JPMorgan CEO Jamie Dimon Weighs In… And Trump Sounds Off On Walmart 5/19/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square this is fast money Here's what's on tap tonight. Jamie Dimon's big warning. The J.P. Morgan CEO suggesting dealmaking is still under pressure. What he had to say about M &A, the markets, and his retirement plans. And eat the tariffs. The president set by President Trump's demands on Walmart and the impact it could have on the entire retail space. Plus, UnitedHealth on the rebound after last week's rout. Netflix shrugs off a downgrade for one big Wall Street firm. And all the details from NVIDIA's Computex keynote. What its latest platform means for the next steps in AI.

0:35I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Karen Feinerman, Guy Adami, and Danny Moses, founder of Moses Ventures. We start off with the deal making warning that sent shares of JP Morgan sharply lower in early trade. CEO Jamie Dimon saying he expects investment banking revenues to decline in the second quarter as economic uncertainty persists. His word sending the stock down more than 2 % at the lows of the session. For more on what the banking exec had to say about the deal environment and the broader markets. Let's bring in Leslie Picker, who joins us here on set.

1:04Leslie. Hey, Mel. Yeah, that second quarter guidance revealing that investment banking would be down by mid-teens percent year over year, also sending shares lower among J.P. Morgan's peers like Goldman Sachs and Morgan Stanley. J.P. Morgan also said its markets division, comprising of sales and trading, expects growth in the mid to high single digits year over year. This comes after a blockbuster first quarter, though. But co-CEO of commercial investment bank, Troy Rohrbaugh, noting that the volatility has moderated and therefore potential returns have as well. Succession also in focus. Diamond saying it's up to the board as to whether he's CEO for more years and maybe two or three as executive chairman, while caveating that that timeline is, quote, a long time.

1:53Diamond fielding a lot of questions about the macro picture as well. He characterized the current geopolitical risk as being, quote, very, very, very high. Diamond said people feel good because they haven't seen the effective tariffs, calling the market roundtrip a, quote, extraordinary amount of complacency. He said, even with today's current rates, the tariffs are still, quote, pretty extreme. I think he made the point that 10 percent across four tariffs, that would still be the highest level since 1971. So we're talking about very high levels. Also, stagflation not off the table. He does tend to be conservative, though, in general, though.

2:30Yeah, he said stagflation was essentially part of their scenario planning. And it's one that he thinks is actually double as likely as the markets are expecting. He also noted credit being a particular point of concern there, noting that in a recession, those losses could be even bigger than what we're used to in recessions and saying that, you know, he would not personally be a buyer of credit right now. He thinks it's a really risky space. Yeah, I thought that was a particularly interesting comment that he really thought that credit spreads are nowhere near wide enough. But, you know, normally he tries to have this balance of being conservative, as you said, but also he's very rah-rah USA, right?

3:07American ingenuity and all of that. And he'd also talked about the market he thought was too high, that the 21 multiple is probably too high. But I'm surprised that with the capital markets, I would have thought liberation week, was one of the craziest weeks ever, maybe ever, in terms of, you know, volatility and volume. So there was a lot to like here, nothing wildly different than what you'd expect from him. I thought, though, the time frame of his tenure was a little longer than I was expecting, which I like that. Oh, really? Because before... Wouldn't you rather he's free, has frees up some time, possibly?

3:45That's an actual question. But I am long. Gotcha. Yeah. Well, that was kind of the question that was posed to Diamond at the investor day was basically like someone had looked at ChatGPT and they'd asked the computer, you know, what pop culture icon ChatGPT, you know, thought Jamie and Diamond reminded them of. And the computer spit out Iron Man and he said, Iron Man never retires. So why should you? Basically, that was kind of the feeling in the room. So I think Diamond was perhaps responding to that. But, yeah, I think there were several analyst notes that suggested that if he said anything shorter than, say, two or three years in terms of his tenure as CEO, that would be a negative for the stock.

4:27Anything more than that would be a positive for the stock. So we kind of didn't really get too much in the way of specifics, but it wasn't shorter. It's great to start the show with Leslie here on set with us. It's rare. This is fun. Number two, you know, blockchain is not as big a deal. It doesn't matter as much as you think. I mean, he's been a crypto skeptic. But thoughts on that comment? Yeah, that was his the first question out of the gate, which was a little surprising. You know, he's definitely not a crypto supporter. He's not a Bitcoin supporter. He said the firm would custody Bitcoin.

4:58He would you know, they would support crypto from that capacity. But he he kind of analogized it to, you know, like, I don't think you should smoke. But if you want to smoke, I'm not going to stop you. But they don't. You want to trade. You can't buy Bitcoin if you're a J.P. Morgan. He said they would right now. Custody crypto is kind of the plan for the future for the firm. I don't think he said anything that was shocking. He's always conservative. It is the one bank that touches Wall Street and also touches the consumer. So you get a little bit of everything. Did take up a little bit of credit loss assumptions potentially in 2026.

5:28That goes along with a slowing economy. I will say there was an executive that talked about the impact of AI. And we've talked about it. I know you guys have talked about it on the show. They expect potentially a 10 % workforce reduction. We think about all the things that banks do. That's one you can imagine a lot can be done by AI. So I thought that was interesting. Yeah, that was Marianne Lake talking. I think she was talking specifically about the operations element of CCB consumer banking, essentially, that they've been able to find a lot of efficiency with AI and their kind of back office, their ability to handle customer complaints and so forth, using agents to do that.

6:02Well, and in terms of analogies, I mean, Jamie Dimon has been, you know, very much the weatherman over the last couple of years. And he uses meteorological terms. And it was a beautiful spring day here in New York. Right, guys? I mean, you know, we would call these Yankee fans basking in the afterglow. And it's great that they can feel like that they want it in May and that it's a sunny day in May. But but again, it's it's the question is, is Jamie Dimon? was it a more important conversation for Jamie Dimon, excuse me, for JP Morgan, the stock or for the stock market? And I think this is kind of like a Berkshire event.

6:35In other words, it really is a pulse check both on the economy. In Jamie's case, he often thinks internationally. I mean, he he put a lot of caution just around international dynamics and geopolitics, which we've heard before. I think that's absolutely fair. My biggest takeaway is lower multiple for the for the S &P. I mean, that that's really if you boil it all down. What I heard is not I don't think we care that much that that J.P. Morgan's banking investment banking is down 15 percent. I don't think we really care as much about some of the dynamics, I think, in terms of like one offs and some of the spend that they're going to have on A.I., which is also going to lead, though, to, I think, a higher margin.

7:09I think this was all about, hey, there's a lot of complacency out there. And after we've run 22 percent on the S &P off those intraday lows, it's also very interesting. The sense you got here is that Wall Street is a lot more concerned than Main Street. And that's interesting. And I do mean retail traders versus institutional. And I would argue the retail trader is the one that's been buying this dip. Well, it's kind of interesting because you think about and, you know, the hard data versus the soft data. What JP Morgan is doing is they're not reserving more necessarily. They're not kind of paring back buybacks.

7:41They do have an excessive amount of capital. But kind of what they're doing doesn't necessarily suggest a slowdown. But the sentiment read that you get, you know, suggests that they're cautious and they're worried about what's going on geopolitically. They're worried about what's going on with the tariffs. They showed an analysis of kind of how their CNI borrowers would fare in various tariff scenarios in which industries would be much more affected and less likely to pass on those costs to consumers. So it definitely is kind of a very similar to what we're seeing just broadly economically with the hard data showing, you know, very stable economic backdrop and the soft data showing sentiment less so.

8:18Just one more thing to add. He really believes that a really tough time in the economy and the markets, ultimately in the medium to longer term, is good for J.P. Morgan, that they will be the last one standing. And I think part of that also, he opened the door to make acquisitions. He kind of confirmed that. So I would imagine if things did get bad, he would certainly go make acquisitions. So regulation being turned down definitely opens the door. Leslie, thank you. Thank you. Leslie Picker. I mean, it's tremendous. It's always great to have us. You're pushing it on the bank route or the bank.

8:48What do they call it when you have a beat? A beat. A beat. The bank beat. Yes, thank you. Back to you, Mel. That's it? I was looking for a trade. Citibank is a trade. You know, Leslie was on the show last week. I think it was last week. Reported Buffett liquidated his position in Citi. We talked about it. Tim actually said probably did it at a great level because the stock traded up almost to 90 bucks or so. Traded back down. But here I look at Citi with a$93 tangible book. I mean, it's not ridiculous to think we can't get back to those levels. Even more cautious on J.P. Morgan. Yes. Well, one, it's expensive.

9:21It deserves to be expensive for sure. But also the question mark about Jamie's tenure, that doesn't weigh on any other bank like it does on J.P. Morgan. I guess I look at banks here and I think if credit spreads are too tight and if we haven't really priced in any tariffs yet. And if we I mean, look, I'm a I'm a believer in the money center banks. I am Long City. I was selling upside. I was essentially selling outside calls because I really thought, you know, I'll be a happy seller at 85 bucks again at three months, which is the highest before the world changed dramatically. And I think the world has changed dramatically, at least on some level, even though what we haven't really heard from anybody yet is this this pullback in EPS, which will lead to the pullback in the overall multiple.

10:01So I like Citibank guys, right? I mean, I think you're safe there. But as it got up near one time spoke for Citibank, that's a place I think, you know, after this run, I don't know you have to be buying back to two hands. You know, investors are paying a premium for the best companies within the sectors, and that is the best company. It's always going to be expensive. And I would say that private equity has taken the thunder away a little bit of the banks in terms of growth. So when things do slow down, I believe that's where the problems are going to lie. For the most part, yes, the banks will have issues, but not to the degree that credit could deteriorate within private equity.

10:30In terms of Jamie Dimon's forecast, to use your metaphor, for the markets, basically saying the markets are too complacent. They are too expensive right now. Credit spreads have not widened to the point, you know, to the extent they probably should be at to reflect the risk in the economy. Are we going to go the way of Jamie Dimon's forecast, the markets, that is? I don't know. I mean, we've all, you know, Danny outlined that Jamie tends to be conservative. But, I mean, we, wait for it, Guy. We talked about cumulonimbus clouds today. I mean, we really did. I mean, and today was a cirrus stratus day, really.

11:04And the market's been in cirrus stratus. And if you don't know what those terms mean, look them up. Take Earth Science. Exactly. Exactly. All right. Well, meanwhile, Wall Street appearing to shrug off Moody's downgrade of U.S. debt. The major indices closing around session highs. The Dow up 137 points. The S &P 500 now on a six-day winning streak. Even the Nasdaq down nearly a percent and a half at its lows, ending in the green. Meanwhile, rates were largely higher with the 30-year Treasury yield topping 5 percent, hitting its highest level since January, and mortgage rates topping 7 percent at their highs.

11:35Let's get insight on the big moves from Julian Emanuel, Evercore ISI's senior managing director. Julian, great to see you. Great to be here. We were just talking about Jamie Dimon's forecast for the markets. Are you on the same page here or do you think there's more upside? No, we are on the same page. Look, you've come, and I will say this is equal opportunity hatred. There were a lot of people that week in April of the low were saying, why are you backing up the truck here? A lot of the same people are saying, why aren't you a little bit more optimistic right now? Our view is the truth lies somewhere in the middle.

12:09And with the knowledge that valuation alone doesn't end a bull run, and ultimately we don't think it'll end this bull run, we just think it's a time to pause, catch your breath, and realize that you've swung so far the other way to this optimism where recession is all but priced out, and it's not our base case, of course. but also that the tariff news is probably going to get maybe incrementally more difficult before it gets better. Let's talk about the bond market then, because at one point today, I think 10-year yields were 455 or just short of it. Something happened midday where yields backed up.

12:48But I think yields are still a problem. What are you thinking here? No question. But if you look at today, the trading pattern of the day didn't surprise us at all. Because, frankly, you know, coming into the morning, there was this end of America exceptionalism act to we still think that the stocks that are connected to the A.I. theme are long term outperformers. That outperformance resumed at the lows on April 7th. It's got longer to go. But the fact is, is that yields came in simply because we realized that getting the bill through the committee last night reduces the risk of default. Hello, that's good for fixed income, even if the longer term view is that deficits are going to expand.

13:30Julian, Moody's was later to this downgrade than they were to subprime. I mean, it was pretty obvious all the things that they said didn't shock anybody. Curious, do you think, who the incremental buyers were today of 10-year? We know Scott Besson's obsessed, obviously, with 10-year yields. We know that there's been some buying within Washington. I'm just curious to get your thoughts on the patterns you've seen. So I will tell you again, when you think about how quickly and the week of the low in April, 81 percent of Evercore's clients thought we were either started a recession or one was going to begin in the second half of 2025.

14:05And you've gone the completely other way around. A lot of these are asset allocation trades. We've had a bunch of these conversations over the last week or so. And we know that however this is going to sort itself out, A, it does seem that the big, beautiful bill is going to ultimately make its way through. And B, look, Treasury Secretary Besant has shown that he's very sensitive to the 10-year yield, and they're going to continue to fight to keep it down. So what is going to stop the 10-year yield from reacting to fundamentals? I mean, there's nothing about the big, beautiful bill and what's going on with, I think, tariff policy, which is, I think, hurting the income side of the revenue side of the income state.

14:50I mean, there's nothing in here that supports the fundamentals around the credit profile of the United States of America on top of issuance that all we seem to do is talk about the refunding calendar in a way we never did before. So I don't think it's lights out for USA, Inc. But I do think it's if he is obsessed, I think that's I think that's fair. I think that's important, by the way. That was part of kind of the shock that I think was going around Wall Street community. Right. I mean, it's just kind of like this. This guy is one of us. And he doesn't seem to be paying attention to the important stuff here.

15:20At some point, how do you have to change the policy or you really have to cut spending? No, you do. And look, if you go back to the beginning of this bull market in October of 2022, We broke it down. The vast majority above 90 percent of the gains are attributable to when the 10 year yield was below four and a half percent. Tiny gains between four and a half and four and three quarters above four and three quarters. Forget it. The market is actually returns negative. So to that point, look, the fundamentals are going to be very, very difficult. And frankly, Germany going to deficit spending to finance, you know, the ongoing rearmament is secularly going to put upward pressure on yields.

16:13It's just that when we think about the economy, you aren't likely to get the sort of gangbusters growth that will really send you through 5 percent on the 10 year yield. So you think we are pretty toppy right now. I mean, we're just about where we should be. If you think that four and a half is sort of the ceiling for the equity market, I mean, where do you think yields are going to be? Because it sounds like you think they should be biased higher. And in that case, the markets are where they are. They're not going anywhere soon. Right. And they should be biased higher. But remember, and part of a lot of people's frustration, certainly the bears over the last number of weeks, is the fact that the data hasn't rolled over yet.

16:57There's still an expectation that at some point you're going to see a soft patch of economic data showing up. And to us, that's really the limiting factor for upward pressure on yields and the limiting factor for upward pressure in the equity markets. All right. Julian, thank you. Julian Emanuel, Evercore ISI. Tim talked about it about three weeks ago. I said the pain trade is higher. Julian said similar, and the pain trade has been higher. Without question, if you had asked me on Friday afternoon what was going to happen today, 80 to 100 handles to the downside in the S &P made a lot of sense.

17:30It did not happen. The late rally in the bond market is encouraging, but the question is, what's the right multiple in a slowing environment for the S &P 500 if you want to assume$250? 19, which is still historically high, is a 47.50 S &P. I think that's sort of reasonable. So the lack of market reaction, is that a tell on how much positivity is built into the market or that Moody's is so late to the game that it's inconsequential? I think it's a little bit of both. I think we got the first scare. So think about what happened in April. Dollar weekend, rates went up, equities dropped. We saw a microcosm of it this morning for about an hour.

18:07It was going to happen. So a little PTSD, again, was going to happen here. But I agree with Guy and Julian. I think we're going to see the effects of this. We have to be able to see it. So I think S &P earnings are too high for 3Q and 4Q and 2Q. Whether that means anything and people look past it, I don't know. Well, S &P earnings are nowhere near a recession, right? They're nowhere near if we really do get a slowdown. And, you know, again, I'll leave that out there. But what we were digesting around the period Danny's referring to is also just some sense of, you know, And Julian said the data hasn't rolled over.

18:36But as a guy that's been in emerging markets a lot of my career, in emerging markets, when the sovereigns, when their data rolls over, you sell their bonds and you sell them hard. Now, we're not an emerging market, but but that was kind of where we were going. We were starting in April to to look into the abyss and say, well, what happens when this policy is very much putting headwinds into growth? So I just think it's not going to happen quickly. I think the upward trend to yields is probably more in guys line. But I do think when data slows down quickly right now, based upon the market we have today, anything can happen.

19:09But those yields are going to go down. They're going to respond as they should. There'll be a rally in the Treasury market with all the things equal to where they are now at first before they start to back up. I thought the market's reaction today, the action in general, was shockingly positive to me. I mean, you know, I don't think the market will say what the rights are for the U.S. bonds. But that would have been a perfect excuse to sell off of what has been an enormous rally. Even the names of the rally the most, like the invidias of the world, where you had the big anticipation of Jensen-Wong's speech and all of that, ended up positive today.

19:43That's kind of amazing. It's really interesting that Treasury yields, right, would rally or bonds rally yields would fall if it was a flight to safety. So for a period of time this morning, rates went up in the equity markets. That's all they're watching. And then there's a flight to safety, maybe. And then they go down and become self-fulfilling. that you can get back into equities. But if yields go down for the wrong reasons, slow down in growth, then the market's way too expensive. Coming up, pressing pause on Netflix. My analysts are downgrading the name after its big run-up, and whether our traders agree with that call, that is next.

20:11Plus, shares of UNH continuing their comeback after last week's plunge. But can the insurance giant keep its momentum coming after hitting more than five-year lows? We'll debate that ahead. Don't go anywhere. Fast Money's back in two. This is Fast Money with Melissa Lee. Right here on CNBC.

20:39Welcome back to Fast Money. J.P. Morgan pressing pause on Netflix. The firm downgrading the streaming giant to neutral from overweight while still positive on the stock long term. Analysts saying, quote, the risk reward near term is becoming more balanced after its recent run. The firm did, though, raise its price target by$70 to$1 ,220. Netflix shares have nearly doubled in the past year. So just basically just because it's run so far so fast. Very reasonable. I mean, they're overweight, go to neutral, still have a$1 ,220. What is it? $1 ,220 price target good for them? I mean, this is what the analyst community should be doing this.

21:12I admire the call, and I understand it. You know, valuation, the market, all those different things. But with all that said, I don't think you really run all that far away from Netflix. I mean, every seller for the last couple of years has been tremendous opportunity. they continue to dominate the space. I mean, not that much impact to the stock's action today. No. And it was proven safe in a terrible, volatile market. And I think it's been proven safe even before that. And it's just, what are we going to pay? What's the multiple we're going to put on this? There are drivers. There's certainly the ad tier support, but there are the events dynamics.

21:44There's the international expansion. I mean, there's a lot of things that can give you a sense. The economies of scale are really helping here. And I think the margin stays high. One point that's interesting, though, is that Netflix is seen as sort of a, you know, a secure place, a safety from tariffs, basically, you know, not impacted by tariffs at all. And so to the extent that tariff pressure comes off the name, comes off the markets, should Netflix give back some of that? That's a good point. But I also think people think of it as, you know, recession is the last thing you're going to get rid of, right?

22:14Or you may do the ad supported tier. So I'm long Netflix. I read the report. I think they make very good points. It's hard to really, I can't really say this is a value investment here. However, so I sold some July 1200s. Every time I have done this trade, you'd think I would learn something, but I haven't. Because I sold, they're$70, right? It seems like, well, that's a lot of premium. We'll see. I don't know. That's been, I've been wrong several times selling those and had to buy them back higher. Part of the thesis to your point on the downgrade was that people move out of less defensive stocks and become much more aggressive.

22:48This is actually a growth company. And they've had two or three different times in the last few years where people have doubted. Oh, you're going to cut off passwords? Well, that's going to hurt your subs. Nope, didn't happen. Oh, you're going to go spend a lot on live sports? Yeah, it was accretive, or it will turn out to be accretive. Or all these transformational things that they've done. You're going to stop giving quarterly subscriber growth? We're going to punish you for the lack of optics. Well, guess what? They blew away those numbers again. So to me, yes, it's expensive. But as I said on J.P.