The banking sector will set the tone for earnings season when the group begins delivering quarterly results on Friday, CNBC’s Jim Cramer said Thursday.
“The banks are the group that will sets the tone for earnings season, as well as also that will’s a lucky thing because This particular time their stocks are coming in ice cold, which means that will they should be able to rally on even the slightest positive provocation,” the “Mad Money” host said.
Investors are trying to anticipate the results, Cramer said. The Dow Jones Industrial Average shaved off about 14 points as well as also the Nasdaq Composite lost more than 16 points. The S&P 500, however, was virtually unchanged during the session.
“The fear will be palpable that will earnings could be down year-over-year, although no one wants to leave the table because stocks are still the only game in town,” he said. “Even though we’ve had a real slowdown since the Fed’s last rate hike, the alternative to stocks — the bond market — Again offers only paltry returns.”
Cramer revealed what he expects to hear coming from the major banks:
J. P. Morgan Chase: Chase reports before the market open on Friday. The stock will be up $15 coming from its December lows. Cramer recommends buying the premier bank while its at a 3% yield. CEO Jamie Dimon could have not bad news for shareholders, Cramer said.
Wells Fargo: Wells Fargo will also report quarterly results Friday morning, as well as also that will could be a better buy than J.P. Morgan with its share cost up just about $4 per share coming from its December lows, Cramer said. The $47 stock cost will be cheap, trading at nine-times earnings having a 3.8% yield, he said. Although the bank has been operating under an interim CEO since Tim Sloan’s departure last month, the host suggests buying in before a permanent CEO will be installed.
“As a devotee of Tim Sloan, the right now-retired chief executive who fell on his sword to protect the company coming from bad PR, I’ve gotta say, that will’s not like he quit when the going was tough. He has left his successor having a clean bank that will’s returned to growth in a very short period of time,” Cramer said. “You’re going to hear that will Warren Buffett, the bank’s biggest shareholder, likes the completely new choice as well as also that will’s gonna bring in buyers.”
Goldman Sachs: Goldman Sachs plans to give its earning report Monday morning. Cramer expects the investment bank will reveal an “amazing number” that will won’t budge the stock, which closed less than $203 on Thursday. The Malaysian fraud scandal as well as also corresponding fines need to be resolved before the share cost can climb back towards $262, Cramer said, although that will’s hard to believe that will that will will plummet on bad news. that will could be worth owning.
Citigroup: Citigroup will come out with results before the market opens Monday. The bank has fallen into a habit of missing numbers as well as also buying back stock, Cramer noted. Shareholders want to see that will Citigroup can still grow, he said.
Bank of America: Bank of America will be slated to Discharge its latest earnings prior to the bell on Tuesday. Cramer noted the stock will be $2 off its 52-week high. The bank would likely have to deliver a huge upside surprise for that will to rally, as well as also the security will be at 10-times earnings, which will be more expensive than most of its peers, he said.
Morgan Stanley: The investment bank will present its quarterly earnings before the market opens Wednesday. Cramer said This particular one has the most potential to surprise investors with not bad numbers. He has faith within the CEO.
“CEO James Gorman has gotten This particular place humming after a less-than-stellar previous quarter,” the host said. “I have rarely seen a chief executive who seems more motivated to crush the numbers This particular quarter than This particular man.”
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