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JPMorgan’s rare miss opens mixed Q3 for big banks
JPMorgan posted its first profit shortfall in nearly three years while Goldman Sachs crushed estimates on equities trading, as Wells Fargo and Citigroup delivered split results to start bank earnings season.
JPMorgan profit shortfall: Reported profit rose 6% to $15.3 billion or $5.57 a share, missing roughly $5.90 expectations, after $658 million in securities losses; revenue climbed 8% to $50.2 billion as the bank raised net interest income guidance excluding markets to $97.5 billion.
Goldman equities surge: Net earnings of $5.29 billion or $17.01 a share beat the $13.50 forecast, with revenue up 23% to $18.7 billion; equities trading revenue jumped 72% to $6.44 billion while fixed income, currencies and commodities slipped 1% to $3.47 billion.
Wells and Citi split: Wells Fargo earned $1.87 a share, beating $1.85, on $21.87 billion revenue that missed, with provisions of $1 billion better than expected; Citigroup reported $2.85 a share and $23.85 billion revenue, its strongest third-quarter revenue in a decade.
Dimon risk warning: Jamie Dimon said large fiscal deficits, sticky inflation, elevated asset prices, rising rates and geopolitical conditions “continue to shift under the surface,” adding the forces “may be manageable” but the bank remains prepared for a wide range of outcomes.
IMF sees 3.1% growth as AI offsets war risks
The IMF raised its 2026 global growth forecast to 3.1% from 3.0% in July, with AI investment helping offset the Middle East war, but warned resilience is nearing limits and growth is fracturing.
Growth and inflation: Global growth is projected at 3.1% in 2026, down from 3.5% in 2025, then 3.4% in 2027; headline inflation is seen rising to 4.7% this year before easing to 4.1% in 2027, driven by energy costs and the AI boom.
Hormuz and AI offsets: The baseline assumes the Strait of Hormuz reopens in March 2027 with conditions returning to pre-war levels by October 2027; AI demand provides a near-term impulse but adds inflationary pressure and financial fragility.
Fractured outlook: Just 32 economies now account for 95% of global growth, down from 54 in April, with energy importers outside the tech chain facing the toughest conditions and Gulf forecasts downgraded sharply.
Yield and debt risks: The Fund warned government bond yields could spike in a disorderly fashion amid record public debt near post-World War II highs, hedge-fund positions and more frequent fiscal and inflation shocks.
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Oil slips on Trump’s Russian diesel deal as OPEC cuts demand
Crude prices fell as prospects of more Russian diesel on world markets outweighed Gulf supply fears, while OPEC trimmed its 2026 demand-growth forecast to 180,000 barrels a day from 380,000.
Price moves: Brent crude futures declined 1.3% to $105.24 a barrel and West Texas Intermediate fell 0.9% to $92.90 as traders weighed increased Russian supplies against Houthi attacks on Saudi infrastructure.
OPEC demand cut: OPEC lowered this year’s global oil-demand growth projection to 180,000 barrels a day from 380,000 amid escalating Gulf shipping risks and Houthi strikes, while raising next year’s forecast to 2.55 million barrels a day from 2.36 million to rebuild inventories.
Russian diesel prospect: Goldman Sachs estimated that an additional 800,000 metric tons of Russian diesel could lower U.S. Gulf Coast and European wholesale diesel prices by $1 to $2 a barrel, though refinery outages limit the overall relief.
Gulf risks persist: Iran-backed Houthi militants attacked King Khalid International Airport in Riyadh over the weekend, causing 12 deaths and more than 300 injuries, keeping supply-disruption concerns elevated.
BlackRock turns to Treasurys after six years of avoidance
BlackRock Investment Institute downgraded U.S. equities to neutral and upgraded short-term Treasurys to overweight for the first time in six years, citing AI volatility and attractive yields.
Portfolio shift: The institute closed a long-held U.S. equity overweight, moving to neutral to manage potential volatility around the AI buildout, while ending a Treasury underweight held for most of the past six years since October 2020.
Short-end preference: Shorter-term Treasurys were raised to overweight and longer-dated notes to neutral, with researchers arguing markets have overpriced further Fed tightening and higher yields now provide better compensation for rate risk.
Yield backdrop: The 10-year Treasury yield has climbed roughly 110 basis points this year to around 5.25%, near multi-decade highs, after moving above 5.3% during recent selloffs before easing on strong auctions.
AI conviction intact: Core views on AI transformation remain unchanged, with continued preference for AI-related companies, listed infrastructure and emerging-market equities even as near-term equity risk is trimmed.
UnitedHealth raises outlook to $20.50 after earnings beat
UnitedHealth topped third-quarter estimates and lifted its 2026 adjusted profit forecast to at least $20.50 a share from $19.50–$20.00 as medical cost trends improved, supporting the turnaround.
Earnings and revenue: Adjusted earnings reached $4.69 a share, beating the $4.14 estimate, on revenue of $112.7 billion that exceeded expectations; net income was $4.11 billion or $4.56 a share.
Medical cost ratio: The medical cost ratio improved to 88.4% from 89.9% a year earlier and better than the expected 89.9%, though costs remain elevated versus historical norms with inpatient and specialty pharmacy pressures.
Guidance raise: Full-year 2026 adjusted earnings are now seen at least at $20.50 a share, the third upward revision this year, incorporating experience through the third quarter.
Turnaround momentum: CFO Wayne DeVeydt cited ongoing management of high medical costs, with investments in value-based care and AI beginning to take hold, including lower acute hospital admissions and higher home-health use.
J&J raises guidance as it eyes orthopedics spinoff
Johnson & Johnson beat earnings estimates and raised full-year guidance as pharmaceutical strength offset weaker medical-device results, while management leans toward spinning off the orthopedics unit by mid-2027.
Sales and segments: Third-quarter sales rose 5.9% to $25.4 billion, above estimates, with pharmaceutical revenue up 7.7% to $16.76 billion and medtech up 2.5% to $8.6 billion, missing device expectations.
Guidance increase: The company lifted its full-year reported sales midpoint to about $101.2 billion and its adjusted earnings midpoint to $11.10 a share, reflecting strong operational performance.
Spinoff plans: CFO Joe Wolk said the company is targeting mid-2027 for separating DePuy Synthes and is leaning toward a spinoff rather than a sale, noting “we’re not cash strapped” and can wait for an optimal path.
Middle East drag: The regional conflict weighed on medtech sales as budgets in countries such as Kuwait, the UAE and Saudi Arabia shifted toward defense, though it has not yet affected costs.
Meta rises as “Muse Wonder” rivals OpenAI and Anthropic
Meta introduced Muse Wonder and Muse Wonder Full as its most capable models yet, with Zuckerberg saying they put the company at the AI frontier and Truist seeing roughly 35% further upside.
Model launch: Muse Wonder, available today via the Meta Model API and Muse Code, and Muse Wonder Full for code subscribers, feature Active Memory and Active Focus for agentic personal and professional tasks after a 14-month AI overhaul.
Frontier claims: The company said the models deliver state-of-the-art performance on complex tasks including coding, finance, law and health, with benchmark results comparable to leading systems from OpenAI and Anthropic.
Agent integration: Muse Wonder will soon power the Muse personal agent, rolling out first to subscribers, as part of the push toward personal superintelligence following the earlier Muse Spark release.
Analyst view: Truist said Meta still has about 35% upside even after the Muse-related rally, citing the model’s capabilities and continued growth potential in the AI agent space.
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