Jim Cramer on Goldman Sachs, Wells Fargo earnings
Every weekday, CNBC Investment Club with Jim Cramer hosts a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’s highlights. 1. Stocks rose Wednesday as investors received the second positive inflation report in as many days. Before the opening bell, the June producer price index unexpectedly fell 0.3%, reflecting the large drop in gas prices. Tuesday’s cold consumer price index also benefited from lower energy costs. Jeff Marks, the club’s portfolio director, said these reports took the interest rate increase off the table at the Fed’s July meeting. The wild card here is that oil prices have recently rebounded after the US and Iran exchanged air strikes and the US reimposed a naval blockade of Iranian ports near the Strait of Hormuz. 2. Apple shares traded above Monday’s record high close of $317, up 3%. Jim Cramer said Apple has been incurring high memory costs for the past few quarters rather than raising device prices and still delivering strong margins. If Apple can keep sales strong in the face of recent Mac and iPad price increases and expected increases in iPhones, Jim predicted “you could have a monster quarter.” On Tuesday, KeyBanc downgraded Apple to sell due to concerns that price increases would hurt demand. Jim declined the call, saying, “I love Apple here.” 3. Wells Fargo shares rose 2%, a day after a strong quarter was met with a stock decline. Jim noted the bank’s drive to increase its insurance and mergers and acquisitions business and how CEO Charlie Scharf has downplayed net interest income as an important metric. NII was a bit light in the second quarter. Jim questioned whether Scharf could change the narrative. For now, Wells Fargo is held at less than 12 times forward earnings, he said. Our club member Goldman Sachs had a great quarter for the strength of its investment banking. Jim said Wednesday that Goldman shares “may continue to rise.” 4. At the end of the video, the stocks covered in Wednesday’s rapid fire were: Morgan Stanley, BlackRock, IBM, Conagra and PayPal. (Jim Cramer’s Charitable Trust is long AAPL, WFC, GS. See here for a full list of stocks.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
