Episode summary
JPMorgan Investment-Banking Fees Drop on Underwriting Miss | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Scarlet Fu, Alexandra Semenova · Guests: Herman Chan, Anurag Rana, Travis Hess, George Ferguson
Summary
JPMorgan Chase posted a solid quarter overall, with strong markets trading revenue and healthy lending growth, but investment-banking fees were lighter and the firm reiterated a higher 2026 expense outlook, including about $9 billion in additional costs tied to growth, inflation and health care. The analyst said JPMorgan’s sharp warning on a proposed credit-card rate cap was meant to show that the policy could reduce credit availability and hurt banks, consumers and GDP growth.
The technology segment focused on Apple’s multiyear deal with Alphabet’s Google to power AI features, including Siri. The analyst argued Apple is effectively outsourcing foundational model work while still protecting privacy by running much of it on-device or in private cloud systems. He said the rumored price, about $1 billion a year, is small versus the cost of building frontier models in-house.
Commerce CEO Travis Hess said AI is changing shopping through “agentic commerce,” with Google’s universal commerce protocol and a shift from SEO to “GEO,” or generative optimization. Delta Air Lines also struck a cautious tone, with a 2026 forecast below Wall Street expectations even as premium and loyalty revenue remain strong and the carrier orders 30 Boeing 787 Dreamliner jets.
Key takeaways
- The analyst said JPMorgan’s 4Q investment-banking fees were “a little light,” but trading and lending strength made it a solid quarter overall.
- JPMorgan’s 2026 expense outlook rose by about $9 billion, driven by growth, inflation and health care costs.
- The analyst said a 10% credit-card rate cap could reduce credit availability and have “drastic repercussions” for banks and GDP growth.
- The analyst said Apple’s Google AI partnership lets Apple buy the best model instead of spending billions to build one in-house.
- Travis Hess said retail AI is shifting from SEO to GEO, with trust and security becoming the main concern for brands.
- George Ferguson said Delta’s premium and loyalty revenue are holding up, but the airline is cautious on 2026 and sees industry consolidation ahead.
Notable quotes
“the performance was strong. So we're talking about really strong markets trading revenue year-over-year”
“they're going to use the foundational models from Google, but they're going to run a lot of that either on the device or their own private private cloud data centers”
“the models are changing certainly the old model was um you're searching for terms”
“premium and the loyalty revenue are are rolling in strongly rolling in I think sort of 5 to 7%”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Herman Chan has a CFA.
He's also been monitoring the bank earnings and JP Morgan got us started today. Although the stock as John mentioned is off by 2 and a half% and banks are the worst performing group in the S&P 500. So Herman um big takeaway for JP Morgan's latest results.
Yeah, takeaways is that the the performance was strong. So we're talking about really strong markets trading revenue year-over-year. Uh investment bank again was a little light and then the the balance sheet lending uh growth was was really good.
So solid quarter all around. Um guidance was in line with what they had expected heading into the quarter, but a couple lingering things. Um higher expenses uh for 2026 as they continue to invest for growth.
We're talking about $9 billion increase in expenses and then the credit card cap is still lingering across JP Morgan and the large banks. Herman, since everyone's been talking about the proposed cap by President Trump on credit card fees, what was the messaging from JP Morgan on the impact of that?
Yeah. Uh the the messaging was that this would have drastic uh repercussions not only for JP Morgan, uh the banking industry, uh consumers and overall GDP growth. So you think of credit as being the lubricator for economic activity.
uh and when you slash u card rates uh that really will reduce the credit availability for for a lot of JP Morgan's customers. So you can think of a large swath of them just not having credit card usage going forward under a 10% rate cap.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- jpmorgan investment banking fees
- bank underwriting and advisory
- ai in consumer shopping
- alphabet apple siri partnership
- delta airline forecast and fleet capex
Companies and tickers mentioned
- JPM
- GOOGL
- GOOG
- AAPL
- DAL
- BA
- JPMorgan Chase & Co.
- Alphabet Inc.
- Apple Inc.
- Commerce
- Delta Air Lines, Inc.
- Boeing
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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