JPM a Big Bank Earnings Winner, Boeing Shares Slide, Weak Retail Sales 4/14/23

Jim Cramer (0:00)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:07)

Good Friday 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. Something for everyone today. A bumper profits at the banks and some encouraging commentary, but retail sales dropped twice as much as expected.

Six negative reads now in the past nine months.

Even so, yields popped two years back to four. One, our roadmap begins with the bank's health check post SVB, got JP Morgan, Wells, Citi, PNC, all with results, JPM blowing past estimates.

David Faber (0:34)

Plus, it isn't just the banks. Two other big Dow components are also on the move this morning. UnitedHealth is topping forecasts. It raises guidance while we're keeping an eye on Boeing because it has halted the 737 max deliveries due to a supplier issue.

And Bob Iger says he's up for meeting Florida governor St. DeSantis to hash out that ongoing feud about Disney and Boeing.

Carl Quintanilla (0:59)

Let's begin with a closer look at these bank earnings. Not as much turmoil, Jim, maybe as some expected.

Swap's now pricing in 90% chance of a May hike. Is that what futures are reflecting now?

Jim Cramer (1:09)

Yeah, look, when you go through the large banks, which were the huge beneficiaries, every one of those banks in there were just giant beneficiaries of what happened. So if you're gonna base what to do, or if you're the Fed on those five companies, that's completely wrong. It's the 4,995 others.

If you base it on retail sales, then you can't raise because retail sales are weak. If you base it on the idea that we're out of the woods, then you can raise.

Because just because the regionals don't have good earnings, the system is very, very strong. And I think you can do a quarter point. I don't want to do a quarter point because I still want to see what happens with payrolls. I want to see what happens with retail. But these banks signify, if you think there was a problem in the system, don't worry about it. Right.

Carl Quintanilla (2:03)

Is it fair to single out JPM as the strongest?

Jim Cramer (2:06)

JPM's unbelievable.

The net interest income that these guys are making is amazing. But I've got to tell you, I thought Wells was really fabulous. Citi was better than expected.

David, I think that what we're seeing is that there was a period going into the banks where we didn't think there was as much bifurcation. And we just said, banks are awful because of the March crisis. And the answer is there was banks that we haven't seen yet that were awful. Here's what happened if you were in a bank that was big. You got more money in and you made money on it.

David Faber (2:36)

Right, although that is not a secret. We knew that that was happening. We talked about it every single day.

Jim Cramer (2:42)

It was a secret to somebody.

David Faber (2:43)

Well, I guess perhaps there was not quite enough accounting for the increase in net interest income.

Jim Cramer (2:48)

Well, they were as wrong about this as they were going into orange.

David Faber (2:50)

And to your point for JPMorgan in particular, the guidance on net interest income was far better than expectations.

Jim Cramer (2:57)

Yes.

David Faber (2:57)

And obviously on virtually every other metric, they did come in very well. But yeah, 20.7 billion of net interest income, obviously better deposit flows are part of that.

Jim Cramer (3:08)

Well, that was what I'm saying.

David Faber (3:09)

JPMorgan, like every one of these banks, is still dealing with deposits leaving for higher interest opportunities, as we know. I mean, if you keep your money at JPMorgan, you're getting virtually nothing versus what you can still get on a treasury where you can get paid as much as 5% in certain areas. So yeah, that's still happening, but they got a lot more given the turmoil that we talked about every day, every hour for that two week period or so with the collapse of SBB, Signature Bank and the concerns over the banking stream. But no doubt about it. They talk about it.

The CFO says average deposits down 3% in the quarter while end of period deposits up 2% implying an interquarter reversal of the recent outflow trend as a consequence of margin events.

Jim Cramer (3:55)

But the meteorological forecast this time has dropped from... Now it's just storm clouds that are gathering.