Cramer's Morning Take: Morgan Stanley 4/19/23

Jim Cramer (0:02)

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

It's an interesting day here because stocks are lower from the start. Again, we gotta keep track of the fact that interest rates are going higher. No one seems to be paying attention to them. They're just creeping up, up, up.

Jeff Marks (0:18)

And we've seen this the last couple of days, sluggish starts to the open, followed by afternoon rallies. Don't know if one will happen again today. That's more of the home stretch material.

Jim Cramer (0:27)

Right, and that includes how I want to handle Morgan Stanley today. I've done a mass amount of work while I've been on air. There's just many, many factors to reach and conclusion yet, without waiting to what when you have the home stretch is a mistake. But I'll tell you this, I think personally just from the statements I made of what we've made and what I said on Squawk on the Street, we've refuted the 86 status, which made no sense given the inflows. But I also want to say, this is a stock that historically would have, will be met with resistance at a certain point here and sellers will come in.

Jeff Marks (0:59)

Yeah, look, it was a beat on earnings, beat on revs, Morgan Stanley, $1.70 versus $1.62. Pretty much strength across the board, wealth management brought in $110 billion of net new assets.

Jim Cramer (1:13)

Is that not the most important metric?

Jeff Marks (1:15)

I think that's the key figure, absolutely, because they're an asset gatherer, they're bringing in new assets, about $20 billion of which, by the way, was related to the regional banking crisis. So it wasn't just purely what happened in March. They were doing $90 billion on their own. So that's great to see, but why is the stock down? I think that's the most important part.

Jim Cramer (1:34)

Well, it was just down a fraction versus where it was.

Jeff Marks (1:36)

Sure, but it was provisions for credit losses were a little bit higher, much higher than expected. $234 million versus $92 million, a lot of that had to do with commercial real estate. They said also their comp expenses, salaries, benefits, what they pay their employees, higher than expected to, and the net interest income number was a little light as well.

Jim Cramer (1:55)

It's not getting in the weeds too much, but when James Corman came on Mad Money, he was talking about interest rates, the Fed funds rate going to four. So that's where that provision of losses was from, using a four.

If you take that to five to six, he then therefore has to take his provision up, basically on the mathematical addition of adding 20% to the Fed funds rate. That's all that was from. It was based on a straight line math situation, not on actual losses, and that's important.

Jeff Marks (2:22)

Yep, and by the way, Gorman on the call saying he is seeing signs of a growing M&A pipeline, some spring-like signs of new issuance emerging, but he still sees that more of a recovery in the back half of 23, full year, 2024 story.

Jim Cramer (2:39)

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SPEAKER_3 (2:52)

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