Caution on JPMorgan earnings and long-term margin pressure from AI

A-shares experienced another rollercoaster day today. The opening was brutal, with over 4,800 stocks declining, but gains were largely recovered by the close, and the 3,800-point level was held. However, there was significant divergence in the performance of today's strong sectors: AI hardware saw PCBs and CPOs; seasonal themes included the ice and snow economy, which is already being traded in mid-October; traditional cyclicals featured dyes-related stocks; and consumer staples included baijiu. Yet, there was no unified main theme. Capital scattered to find opportunities during intraday rebounds, a typical characteristic of an oversold bounce... without consensus. Today's trading volume was 1.68 trillion yuan. Although this represents a slight increase from yesterday, driven mainly after the lunch break, it remains weak compared to the usual daily volumes of two or three trillion yuan. In US pre-market trading, the Dow Jones is relatively strong, while the Nasdaq is weaker. Selling pressure continues to concentrate on memory chips and AI hardware, despite oil prices and US Treasury yields falling. Memory stocks plummeted yesterday due to news about ChangXin Memory Technologies (CXMT), but this information actually emerged the day before yesterday. This time lag in the market reaction is somewhat peculiar. JPMorgan and Goldman Sachs are set to release their earnings tonight. Their stock prices have fallen for quite some time, but that doesn't guarantee an easy pass for tonight's reports, as profit expectations haven't been lowered accordingly. In fact, JPMorgan's revenue expectation was even raised by 8%. This reflects a disconnect: analysts still validate the profits already earned, while investors worry about whether such profitability can be sustained going forward. This disconnect is closely related to the rise of AI assistants. Currently, AI assistants can eliminate many everyday hassles, such as switching banks or comparing deposit rates. Since interest income for depositors is essentially an expense for banks, when depositors benefit, the most comfortable profit margin for banks naturally gets compressed. In the past, tying accounts to salaries, mortgages, and utility bills made moving inconvenient, so many people accepted low-interest deposits. If AI gradually simplifies price comparison, reminders, and account migration, banks may need to pay higher interest to retain funds. Therefore, during this recent earnings season, listen closely to how banks discuss AI.