JP Morgan Chase (JPM) at Deutsche Bank Conference

Marianne Lake – CFO

Don´t give up on reforms

“…we still remain very hopeful that there will be policy and reform on the agenda. I think it’s hard because everybody was super enthusiastic out of the gate, but the reality is all of these things is they’re extraordinarily hard and there are reasons why tax reform hasn’t been successful over the course of the last several decades…I don’t think it’s time to give up the belief….there’s significant reasons to be optimistic and in any case, as we’ve said many times before, just pausing in and of itself is a positive thing.”

But the status quo remains for now

“The flipside to that…is that nothing has actually changed and so when we come into work every day right now, we still need to work hard to comply with the rules as they currently stand to uplift our environment to the degree that we’ve been asked to do that, to continue to get ready to comply with rules that will be coming down the pipe, and so we can’t sort of take our foot off the pedal or eye off the ball in that sense. So in that sense, it’s sort of hurry up and wait.”

Optimism has faded a bit

“The levels of optimism are still high, they’re still higher than pre-election. They may be off slightly from their peak, but I think generally people are still feeling that the pro-growth agenda is real. How exactly it ends up being manifested in reform and policy action over the course of the next six, 12 months is still an unknown.”

A subdued trading environment

“I would say as a sweeping generalization, but it’s pretty broadly true, low rates, a more cautious outlook on rates, low volatility with very small bouts of increased volatility but then returning back to low levels, have led to low client flow and a generally quite subdued and challenging trading environment for the flow businesses.”

Q2 revenues likely to be down

“I will tell you that quarter to date across our markets businesses, we are down about 15% year-on-year. That’s pretty normal seasonal declines in the first quarter and second quarter…That’s fixed income down more and equities up slightly, and as I look to June, I would say I don’t see any particular reason for that to change, particularly given the strength of our June last year.”

Consumers in good shape

“…consumers are in very good shape. Their balance sheets are repaired, they’re pretty liquid, their debt to income ratios are pretty low, debt service burdens are pretty well insulated from interest rate hikes because interest rates have been low forever, and they’ve been able to refi debt at–term out at low rates….So generally speaking, consumers feel very well insulated from rate hikes, particularly if they’re gradual….the central case is gradual improvement in rates or normalization of rates, consumers are able to in large part withstand that very well. “