Financial Giants Kick Off Earnings Season with a Bang!

Plus: JPMorgan’s Record Profit, Consumer Sentiment Dips, Cheetos Signal Economic Trouble, and Restaurants Bet on Robots ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Financial Giants Kick Off Earnings Season with a Bang!]( Plus: JPMorgan’s Record Profit, Consumer Sentiment Dips, Cheetos Signal Economic Trouble, and Restaurants Bet on Robots [Josh Belanger](joshbelanger) Jul 12 joshbelanger   [READ IN APP](   TGIF! Earnings season is here! 🎉 JPMorgan, Citi, and Wells Fargo just dropped their numbers. Investors are taking a half-glass-full approach, shrugging off a dip in net interest income and cheering for gains in investment banking and a loan profit rebound. JPMorgan's Profit Party Image generated by AI. Big Win: JPMorgan Chase hits a record profit! Investment banking fees soar by 50%, and equity trading revenue jumps 21%. A sweet $7.9 billion boost from a Visa share exchange helps, too. Why it matters: More companies are making deals, boosting investment banking even with high borrowing costs and global uncertainties. Dimon's Warning: CEO Jamie Dimon says inflation and interest rates might stay high because of big fiscal deficits and global trade changes. By the numbers: JPMorgan's net income for Q2 is $18.1 billion, up 25% from last year. Net interest income rose 4% to $22.7 billion but missed estimates. The bank's highest loan loss provision since early pandemic days also hit results. Zoom out: Despite the record profit, JPMorgan shares dropped 1.7%. Wells Fargo and Citigroup also saw shares fall by 6.4% and 2.4%. Looking ahead: JPMorgan expects to earn $91 billion in net interest income this year, adjusting for slower rate cuts by the Federal Reserve. Consumer Sentiment Sinks Image generated by AI. Big drop: Consumer sentiment fell to 66 in July, the lowest in eight months. High prices worry Americans about their finances and the economy. Why it matters: High prices keep consumers concerned, despite expecting inflation to ease. Inflation expectations: Inflation is expected to be 2.9% next year, down for the second month. Long-term inflation expectations also fell to 2.9%. Voice of the people: “Consumers are frustrated by persistent high prices,” said Joanne Hsu, survey director. Almost half say high prices hurt their living standards. Special report: A small group of consumers skewed long-term inflation expectations. This doesn't reflect a major shift in overall expectations. Economic data: June's inflation cooled, making a case for the Federal Reserve to cut interest rates soon. However, wholesale inflation rose unexpectedly. Relief in sight?: Goods prices have mostly dropped over the past year, easing some pressure. But the labor market is cooling, with unemployment at 4.1% in June. Election impact: The upcoming election adds to economic uncertainty, affecting consumer expectations. Both current conditions and future outlook hit new lows since late 2022. Chester Cheetah Waves Red Flag for the Economy Image generated by AI. Big warning: Chester Cheetah’s bosses at PepsiCo and Conagra Brands reported weak results, signaling U.S. consumers are struggling. Pepsi's Frito-Lay sales fell 4%, and beverage sales dropped 3%. Why it matters: Higher prices and inflation are squeezing household budgets. Consumers are spending more carefully. Details: Pepsi's revenue dipped slightly for Frito-Lay but rose 1% for beverages. The company lowered its sales growth outlook from “at least” 4% to “approximately” 4%. Voice of the people: Pepsi's managers note, “Consumers have become more value-conscious with their spending.” Conagra’s Strategy: Conagra cut prices to attract shoppers. Organic sales dropped 2.4%, but snack sales saw slight improvement. CEO Sean Connolly says volume growth will be slow, even with promotions. Consumer Behavior: Both low and high-income consumers are spending less. Helen of Troy also reported that consumers prioritize essentials over discretionary items, causing its shares to fall sharply. Stock Impact: Pepsi shares rose 0.2%, Conagra fell 1.5%. Both stocks have dropped over the last year, while the S&P 500 is up 27%. The bottom line: If consumer struggles continue, maintaining market performance will be tough. Robots Replacing Humans in Fast Food Image generated by AI. Big Change: Robots are entering restaurant kitchens. Kernel, a startup by Chipotle’s founder, uses robots to flip burgers and move dishes. Why it matters: With rising labor costs, restaurants are turning to automation to boost productivity. Details: Kernel temporarily closed to add warmer colors and seating to make it clear it’s a restaurant. The robotic arm helps with cooking, while humans finish and package the meals. Industry Trend: Chains like Chipotle and Sweetgreen are testing robots for tasks like making chips and peeling avocados. Automation is seen as the next big shift in the restaurant industry. Challenges: Automating kitchens is tough because food requires more dexterity than most robots have. However, rising labor costs are pushing more restaurants to adopt automation. Expert Insight: Sharon Zackfia from William Blair Equity Research says automation in restaurants will grow, similar to the rise of online ordering. Examples: Sweetgreen’s robots mix salads, and Chipotle is testing a robot to prepare avocados. Miso Robotics’ “Flippy” now cooks fries at White Castle and Jack in the Box. Looking Ahead: The restaurant industry is slowly adopting robots, but it will take time for widespread implementation. Unions are concerned about job losses due to automation. Quick Sizzles: - Insurers Strong-Arm States for Massive Rate Hikes: States are bowing to home insurers, allowing huge rate hikes and slashing consumer protections. Critics say insurers are using threats to get what they want. - Junk Bonds Abandoned as Bankruptcies Skyrocket: Investors are fleeing risky junk bonds amid a surge in bankruptcies. High interest rates are squeezing weaker companies, pushing traders to safer options. - Central Banks Sound the Alarm on Debt Crisis: Central bank managers warn of dangerous government debt levels. Global debt hits a record $91.4 trillion, sparking fears of economic meltdown. - Leveraged Loans Roar Back to Life: Risky corporate loans are drawing investors with high yields. Inflows surge, showing renewed confidence despite high interest rates. - China's One-Child Policy Backfires Big Time: China's population is shrinking fast due to its one-child policy. The U.N. predicts the population will halve by the century's end, threatening economic growth. - Pfizer Jumps into the Weight-Loss Drug Battle: Pfizer plans to test a daily weight-loss pill, taking on the $130 billion market. The drug aims to rival popular treatments in the booming obesity sector. You’re currently a free subscriber. Upgrade for the full experience and receive exclusive special reports like "How to Get Rich in The Stock Market" and "Congress' Secret Stock Playbook: The Top 5 Power Picks Revealed”. [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2024 Josh Belanger 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()