As the latest sign that the country’s economic recovery could be in jeopardy, California, the largest state in the United States, was nearly closed on Monday as officials tried to avert a coronavirus resurgence. Governor Gavin Newsom shut down indoor activities across the state amid a surge in cases as counties began reopening in recent weeks.
Other states such as Texas, Florida, and Arizona, which began reopening, have also emerged as new epicentres for the virus.
“This is not a normal recession,” said Jamie Dimon, CEO of JPMorgan, referring to government aid programs that have helped increase consumer incomes and savings, as well as home prices. “The recessive part of it you will see on the street.”
However, the bank was backed by a record quarter for its bond trading division, which raised $ 7.3 billion and doubled its revenue from the same period last year. This is because the Federal Reserve has strengthened corporate bond markets, which has resulted in a spate of bond sales in recent months.
JPMorgan’s equity division also grew, posting sales of $ 2.4 billion, up 38 percent.
Citigroup, which also released its quarterly update to investors Tuesday, announced a profit of $ 1.3 billion, down 73 percent from the same period last year after reserving $ 7.9 billion for potential loan losses.
Wells Fargo reported a net loss of $ 2.4 billion, the first decline in over a decade. It added $ 8.4 billion to its reserves in preparation for potential credit losses. The bank has cut its dividend to 10 cents per share.
“We are extremely disappointed with both our second quarter results and our intention to reduce our dividend,” said CEO Charlie Scharf in a press release. “Our assessment of the duration and severity of the economic downturn has deteriorated considerably compared to the assumptions made in the previous quarter.”
In an interview with investors, Scharf admitted that the Federal Reserve’s cap on the bank’s growth after uncovering a number of consumer scandals had reduced the bank’s earnings potential.
Still, he said, “We are responsible for the position we are in,” based on past behavior, adding that the company’s executives had not previously “made the tough decisions” to keep Wells on a sustainable long-term basis Bring away.