Story Stock: Two Big Banks Going in Different Directions

JPMorgan Chase fell short of earnings estimates in the first quarter, Wells Fargo exceeded.
4:13 | 04/11/14

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Transcript for Story Stock: Two Big Banks Going in Different Directions
Devin -- -- New York is the financial markets. Closed on Friday April 11 this is story stock. Today -- double dose as we look at the fortunes of two big banks going in different directions last quarter. JPMorgan missed its earning estimates while Wells Fargo beat -- predictions. Detailing all the ups and downs down -- -- -- toll from Yahoo! finance Mike Lester we're JPMorgan Chase what happened to the world's biggest bank last quarter. Get JPMorgan felt fairly far short of -- earnings forecasts I twelve cents at dollar 28 is what they came in listen only the fifth time in about ten years. The JPMorgan is falling short. -- quarterly earnings forecast basically the revenue was just not there and also they did not have a great quarter in terms of trading they do a lot of of trading for bonds to big Wall Street firm as well as big consumer bank. And so those are the two things that really held it back the mortgage business. Industrywide. Is really slow down dramatically from a year ago and that definitely hit by JPMorgan's revenue numbers. Let's take a look at those numbers us and we've got a chart here that to date stock performance for JPMorgan. You see there to quite at. Quite a -- the past couple days. Michael this put any heat and Jamie -- you think he's already pretty controversial. You know -- is I don't really think this quarter in particular -- a -- more heat on him simply because last year. You know most and he was coming from regulatory investigations in criticisms of kind of his governance and how he dealt with the big trading loss that the firm had a couple of years ago. Right now this is more a matter of how he's managing the business and you know what they were quick to say JPMorgan manager was quick to say. One of the reasons that they did not have as strong revenue performance is that they're deciding not to lower their loan standards so basically this saying the industry in general is getting risky again. People are actually. You know handing loans out that they don't believe. Make a lot of sense of they've decided to forgo some business this is a exactly part of Jamie Dimon -- long term image of saying he is the sober banker when everybody else is getting a little silly they did this before the financial crisis in the mid. And thousands and at least for now that's gonna buy him some time. With investors' interest in -- those are not taking any new risks necessarily in the -- night -- -- -- short term. Slide let's -- to Wells -- for second look at its performance what did -- do differently this quarter that made it come out on top. Fault for one thing would Wells Fargo is easily the best -- very large bank act controlling costs and being disciplined about exactly how it spends its money in trying to keep it in line with what the revenues going to be and that's and they did this quarter again. They didn't have you know any better time in the mortgage business which is by far their biggest business. It was down substantially. New mortgage loans for purchase of of homes is down something like two thirds from the year earlier. But they did keep cost -- money also had a series of where you would consider one time gains. Basically just -- some profits for some ancillary things not really the core business they did enable them to beat on earnings but I do think it's much more about the financial discipline that they show that don't -- Wall Street celebrates also Wall Street Wells Fargo is also not as big. In the trading business as JPMorgan is so they didn't have that dragged. On their number. It's all those things differentiating Wells Fargo let's take a look at that this chart of their two day performance. As a stock shows us. That stock going up there and a different direction JPMorgan obviously very favorable to Portugal might give us a sense just the bottom line here for the average investor why should. They pay attention to these two big banks and what might this mean for them. -- -- I -- these banks -- a tremendous percentage of the US population terms of consumer. -- -- credit cards in mortgages and also in just financing businesses so I do think. That really their fortunes give me an idea of the velocity of the economic expansion right now in the first quarter -- a little bit of a slowdown and you also have to watch them as kind of a proxy for how the housing businesses going and it's stalled out right now the housing recovery stalled out a little bit we have to see if the springtime -- -- pick up again. All right Indians begin springtime or off to a springtime weekend Mike -- -- of Yahoo! finance thanks for being here you've been watching this story stocks they would abcnews.com for all the latest headlines. I'm Devin Dwyer -- New York thanks for watching.

This transcript has been automatically generated and may not be 100% accurate.

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