J.P. Morgan (JPM) +3.56% , the first of the large U.S. banks reporting third-quarter results, is scheduled to release its latest earnings before the opening bell on Thursday.
Equities trading, which accounts for roughly one-tenth of J.P. Morgan’s revenue, slumped in the third quarter. Even with unusually high trading volumes in August, enough investors had sidelined their money over the summer to cut into trading fees at investment banks following Standard & Poor’s downgrade of the United States’ national debt, the U.S. debt-ceiling debate, and continued worries over Europe’s sovereign debt problems.
In a research note, Matthew Burnell at Wells Fargo called it a “perfect storm” of complications in the capital markets.
“Equity prices fell in both the U.S. and internationally, debt spreads widened across most products, ‘risk-off’ trades were investors’ focus, and investment banking underwriting and M&A volumes dropped in August and September due to market volatility,” Burnell wrote.
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