by Coinstrooper Crypto Articles
Quick Take
  • Jim Cramer says investors are punishing bank stocks even when earnings beat estimates.
  • Morgan Stanley (MS) fell nearly 3% on Wednesday after its revenue grew 12% and topped forecasts.
  • Cramer attributes the sell-off to worries about sticky inflation and climbing rates, not weak results.
  • Goldman Sachs also beat estimates, yet it lost another 1.5% on Wednesday, CNBC reported.

What Happened

Jim Cramer says investors are punishing bank stocks even when earnings beat estimates. Morgan Stanley (MS) fell nearly 3% on Wednesday after its revenue grew 12% and topped forecasts.

Institutional Securities, the unit combining investment banking with sales and trading, grew 18% to $10 billion.

In contrast, wealth management revenue rose 10%, and client assets across wealth and investment management reached a record $10.5 trillion.

Meanwhile, his Charitable Trust portfolio upgraded Wells Fargo and Goldman Sachs to buy-equivalent ratings, CNBC reported.

Market Context

He expects capital markets to bounce back if that happens.

Therefore, bank shares may keep trading on inflation and rate signals rather than on quarterly beats.

Why It Matters

Cramer noted that fixed income fell short of expectations, and the filing shows a 7% decline.

Bloomberg Intelligence analyst Herman Chan says Anthropic IPO deal flow could lift Morgan Stanley and Goldman Sachs.

Cramer said a resolution to the war in Iran, even an imperfect one, could cool inflation.

Details

Cramer attributes the sell-off to worries about sticky inflation and climbing rates, not weak results. Goldman Sachs also beat estimates, yet it lost another 1.5% on Wednesday, CNBC reported.

Why Did a 12% Revenue Beat Fail to Lift Morgan Stanley?

Morgan Stanley’s third-quarter revenue rose to $20.3 billion from $18.2 billion a year earlier, according to its filing.

Still, Chief Executive Ted Pick told CNBC he is cautiously optimistic about the fourth quarter, Cramer said.

“it’s not easy to own these bank stocks right now.”

Jim Cramer, host of CNBC’s Mad Money, via CNBC

Morgan Stanley is also a lead underwriter on Anthropic’s IPO, which Cramer said is due in November.

Does Cramer See an Iran Resolution Reviving Bank Stocks?

In his view, that would give the Federal Reserve room to back off rate hikes.

Cramer says the group no longer trades as one, because each bank now has different characteristics.

Momei Qu, head of venture at PSP Growth, says Goldman Sachs and JPMorgan are becoming AI stocks. Their earnings do not show that link yet, she told Bloomberg.

The post Jim Cramer Says Bank Stocks Are Hard to Own Despite Strong Earnings appeared first on BeInCrypto.