JPMorgan's Petno sees bank fees surging while warning the cycle feels 'too good'

JPMorgan Chase (JPM) shares rose 1% after the bank forecasted mid-to-high teens revenue growth for Q3 investment banking and markets, despite a seasonal decline from Q2. Co-President Doug Petno cited strong pipelines and broad-based strength. This contrasts with Bank of America's flat trading revenue outlook.

Shares of major U.S. banks fell Tuesday after Bank of America's CEO projected lower-than-expected third-quarter investment banking fees ($1.6B-$1.8B) and flat sales and trading revenue. Analysts had anticipated $2.04B in fees. Goldman Sachs, JPMorgan Chase, Bank of America, Morgan Stanley, and Citigroup all declined. The S&P 500 Banks index dropped 0.7%.

JPMorgan will launch the GBI-EM Edge index, tracking $330B in local-currency government bonds from 26 frontier markets, including Bangladesh. Bangladesh's bonds will have an 8% weighting. The index aims to increase visibility for these markets among global investors, potentially boosting foreign participation in Bangladesh's bond market. The index has a nominal yield of 10.4%, higher than JPMorgan's emerging-market bond index.

Bank of America (BAC) CEO Brian Moynihan warned of a 10%+ decline in Q3 investment banking fees to $1.6B–$1.8B, down from $2B in Q3 2025, and flat sales and trading revenue versus $5.4B last year. BAC shares fell 5.14% to $59.47, dragging the S&P 500 Banks Index down 2.7%. Jefferies data showed IB proxy revenue for eight major global banks down 15% YoY and 27% from Q2. Other banks like Goldman Sachs (GS), JPMorgan (JPM), and Morgan Stanley (MS) also saw declines, while Royal Bank of Canada repor

Bank of America (BAC) shares fell 5% after CEO Brian Moynihan forecasted a 10%-20% decline in Q3 investment banking fees to $1.6B-$1.8B, down from $2B last year. Sales and trading revenue is expected to be flat. Other banks like Goldman Sachs (GS) and Morgan Stanley (MS) also saw declines. Citigroup (C) reported a stronger outlook with mid-single-digit market revenue growth.

Gabe Menendez joined JPMorgan as a managing director and head of liability management, a restructuring-related role in debt capital markets. He previously held similar roles at UBS and Credit Suisse. Liability management involves buying back or restructuring a client's debt, often due to economic changes or refinancing needs. JPMorgan declined to comment.