Big Banks Beat, Microsoft-Activision Deal Closes, Exclusive: BlackRock’s Larry Fink 10/13/23

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Carl Quintanilla (0:31)

Market Moving Insight and Analysis join Jim Cramer, David Faber and me, Carl Quintanilla, on the opening bell hour of CNBC Squawk on the Street.

Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer and Post 9 of the New York Stock Exchange. David Faber is the morning off. Futures are holding their gains despite the worrisome headlines out of Israel and Gaza. You can thank a steady series of beats today. JPMorgan, Citi, Wells, UNH. Speaking of earnings, Blackrock's Larry Fink will join us here after the opening bell. Roadmap begins with the banks topping estimates pretty much across the board. We'll dig into that. The Microsoft Activision deal officially done as Britain's watchdog gives the green light. And Boeing is the biggest drag on the Dow expanding their probe of this production defect on the max.

Let's begin though with the banks, Jim.

Overall, not just the beats, some of the commentary about investment banking efficiency ratios look good?

Jim Cramer (1:24)

Yeah, it's funny because obviously this group came in as cold as I've ever seen it.

What a change from even earlier this week when Pepsi came in hot and then rolls over. I mention that because that was the first big quarter.

These quarters, when you listen to them, you forget how much money they can make in this environment. And then you start thinking, you know what, these things are seven, eight, nine, 10 times earnings. And they're trading like steel mills. And they're really filled with a lot of smart people who are doing a lot of good things who show you they can make a lot of money without underwriting, without M&A. So there's kind of gonna be a bit of a revaluation here, recognizing that this group had become, really went to the bottom of the list of what people wanted to own. And now you're starting to think, wow, you know what, they have good efficiency ratios. They're making a lot of money in a very difficult environment. What happens if the environment gets better? And I think the stock, JPMorgan when I came in was down 70 cents. So I'm like reading it all in a vacuum and I'm saying, well, maybe I don't see anything wrong. And then in the comp school, they come on and they come on like gangbusters with caveating things that we all, the caveat international problems.

They're making a lot of money. Now let's see if it lasts. I mean, I happen to like Charlie Sharp, my travel trust owns Wells Fargo and I saw the stock was up and I said, well, I mean, that's gotta be an error.

I mean, you're kidding me, but then Charlie bought back a couple of million shares, but what he did was have his expenses down, his revenues up. I mean, it's kind of a classic form of what you're supposed to do. And I think that Charlie, I know Charlie doesn't come on. I wish he would. I think people need to know who Charlie Sharp is because Charlie Sharp, while he can be very dogmatic about like say, your matters, he's delightful about banking.

Carl Quintanilla (3:19)

You know him well. That is sort of the running theme. Citi's another good example where revenue growth outpaced expense growth, even the guidance, Jim, on net interest margin for the coming quarter or net interest income, better at PNC, above consensus at Wells.

Jim Cramer (3:33)

They're supposed to be terrible. Now the estimates came down, down, down, down, down. And these companies are supposed to do very poorly at this point in the yield curve, at this point where the Fed is.

And I think that what people have to start recognizing is these companies are very lucrative.

They've not been viewed as that.

And they'll use their one day wonders. You'll have a quarter where Wells will go up and then maybe on Monday, somebody will raise numbers. And by the time we get to Friday, just move on. Maybe this is a new benchmark of recognizing that in a really horrible environment, they made pretty good money.

Carl Quintanilla (4:09)

How do you square all of that with, as you mentioned, Diamond's comments specifically about the world and this comment that the world may be more dangerous today than it has been in decades? And then ongoing complaints about Basel regulation and geopolitics, Ukraine, now Israel.