JPMorgan Expects Double-Digit Growth in Q3 Investment Banking and Trading Revenue
nashnova research
JPMorgan co-president Doug Petno said Q3 trading and investment-banking fee revenue will each grow in the mid-to-high teens year-on-year — a stark contrast to Bank of America's warning of flat trading revenue, splitting the market's read on the banking sector.
What exactly did JPMorgan signal?
Co-president Doug Petno told a Barclays industry conference that trading revenue for the quarter ending September 30 will rise in the mid-to-high teens percentage points year-on-year.
Investment-banking fees are expected to grow by a similar margin. This means → both M&A advisory and underwriting are recovering together, not a single-line story.
In plain terms = JPMorgan is telling the market: our two biggest money-makers are both running hot this quarter.
Why did the market react so sharply?
Just one day earlier, Bank of America's CEO warned that its Q3 trading revenue would be "roughly flat" versus last year — a comment that dragged bank stocks broadly lower.
JPMorgan's guidance pointed the other way. After Petno spoke, JPMorgan shares rose as much as 0.9%, erasing an early-session decline.
This means → in the same quarter and the same industry, two top banks issued opposite signals. The market must now price each name individually; sector-wide momentum trades are breaking down.
What does this divergence mean for investors?
This reflects a deepening winner-take-all dynamic in investment banking: top-tier deal flow is concentrating at JPMorgan, and second-tier peers may not ride the same wave.
In plain terms = you cannot simply say "investment banking is back, buy bank stocks." *Whose* investment bank is back — that is the real question.
Watch for Q3 guidance from Goldman Sachs, Citigroup, and other peers to determine whether this is a JPMorgan-specific story or a broader industry recovery.
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