Bond Market News

US banks kicked-off the earnings season with strong results from JPMorgan and Goldman Sachs on Tuesday:

• JPMorgan reported a net income of $11.9bn in Q2, up over 2.5x YoY from $4.7bn a year earlier. Both EPS and revenues also beat expectations coming in at $3.78/share and $30.5bn. Profits were boosted by a net credit cost of $2.3bn as there was a $3bn release in loan-loss reserves and $734mn in net charge-offs. In Q1, JPMorgan saw a reserve release of $5.2bn. Markets revenue fell 30% YoY, with fixed income producing $4.1bn in revenues, down 44% and equities $2.7bn, up 13%. The group’s CET1 ratio stood at 13% vs. 12.4% in 2Q2020.

JPMorgan’s bonds were stable –  its 4% Perp was at 101.7, yielding 3.5%.

• Goldman reported a net income of $5.5bn, up over 14.7x YoY from $373mn a year ago. Both EPS and revenues also beat estimates at $15.02/share and $15.4bn. Provision for credit losses was a net benefit of $92mn in the quarter compared with net provision charge-offs of $1.59bn for 2Q2020. Investment banking posted its second-highest revenue quarter ever at $3.6bn with the highest ever recorded in the previous quarter at $3.8bn. Trading revenues slowed down with net revenues of $4.9bn, compared to $7.6bn in Q1 with $2.3bn in fixed income, down 45% and $2.6bn in equities, down 12%.

Goldman’s bonds were stable – its 3.8% Perp was at 102.2, yielding 3.3%

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