JPMorgan Chase topped analyst estimates with earnings of $1.35 a share and revenue of more than $24 billion, but the investment bank's triumph over lower expectations shouldn't necessarily be viewed as positive news for Wall Street.
Every Wall Street bank saw reduced first quarter expectations to begin the year, in part thanks to a rocky start to 2016 on mergers and acquisitions and credit markets. But JPMorgan, which saw shares rise by more than 3 percent at the open Wednesday, could be an outlier for the banking sector and not a leading indicator.
The firm's investment banking division is better fortified from the deal downturn that began 2016, and trading losses and energy provisions were not as bad as Wall Street feared in February, when bank stocks were hammered by sliding oil prices. It remains to be seen if other banks can say the same.
"Earnings were certainly impacted by a slow start to the year in investment banking and markets," said Meghan Neenan, senior director for financial institutions at Fitch Ratings. "But other segments helped to partially offset that pressure, benefiting from loan growth and increased expense efficiencies."