbc.com/2025/10/15/salesforce-stock-jumps-after-company-offers-rosy-forecast-for-2030.html
