Cramer's Morning Take: Bank Earnings 7/14/23

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Jim Cramer (0:27)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club Morning Meeting.

Jeff Marks (0:33)

Now, looking at the market today, our hire, getting more overbought according to the oscillator.

Jim Cramer (0:39)

Yes, and we have to worry about that, but you and I were talking about a new way to look at the oscillator, it's actually an old way I spent at my hedge fund, where we started thinking it was not symmetrical, that you could go to 7% on the upside and not start selling till then, versus being buying at minus five. It's not symmetrical.

Jeff Marks (0:59)

Yeah, I think that when you get more oversold, you tend to get short covering, which is why you might see more of a, just to use the shape of V, in terms of a bounce, a little bounce there, but overbought, maybe it's more chop, more pause, not necessarily a straight free fall down.

Jim Cramer (1:16)

Right, and we mention this, because you know we have that affiliation with the oscillator, and I think people should get it, it's been so great for me over the many, many years, and it is plus five. So normally I'd be a little more concerned.

Now, in plus five, you start getting some anomalies. For instance, Wells Fargo today opens up big, and trades down, the conference call going on now, and then I think it can go back up. But people are saying, okay, look, let's distinguish between different sectors. Banks are bad, other than JP Morgan, banks are bad, we're back into that logic. We have a good story from United Health, but only because it's down so much.

So healthcare's okay. Yes, it's relief rally.

Jeff Marks (1:56)

But the Wells quarter was good, $1.25, nice earnings beat, efficiency ratio better than expected.

What moved the stock higher initially? Well, you had net interest income beat, they've revised their full year target to up 14% from 22 levels, prior guidance was 10%, repurchased $4 billion worth of stock, I think that's way more than what anyone anticipated.

Jim Cramer (2:17)

At a $40 basis.

I think Charlie's back, I've been waiting for this to happen. Charlie Sharf, I've known him for 20 years, I've been waiting for Charlie to be able to assert himself and really get this bank right. I think that most of the things that he had to do are now done, or else he wouldn't be buying back stocks over the rest of it. What do you have to do in terms of cleaning up?

Jeff Marks (2:38)

Well, they're so well capitalized, and I think that's such a great point too, and that comes despite a $949 million increase in the allowance for credit losses, some of that due to commercial real estate office loan.

Jim Cramer (2:48)

This feels a lot like Pepsi yesterday, up two, then barely up, and it finishes up $3.89, that's what I like.

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