Sara Patel
TLDR: CNBC’s Jim Cramer outlined what investors should look for when major banks such as JPMorgan, Bank of America, Citigroup, and Wells Fargo report their earnings. Cramer emphasized the importance of metrics such as interest income and net interest margin. He also highlighted the need to pay attention to commentary on consumer and corporate credit. Cramer noted that banking stocks could decline if credit quality is poor, but robust credit could lead to higher earnings estimates for the year. He also advised keeping an eye on financial institutions’ investment banking operations, as there is optimism for a comeback in the sector.
According to Cramer, JPMorgan remains fairly well-liked on Wall Street and its stock may slowly rise over time. Bank of America and Citigroup need a few positive quarters to gain investors’ trust, especially Citigroup after its major restructuring effort. Cramer expressed excitement about Wells Fargo’s prospects, despite recent analyst downgrades, due to the company’s commitment to cost-cutting and technology improvement.
Investors should pay attention to net interest income and net interest margin as these reflect the performance of a bank’s core business. Commentary on consumer and corporate credit is also crucial, as poor credit quality could lead to a decline in banking stocks. Additionally, investors should monitor financial institutions’ investment banking operations, which could contribute to excellent performance if there is a comeback in the sector.
