Jim Kramer summarizes the earnings reports of 4 major banks

CNBC’s Jim Cramer on Friday provided investors with his thoughts on the major banks reporting earnings this week.

“If the entire market hadn’t really started yesterday, I think we could have made a nice rally in response to these numbers. But, as it stands, I would say this is a surprisingly strong start to earnings season,” he said.

c. B. Morgan ChaseAnd the Morgan StanleyAnd the Wells Fargo And the City Group It announced its latest quarterly results on Friday. Here’s Kramer’s take on each of Banks’ recent quarters:

c. B. Morgan Chase

c. B. Morgan Chase Beat Wall Street Predictions Up and down the net, supported by an interest rate hike by the Federal Reserve. Cramer said he was surprised that the bank enjoyed a strong quarter since CEO Jimmy Dimon warned about the US economy Likely to enter a recession in the middle of next year.

However, Cramer said he still expects the bank to see a boost from higher interest rates.

“Banks make a fortune when the Federal Reserve raises interest rates, because they can take your deposits, for which they pay almost nothing, and then invest them in short-term Treasurys to get a much higher risk-free return,” he explained.

Wells Fargo

the bank Outperforms profits and revenues in the last quarter But it saw its net profit fall from its decision to increase its loan loss reserves.

Cramer said he likes the stock because the company has a higher interest rate exposure than most of its peers, which makes it attractive during a high interest rate environment. And while the risk of higher interest rates is that people could lose their jobs and have to default on their obligations, which could lead to a higher percentage of bad loans, Wells Fargo’s strength in net interest income has more than enough to offset the damage caused by bad loans. , according to Kramer.

“I’m still a believer here – the management is doing very well – I think the story only gets better with higher prices,” he said. “Buy Wells Fargo.”

Morgan Stanley

Cramer said he thinks the market has overreacted to Morgan Stanley Third quarter earnings and revenue miss. The bank’s shares fell 5%.

While acknowledging that the quarter was a approximation, Kramer emphasized that he believes the stock is a buy, highlighting the company’s generous earnings and share buybacks.

“I think Morgan Stanley can eventually thrive once the markets are out, but until then you have to be patient in this market,” he said. He said.

City Group

Cramer said he’d rather own the other banks than Citi, which Outperformed revenue and profit in the last quarter But it saw a 25% drop in profits. The company’s shares rose 0.65%.

“We’ve seen Citi rise in response to earnings a few times…and then you know what happened? The gains faded quickly, and the stock went straight back down,” he said.

Disclaimer: Cramer Charitable Fund owns shares in Morgan Stanley and Wells Fargo.

Jim Kramer summarizes the earnings reports of 4 major banks

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