With midterm elections that will determine which political party controls Congress drawing ever closer, American companies are reporting ongoing financial benefits from President Trump's economic policies.
Large lenders from JPMorgan Chase to Wells Fargo and Citibank all announced their third-quarter earnings this week, providing one of the few remaining windows before voting concludes into how businesses have fared during the Trump administration's first two years.
The following is a look at this week's numbers:
JPMorgan Chase: The largest U.S. lender beat Wall Street expectations as higher interest rates help combat a slowdown in bond trading.
Companywide, revenue rose 5 percent to $27.8 billion, supported by a 7 percent increase in interest income. Profits of $2.34 a share were higher than the $2.26 average estimate from analysts surveyed by FactSet. In response to Trump's comments that the Fed has "gone crazy" with interest-rate increases, potentially slowing the economy, Chief Executive Officer Jamie Dimon told reporters he's "never seen a president who wanted interest rates to go up." The economy remains very strong, "and that’s of course wages, job creation, capital expenditures and consumer credit,” Dimon said. Such trends will keep driving interest rates higher, he said, though a variety of geopolitical risks from trade disputes to Britain’s exit from the European Union have the potential to curb growth over the long term. Still, U.S. economic strength is "pretty broad-based, and it’s not going to be diminished immediately," Dimon told reporters. The stock fell slightly Friday, to $106.95 in New York trading. Full story here.
Wells Fargo: The embattled bank is trying to revamp its image after a series of scandals and subsequent congressional attention forced out its prior chief executive officer. Despite the efforts of new CEO Tim Sloan to shift more customers to digital services, Wells Fargo posted lower profits than expected. Net income rose 33 percent to $6 billion in the three months through September, as revenue climbed to $21.9 billion. Its earnings of $1.13 a share came in below the $1.19 average estimate from analysts surveyed by FactSet. The company is "hopeful" there will be no new scandals, and Sloan attempted to assure investors the bank would "not only meet but exceed regulatory expectations."
While momentum appears to be shifting toward Republicans retaining control of the Senate, Democratic lawmakers like Sen. Elizabeth Warren of Massachusetts are already pressing for Sloan to appear in front of the chamber's banking panel. The stock rose 1.34 percent to $52.11 per share in New York trading on Friday. Full story here.
Citigroup: The Republican-led tax cuts helped fueled profits at the bank, and it's "firmly on track to deliver on our full-year 2018 financial targets," according to Chief Executive Officer Michael Corbat. Net income grew to $4.6 billion, buoyed by a 7 percent drop in the the New York-based lender's effective tax rate to 24 percent. Revenue stayed flat at $18.4 billion, lower than what analysts had expected. The stock rose 2.1 percent to $69.84 at the close of New York trading on Friday. Full story here.
Delta: Rising fuel prices stemming from Trump's withdrawal from the Iran nuclear accord are adding billions of dollars in costs for U.S. airlines. But despite the jump in fuel expenses for Atlanta-based Delta, increased sales of premium tickets and growing cargo revenue helped propel earnings higher. Delta instituted a number of changes over the past few months to help blunt the impact of higher fuel costs, including a reduced flight schedule and higher checked-baggage fees. The stock rose 1.1 percent to $52.05 in New York trading on Friday. Full story here.
Look ahead
More companies are scheduled to report earnings next week, including: Bank of America, UnitedHealth Group, Netflix, Morgan Stanley, and Novartis.