Big banks in the United States beat earnings expectations for the second quarter of 2023, but the economic outlook remains uncertain.

JPMorgan Chase, Citigroup, and Wells Fargo all reported higher profits than analysts had expected. JPMorgan Chase’s profit rose 4% to $11.4 billion, Citigroup’s profit rose 25% to $4.2 billion, and Wells Fargo’s profit rose 17% to $5.1 billion.

The banks’ strong earnings were driven by a number of factors, including higher interest rates, strong loan growth, and low credit costs.

However, the banks also warned that the economic outlook is uncertain. JPMorgan Chase CEO Jamie Dimon said that the bank is “preparing for a possible recession.” Citigroup CEO Jane Fraser said that the bank is “seeing some early warning signs of a potential slowdown.”

Here are some of the key factors that are impacting the economic outlook:

Rising interest rates: The Federal Reserve is raising interest rates in an effort to combat inflation. This is making it more expensive for businesses and consumers to borrow money.
War in Ukraine: The war in Ukraine is causing uncertainty in the global economy and is leading to higher energy and food prices.
Supply chain disruptions: Supply chain disruptions continue to impact businesses, making it difficult to get the goods and materials they need.
Despite the uncertain economic outlook, the big banks are well-positioned to weather a potential recession. They have strong capital levels and low loan losses.

Here are some of the things that investors should look for when evaluating big bank stocks:

Loan growth: Loan growth is a key indicator of the health of the economy. Banks with strong loan growth are likely to do well in a growing economy.
Credit costs: Credit costs are a measure of the losses that banks expect to take on loans. Banks with low credit costs are likely to do well in a recession.
Capital levels: Capital levels are a measure of a bank’s financial strength. Banks with strong capital levels are better able to withstand shocks to the economy.
Overall, the big banks’ strong earnings for the second quarter of 2023 are a positive sign for the economy. However, investors should be aware of the uncertain economic outlook and should carefully consider all of the risks and rewards involved before investing in big bank stocks.