BofA and Goldman Sachs Earnings Reaction, Musk on AI, Nvidia's Double Upgrade 4/18/23

Carl Quintanilla (0:00)

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 Tuesday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange. Stocks taking aim at a two month high near the best closing levels of the year as Goldman, B of A, J and J roll in. Europe's near a 14 month high as China's eco data is stronger than expected. More chatter about global economic resilience. Our roadmap begins with a mixed picture for the banks though. B of A tops estimates.

Goldman does deliver this revenue miss dragged down by its market loans.

David Faber (0:35)

Plus Elon Musk's AI warning, saying it has quote, the potential of civilization destruction. And Apple's big push for a new generation of iPhone users beginning in India today with its first store opening in that country.

Carl Quintanilla (0:50)

Let's begin though with market reaction to the earnings from B of A and Goldman, Jim. Is it as ugly a beat on Goldman as they say?

Jim Cramer (0:56)

No, it's not. Look, it's a $66 million revenue miss when you back out. And this is these really difficult provision you have to take for the market's loans versus selling the loans. It's their smaller investor loan package. And that some people are saying, listen, they're fixing them, they're trading.

Not is very big let down. No, no, last year at this time, they had the best single quarter in history. So you're up against very difficult compare. This is actually a top decile quarter from when they've come public for FIC.

Did they blow the revenues away? Absolutely not. Did they miss by as much as people are saying?

David Faber (1:34)

No, although fixed income currency and commodities was down 17%.

Jim Cramer (1:38)

Yeah, but that's against the huge quarter.

David Faber (1:40)

It is, but it was still down more than any of the analysts who follow the company had anticipated. It was still down more certainly than JP Morgan saw or any of its peers, Jim. Remember, this is not an in-bank though. And it's not being taken as a positive, I'll tell you that.

Jim Cramer (1:54)

No, I'm just saying that, look, the stock's gonna be down a lot today. Is it gonna stop down 12? I don't know. I'm just saying that Goldman, this was not a great quarter for Goldman in part because of the way Goldman's billed as a company.

It's not an in-bank, it's not, you know, look at net interest income. Was wealth management what I like? I mean, every little blind was a little, it's not great. It's just that this stock's gonna be down maybe 15

And I'm interested in it at that level.

David Faber (2:20)

Why is that? Sorry, Carl.

Jim Cramer (2:22)

Well, I mentioned it because I had something. Okay, I'll tell you why. And this is apropos of where I feel about some stuff I'm gonna say about Brian Moynihan. I just don't think you could have as bad a quarter for the businesses that Goldman has than they had this one. I just think there's investment advisory, M&A, IPO, are really, what I think, what I'm just gonna say are cycle lows.

I think they're cycle lows. And if you think that, then Goldman's kind of interesting down 15

Carl Quintanilla (2:50)

I'd be down 26 That's a lot. Operating expense is up nine when your revenue's down five.

Jim Cramer (2:56)

The efficiency ratio is not good, because the revenues are lower than they should be and they have some room there. By the way, look, if you want efficiency ratio, the one that you should be looking at is watch how Wells's efficiency ratio, which I like efficiency ratio as a way to view these banks. Wells's efficiency ratio is so inflecting, it's perfect.

I love that.

Carl Quintanilla (3:16)

Really? Faster than cities?

Yes.

Jim Cramer (3:20)

Wells is really, Charlie Schrupp did a big bond offering last night. He's getting a little bit above the 10

David Faber (3:27)

Yeah.

Jim Cramer (3:27)

But Wells is good, man.

David Faber (3:31)

No, I know. You came out of the quarter saying it was good. The market kind of disagreed with you a bit.

Jim Cramer (3:35)

And then yesterday lapped my view up like a, you know, like a Labrador retriever.

David Faber (3:39)

And we'll see whether over the next few days Goldman sort of reverses the way you think it may. Oh, I just think down 15 People don't like the comp ratio either, saying it was a little, the comp ratio was a little higher.