Market Rally, More Banking Beats, UNH Results, Bessent Hearing Day 1/16/25

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Jim Cramer (0:24)

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David Faber (0:26)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:32)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber, Sara Eisen, a Post 9 of the New York Stock Exchange. Cramer has the morning off. The stocks do look to add to Wednesday's gains. The best day since just after the election, even with some weakness on the Dow thanks to UNH. Bulls getting some help from semis, financials, some steady bond yields in the wake of solid economic data. Our roadmap begins with banks looking to build on the rally yesterday. B of A and Morgan Stanley both with some quarterly beats.

David Faber (0:58)

Also on the earnings front, shares of UnitedHealth Group are moving lower. This after the medical loss ratio at the company was higher than had been anticipated by many analysts. It is the company's first quarterly report since the CEO of its UnitedHealth care unit was murdered.

Sara Eisen (1:14)

Plus, the Trump transition, Scott Bessent, the President-elect's pick for Treasury Secretary, goes to Capitol Hill for his confirmation hearing. We will bring it to you live.

Carl Quintanilla (1:24)

Let's get right to the markets and these bank results following that massive rally yesterday. David, everybody goes right to the increase in investment banking fees, 46 percent yesterday at JPM. But today, 44 at B of A.

David Faber (1:36)

Yeah, not bad at B of A. Although you're seeing a more muted response, at least obviously we haven't started trading yet in the shares of both B of A and Morgan Stanley in terms of least response. But yesterday, as you guys well know, was a very strong day given strong numbers from many of the banks. And obviously a tamer than expected sort of report on inflation there that helped the market overall. But you can see that did top estimates. And listen, there's a lot of optimism as this year begins, Sara, in terms of M&A, IPOs, capital markets overall. They're just, there is. It will be interesting to see whether it is met. Certainly when it comes to M&A, which I tend to still remain fairly close to, there is an awful lot of chatter and expectation and does seem to be a lot of potential deal making to come or at least announcements to come. But again, sometimes it can be more difficult to get to the finish line regardless of whether there is a more forgiving antitrust environment, as of course is one of the key reasons why people do believe there will be more because of that.

Sara Eisen (2:48)

Deals, but also revenue growth more broadly in some of the banks. A lot of the banks beating on revenue growth on all lines and proud of that. We saw that in Citi today. We saw that in PNC today, although that stock is interestingly down because I think the market hoped for more on guidance. Loans, not as strong, but overall I think what the banks are painting a picture of is a pretty friendly operating environment. Yes, it's for investment banking, as David said, but also people are paying back their loans. The credit quality has been good overall. Some of these profit numbers are very high because they don't have the FDIC fee that they had to pay. Remember, they had that sort of assessment in the last one, but overall just pretty good fee growth, pretty good. You know, even Bank of America showed net interest income growth, which not all of them have showed as the changing interest rate environment sort of plays out. And banks do have to pay up a little more for deposits because rates remain elevated, but they're clearly dealing with that very strongly. Every source of revenue growth increased, according to Brian Moynihan, and we saw better than industry growth in deposits and loans.

Carl Quintanilla (3:58)

Yeah, credit quality, net charge-off's pretty well behaved across the board here. Interesting, though, you mentioned loan growth and credit card loan growth only up one at B of A. Diamond kind of got to this yesterday, whether it's about caution ahead of would-be tariffs, deep private liquidity, just economic uncertainty. Caution, that's gonna be one to watch.