JPMorgan Chase & Co.'s pandemic boom ended with a sharp drop in profits as it issued a warning: Rising inflation and the war in Ukraine pose big threats to the U.S. economy. Chief Executive Jamie Dimon said the economy is strong and growing, citing double-digit growth in card spending, low delinquencies and healthy household and consumer balance sheets. But the bank also surprised Wall Street by setting aside $900 million in new funds to prepare for economic turmoil; a year ago, it freed up $5.2 billion it had reserved for potential loan losses in the pandemic's early months. Those extra funds are there to cushion the bank if the economy tips into recession, sending loan defaults higher. Mr. Dimon said that risk remains remote but has grown following Russia's invasion of Ukraine and as inflation has risen to its highest level in 40 years. "Those are very powerful forces, and those things are going to collide at one point," Mr. Dimon said. "No one knows what's going to turn out." A recession, he said, is far from a sure thing. "Is it possible? Absolutely." The nation's biggest bank recorded a profit of $8.28 billion in the first quarter, a 42% decline from a year ago.

The Swiss stock market was little changed at the end of trading on Wednesday. The SMI closed little changed at 12,379 points. Among the 20 SMI stocks, there were 13 price losers and seven price winners. 31.38 (previously: 38.16) million shares were traded. Defensive stocks such as SMI heavyweight Nestle (+0.8%) and Swisscom (+0.7%) held up better than the market. In the pharmaceutical sector, Novartis ended the trading session little changed, while Roche gained 0.4 per cent. Alcon (-2.8%) and Lonza (-1.1%), on the other hand, were sold. Investors also parted with bank shares. Here the business figures of the US bank JP Morgan (JPM), which were received with disappointment, are likely to have weighed. Observers also pointed to the renewed slight decline in market interest rates. Credit Suisse fell 0.7 per cent and UBS 1.0 per cent. Insurers were also given. Across Europe, the sector was among the weakest. Swiss Life and Zurich posted losses of 0.3 and 1.1 per cent, respectively. Swiss Re was down 0.9 per cent on the day of the annual general meeting.

European equity indices closed mixed on Wednesday as investors remained concerned about inflation ahead of the European Central Bank's (ECB) monthly meeting. The Stoxx Europe 600 index was flat at 456.8 points. In Paris, the CAC 40 and the SBF 120 gained 0.1% each. In Frankfurt, the Dax 40 gave up 0.3% while in London, the FTSE 100 rose by 0.1%. GlaxoSmithKline PLC has agreed to buy Sierra Oncology Inc. for $1.9 billion, in a deal that will boost the British pharmaceutical giant’s cancer drug pipeline. The deal centers on a drug called momelotinib, which treats patients with a rare type of bone marrow cancer called myelofibrosis who have developed anemia. Glaxo expects the treatment, which Sierra plans to submit to the Food and Drug Administration for review in the coming weeks, to start generating sales next year. HSBC Holdings PLC will hire rapidly in its Asian wealth business in 2022, building on last year’s brisk expansion, and remains open to growing in this area through deals, according to the executive overseeing the bank’s dealings with individual customers. The London-based bank is jockeying with rivals to win more business from the region’s growing ranks of affluent customers, and is investing billions of dollars to strengthen its position. “Asia is where we are doubling down our efforts, not only because Asia wealth is growing twice as fast as the rest of the world, but also because we are ‘the bank of Asia,’” said Nuno Matos, the chief executive of HSBC’s wealth and personal banking division.

U.S. stocks rose and bond yields fell as the first earnings reports from major companies began to roll in and investors considered the highest inflation in four decades. Stocks rose for most of the day, closing just below session highs. The Nasdaq Composite led the major indexes upward Wednesday, closing higher by 272.02 points, or 2.03%, at 13643.59. The S&P 500 added 1.1%, or 49.14 points, to 4446.59 after it fell 0.3% on Tuesday. The Dow Jones Industrial Average was up 1%, or 344.23 points, to end the session at 34564.59. BlackRock Inc. reported higher quarterly profit even as market volatility lowered the investment firm’s assets under management to $9.6 trillion. The world’s largest asset manager reported net income of $1.4 billion, or $9.35 a share, for the first quarter, up 20% from $1.2 billion in the same period a year earlier. BlackRock exceeded analyst expectations of a per-share profit of $8.60, according to analysts polled by S&P Global Market Intelligence. Revenue rose 7% to $4.7 billion, slightly below analysts’ estimates of $4.76 billion. French music streaming service Deezer is nearing a deal to go public by merging with a special purpose acquisition company backed by the family behind luxury titan Kering SA, according to people familiar with the matter, as consumer demand for music continues to grow. The Paris-based competitor to Spotify Technology SA and other music streamers has 16 million active users and is available in more than 180 countries, according to its website. Deezer offers listeners a catalog of more than 90 million songs, as well as podcasts, audio books and radio channels.

The stock markets in East Asia and Australia were mostly up on Thursday. In Japan, in the wake of the Nasdaq, it is mainly technology and electronics stocks that are leading the Nikkei up 1 per cent. Softbank is up 2.2 per cent and Advantest 2.5 per cent, while the Chinese stock markets in Hong Kong (+0.4 per cent) and Shanghai (+0.7 per cent) are on the rise. Prices continue to be held back by the tough lockdown measures in Shanghai. In Australia, the leading index gains 0.5 per cent.

Treasury yields fell back further in Asia as investors continued to remain focused on Tuesday's release of the U.S. consumer-price index report, which has sparked debate over whether inflation has already peaked.

JPM lowers Telekom Austria target to EUR 9.50 (9.80) – Overweight
UBS lowers PostNL to Neutral (Buy) – EUR 3.25 (4.55)
Deutsche Bank lowers ING target to EUR 13 (15) – Buy

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