Cramer's Morning Take: Wells Fargo 9/13/24

Jim Cramer (0:02)

Jim Cramer here to share with you a sample of my take on the market from today's CNBC Investing Club morning meeting. Let's stop Wells. Wells Fargo, there was a piece came out this morning, shaping one. Basically said that this is new, it's bad, it's gonna cost them a lot of money. It's old, it's not bad, and it won't cost them a lot of money. And I think that we have to recognize, as we said yesterday at the meeting, this is the bank stock to buy, if you want to buy a bank stock, and it was up 20% now, it's only up six, and this story, not a canard, who wants to be in the paper saying all this stuff is happening? But it's been behind the scenes, it's been going on for a long time, not new news.

David Faber (0:41)

So let's explain what happened. So the stock was higher for most of the session yesterday, but it fell, it was down close to 6% at one point, closed down around 4%. This was after the office of the controller of the currency, the OCC, issued an enforcement action against Wells, identified deficiencies in the bank's financial crimes, risk management practices, and anti-money laundering, internal controls. Not completely new news. They actually flagged this in their 10Q in early August, after second quarter earnings, that there was an investigation. So why it fell? There may be some concerns that Wells Fargo will have to invest more in risk controls that could take up their expense outlook, although the CFO was at the Barclays Conference earlier this week, who knew that an investigation was happening at the time. He said he felt comfortable with the expense cut for the year.

Jim Cramer (1:29)

Right, very different from Pinto. JP Morgan dropped not one bomb, but multiple bombs.

David Faber (1:34)

And then, of course, one could argue that this could be a setback in Wells Fargo's timeline to get that asset cap removed. Maybe, maybe not. It's really unclear about it.

Jim Cramer (1:44)

I'm told no.

David Faber (1:45)

It's really unclear about this timeline anyway. No one really knows. Will it be next year? Maybe the year after that. Who knows? But I think it's also important to note that, you know, Wells Fargo, this isn't a Wells Fargo isolated incident. There's also some language in the filings from Bank of America. TD has. And Citi in some of their forward-looking statements. So this could just be a crackdown across the board here. And I think, importantly, Wells is already working on corrective actions. That was in their statement. And, you know, historically, they have been hit, you know, with these enforcement actions from the OCC over the last couple of years, they've been a good buying opportunity every time. So I think we're thinking the same exact, even with the stock up 2%.

Jim Cramer (2:30)

Right. So, I mean, I talked to Jeff this morning and I said, listen, we should go buy some Wells Fargo. We talked about it on Tuesday. And we went over the restrictions at the three-day meeting. Yes, three-day rule. And it's too early. Can't buy it yet.

David Faber (2:43)

But you at home, if you don't own any Wells, maybe you're looking to buy some more. I have some cash on the sidelines.

Jim Cramer (2:48)

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SPEAKER_3 (3:06)

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