JPMorgan CRASHES 7% After Rival Firm Issues Shocking Warning—Thanks, Tariffs…

JPMorgan Chase just found out what happens when Wall Street meets White House fanfiction. The stock dropped over 7% on Friday after Truist Securities slapped a downgrade-lite on the nation’s largest bank, trimming its price target from $268 to $264. That’s a $4 haircut, which normally wouldn’t scare anyone—but this time, it wasn’t about JPMorgan itself. It was about the homeboy Trump. 

(Source: Giphy) 

As I’m sure you’re well aware by now, Donnie Politics just announced a full-blown tariff war like it’s 2018 and we’re all still pretending supply chains are made of rubber bands and vibes. This week, he rolled out a new batch of economic chaos: 25% tariffs on auto imports and a minimum 10% tax on basically everything not nailed down. China, of course, got the not-so-happy-ending-treatment—54% total duties after the new 34% stacks on top of the old 20%.

For this reason, Truist, in a note that read less like analysis and more like a Dear John letter to the U.S. economy, said the tariffs just nuked their already weak estimates. They’d been expecting a 2% to 4% earnings downgrade. Now they’re saying, “Actually, let’s make that worse.” The reason is none other than a classic recession cocktail: slower growth, higher interest rates, and rising loan-loss provisions. Salt bae in a little geopolitical instability and a Fed that’s boxed in, and you’ve got the makings of a banking bloodbath with JPMorgan taking the brunt of it. 

(Source: StockTwits) 

With that said though, JPMorgan wasn’t alone in the sell-off. Citigroup dropped 9%. Goldman Sachs and Morgan Stanley each fell over 6%.Yet, the irony of it all? JPMorgan literally downgraded Truist just a week ago, cutting their target from $48 to $42. So now Truist is cutting JPMorgan, which may or may not include a little “revenge downgrade” energy. Petty, much? Maybe, but regardless, if these two analyst teams met in a dark alley behind the NYSE, I wouldn’t be shocked.

But, but, but… here’s the real problem with this. It’s not just a pissing-match between analysts. This is about the Fed, inflation, and the fact that you can’t keep slamming tariffs on an interconnected global economy without sh*t breaking. JPMorgan, in a client note, said the odds of a global recession have jumped to 60%. That’s up from 40% earlier this year, and honestly, still feels conservative.

(Source: Defense World) 

The bank even came out and said it: “Disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year.” Translation: it’s not China, it’s not the Fed, it’s not inflation—it’s us. We are the problem. Now, are they right in their thinking? Yes and no. 

You see, it’s important for all of us to not dismiss the fact that bond yields are absolutely dropping like a friggin’ rock during the very same year the United States is scheduled to refinance $9.2 trillion in debt. So yes, the market is a dumpster fire right now, but Trump is a businessman that may or may not be smarter than all of us—and the fact that yields are nose diving—well, this all may be a part of a larger plan to solve the refinancing problem. (Another story for another time). 

(Source: Giphy) 

Back to JPMorgan, a.k.a. Jamie Dimon’s house we’re talking about here. The bank made it through 2008 with a smirk. But even they can’t spin their way out of a trade war-induced earnings drag. Tariffs jack up costs, crush demand, and force the Fed to stay in a holding pattern, all while loan defaults start creeping up like unpaid Affirm bills.Now, could this all blow over? Sure (and if anything I said above actually works out, it 100% will, with our economy being better off). However, in the short-term, the banks are going to feel it first, and the hardest. So yeah, JPMorgan’s down 12% YTD. But zoom out and it’s still up 6% over the last twelve months. 

Either way, if you’re holding JPM thinking it’s a safe haven, you might want to check the headlines, and definitely place your bets accordingly. As always, stay safe and stay frosty, friends! Until next time…

P.S. This week has been absolutely horrific. Portfolios are down and emotions are high. But do you know who's been slaying the week while everyone else is panic-selling? Stocks.News premium members. Click here to join the club, and get the deepest insights and most explosive moves BEFORE everyone else. 

Stocks.News does not hold positions in companies mentioned in the article.