Cramer's Morning Take: Big Bank Earnings 7/18/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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Jim Cramer (0:33)

Jim Cramer here to share with you a sample of my take on the market from today's CNBC Investing Club morning meeting.

Once again, oscillator up. Once again, the yields are slightly down because retail sales were amiss. They are slower. And what that is causing people to do is reassess what they should be buying. And they are buying as amazing as it is. Jeff, another day of the banks going on.

Jeff Marks (0:58)

Yeah, and a lot of that has to do with the good reports we saw from Morgan Stanley, Charles Schwab. But let's focus on Morgan Stanley because that's one we own in the portfolio. Good beat, $1.24 versus $1.15. What I like, the company said they started the quarter with a lot of macro uncertainties impacting the business. But by the end of the quarter, much more constructive.

That's a good cadence there. Brought back in a ton of assets.

Jim Cramer (1:23)

And we should explain to people who are new, cadence is really important, because as you go through a quarter, if the last month of that quarter is very strong, people will then extrapolate to this month.

Jeff Marks (1:36)

It carries over.

Jim Cramer (1:37)

Yes, it does.

Jeff Marks (1:37)

Right, so you definitely want to see the end of the quarter do better than the beginning. That's momentum, but $100 billion in that new assets bringing in over $200 billion year to date.

Jim Cramer (1:48)

That was very impressive, especially even versus BlackRock.

Jeff Marks (1:51)

Sure, and I do wonder with the crisis in the regional banks that we saw in March, if there's a lot of wealth managers that flock to a very stable house as Morgan Stanley. Their goal is a trillion every three years, so they're well on their way.

Jim Cramer (2:08)

Right, that's sticky assets, which means they should get a higher price during these multiples. They're buying back a lot of stock, and the reason why a stock like this is up five is it shouldn't have been at 85

It was a mistake where it was. It's not that it's suddenly so good. It's that it was better than people thought. Now Goldman Sachs is up huge. We haven't seen their earnings yet, but that's very, very telling. Now what I'm most worried about is tech, believe it or not, because tech is already reflecting all the good things, whereas the bank's reflecting nothing but a good look at Squawk.

Jeff Marks (2:37)

Well, right, and not reflecting anything good. We know the IB part of Morgan Stanley's business short. I mean, that was soft. Not a lot of IPOs, not a lot of M&A activity, but that business is starting to trough.

Jim Cramer (2:48)

That's why, one of the reasons I love Morgan Stanley is M&A bad, IPO bad will turn upside.

Jeff Marks (2:54)

Right, it will get better through the year, next year, and with a 4%, roughly 4% dividend before today's move, it pays you as you wait for all that to play out.

Jim Cramer (3:03)

All right, now let me ask you a question. So one of our largest positions, would you be selling the stock soon?

Jeff Marks (3:09)

Yeah, we do own a lot. It is one of our largest positions, as you pointed out. Yeah, I think so, only just to lighten up.

Trim, just because of there's still a lot of regulation facing the bank's way.

Jim Cramer (3:21)

Well, we trimmed some constellations. It just had moved too much.

Jeff Marks (3:24)

Yeah, exactly.

Jim Cramer (3:25)

And we had bought a lot.

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SPEAKER_4 (3:46)

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