Stocks rise as big bank profits roll in

I just got back from an earnings press conference with JPMorgan (JPM) CFO Jeremy Barnum (thanks to Yahoo Finance banking reporter David Hollerith for getting his question in front of me).

Here is our exchange:

I: This week we’ve had cautious results from various consumer companies, like PepsiCo (PEP), which are urging caution from consumers. Are you seeing anything in your debit or credit data that suggests consumers are pulling back, whether due to inflation or election concerns?

Barnum: The short answer is no. So we’ve made some of these points over time, but I’ll repeat them here. So our overall view is that consumer spending in real terms is pretty flat. So I see a spike in spending, but we don’t see, you know, any significant weakness. And like with this data, you can always take a magnifying glass and try to dig a little deeper, and one of the things that we’ve seen a little bit in the spending patterns in the lower-income segments, you’re starting to see a little bit of evidence, some rotation of spending out of discretionary and nondiscretionary, which traditionally, for obvious reasons, … is understood as a little bit of a sign of weakness.

But in a world where the unemployment rate is 4.1% and GDP growth is slowing down a little bit, the data that we’re seeing on the consumer side is completely consistent with that economic environment. And the overall background picture, whether it’s spending, whether it’s charges, whether it’s delinquency rates, cash buffers, etc., is still consistent with a pretty healthy consumer. You know, that’s not a problem at this point.

Note: JPMorgan CEO Jamie Dimon, interestingly, was absent from the call as is customary. We were told it was due to a travel conflict, as he was flying back from an event in Germany. There’s nothing more to it than that, Barnum said in response to a reporter’s question about Dimon’s absence.