Jim Cramer talks about major bank earnings and bank stock movements

The nation’s largest banks released mixed third-quarter results this week, but Wall Street’s reaction was overwhelmingly negative, with all six major bank stocks falling despite some strong results.

CNBC’s Jim Cramer said on Wednesday, the second day after a flood of financial returns, investors appeared to be more concerned about what’s to come than what banks had just announced.

“Frankly, it’s strange to see such a universally negative reaction to a series of quarters that had so much positive content,” the “Mad Money” host said. “But this is what happens when investors worry about the future, and it’s hard not to worry given persistent inflation, rising interest rates and newly volatile capital markets.”

Here are some highlights from each bank’s report:

wells fargo reported mixed quarterly results on Tuesday, beating profit estimates but missing sales. Net interest margin, a key profitability indicator that measures the spread between the profits banks earn on loans and the profits they pay on deposits, held steady at 2.43%, slightly above expectations. This stabilization was particularly encouraging as the bank had missed estimates for its net interest margin in nine of the past 10 quarters. The stock price fell on the news, but Kramer’s Charitable Trust, a portfolio used by CNBC Investment Club, upgraded the stock to a “buy” rating. “Chief Executive Officer Charlie Scharf has emphasized that the bank is well-positioned to perform better in a high interest rate environment,” said Kramer. “Given our track record, I have confidence in his judgment.” Wells Fargo stock rose slightly on Wednesday.

JP Morgan Chase Both sales and bottom line results fell short of expectations on Tuesday. Weakness in fixed income trading and asset management weighed on results, and expenses rose faster than revenues. However, during the earnings call, management provided higher-than-expected net interest income forecasts for the fourth quarter and 2027. The stock initially struggled, but recovered much of its losses as investors digested the outlook. For Cramer, the quarter was “not a big change for the world’s largest banks.” JPMorgan stock rose nearly 1% in Wednesday’s terrible market.

citygroup delivered one of its strongest headline reports on Tuesday. Revenue rose 8% year-over-year, marking the bank’s best third-quarter performance in a decade, while management raised its full-year net interest income forecast. Citi also stood out as the only major bank to beat expectations for bond trading revenue. Despite this positive news, the stock price fell 5.6% following the news. “I suspect Citi stock has been punished for its recent outperformance,” Cramer said. “Before yesterday’s beatdown, we were circling the rest of the group. But if you believe in a turnaround like I do, this is a buying opportunity.” City shares fell a further 1.8% on Wednesday.

on wednesday, bank of america released one of the group’s most disappointing reports, falling short of revenue and profit expectations, while also contending with a $1.2 billion regulatory fine related to alleged breaches of anti-money laundering and sanctions laws. The bank’s capital markets business was particularly weak, with investment banking fees down 11% and fixed income trading revenue down 17%. Although management emphasized continued growth in deposits and loans, those positives were not enough to offset the disappointing performance. Following this news, the stock price fell by about 5%.

goldman sachs He “put up some great numbers” on Tuesday, comfortably beating his high and low expectations. Investment banking fees rose 21% and equity trading revenue rose 72%, offsetting weaker-than-expected fixed income trading. Management also struck an optimistic tone, highlighting opportunities to build out AI infrastructure and raise capital for robust investment banking operations. But the stock gave up its early gains and ended Tuesday slightly lower. “When a company releases such strong numbers and its stock price gets hammered anyway, it means there are a lot of skeptics out there,” he said. “They think the boom days are over. I don’t agree, but at least for now, that’s what the market is saying.” Following the report, Kramer’s Charitable Trust saw the drop in Goldman’s stock price as a buying opportunity and upgraded Goldman’s rating to the equivalent of a “buy.” The stock fell another 1.5% on Wednesday.

morgan stanley It also exceeded expectations on Wednesday. Revenue at the bank’s Institutional Securities Group, which includes investment banking and sales and trading divisions, rose 18%, while revenue at its wealth management division rose 10%. CEO Ted Pick said he was “cautiously optimistic about the fourth quarter,” with the bank reportedly in a leading position. antropic Expected IPO. Still, shares fell nearly 3% despite the strong results, reflecting investors’ reluctance to reward better-than-expected earnings amid concerns about the banking sector.