Bank Earnings Day Two, Trump vs. Powell, "Good News, Bad News" Inflation Picture 1/14/26

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David Faber (1:00)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (1:06)

Good Wednesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen here at Post 9 of the New York Stock Exchange. You'll see Cramer tonight on MAD. Stocks looking at another day at the clients as bank earnings are mixed. A lot of attention on Iran, waiting on SCOTUS perhaps. Brent crude up more than 10 percent over five sessions. Retail sales do come in strong, but so does year-on-year producer prices up 3 percent. Bonds mostly taking that in stride. Our roadmap begins with this flow to bank earnings. Wells, B of A and Citi beat estimates, most of them anyway. What they're saying about they're out looking for the US economy.

Sara Eisen (1:39)

From Wall Street to Washington, a Supreme Court opinion on President Trump's tariffs could come today. We don't know, but we are expecting a decision, plus the latest back and forth on Powell and the Fed independence.

David Faber (1:50)

And I will have some new developments in that battle for a foreign brother's discovery. Netflix likely to make its deal all cash. We will talk about why.

Carl Quintanilla (1:59)

Let's begin with Margaret reaction to some of the bank earnings today. B of A as we said, Wells and Citi. The outlier is Wells today, Sara, which is a miss on both the bottom and the top line.

Sara Eisen (2:09)

I don't know. I think it says more a little bit about the the expectations just missing because overall it was a pretty healthy quarter for Wells. I did have a chance to talk to the CFO and the and the CEO today about the business. And it was exactly what they were expected and exactly what they think that they've been telegraphing Wall Street in terms of growth. They've been unshackled from the Fed with this asset cap where they weren't allowed to grow. And now they are seeing really strong growth. Credit card, they say, continues to see strong increases in spend. New accounts grew over 20% from a year ago. Auto lending returned to growth, they said, balances up 19%. Net checking account growth was stronger. The Wells Fargo Premier, for instance, grew 14%.

They did forecast net interest income for the year to about $50 billion in 2026 And just to show you what I mean when I say expectations, the expectations for the full year was $50.33 billion, according to the facts at consensus. And same with the quarterly numbers as well. I think it was a slight miss on net interest income, but similar growth trends to what we're seeing from some of the others, the Bank of America's and the JP Morgan's on Wall Street as well. So this is a stock that had outperformed, and there are, you know, higher expectations now, but, you know, credit quality looked good, the consumer looked good, and they're proving, I think, their growth story with continued momentum on the cost-cutting. I mean, they have really, they have changed this bank, reduced the headcount from, I think, 275,000 people to 205,000 people.

David Faber (3:39)

And that shows up in some of the summers. Yeah, no, and Charlie Sharpe has made no secret of it. In fact, I think speaking more to it than many CEOs would choose to in terms of the impact as well that AI could have. And they continue to seemingly focus on reducing cost overall. I would note, of course, the earnings today are against the backdrop, Carl, of that, as you take a look at some comments from Mr. Sharpe in the press release in terms of their performance. Obviously, that asset cap was such a key moment for them when that was removed.