Big banks kick off earnings season, risk persists
Goldman Sachs: Cramer never thought he’d see the day when the cheapest bank stock would be that of his former employer, Goldman Sachs, which will report earnings Wednesday.
“A lack of growth combined with some disturbing news from a troublesome Malaysian transaction … has devastated the stock,” he said, adding that his charitable trust has been growing its position in Goldman’s stock.
“I do think it’s too cheap to ignore,” he said. “However, if they don’t at least try to quantify the damage from the Malaysia scandal, even a good quarter might not matter.”
Bank of America: This bank, on the other hand, could surprise to the upside on Wednesday with its quarterly results, Cramer said.
“I think BAC might surprise us given its gigantic asset base and the money it’s making off your deposits as the Fed funds rate goes higher,” he said. “CEO Brian Moynihan has made this bank more profitable than ever — and, by the way, he’s very digitized — but, like all the banks, it needs permission from the regulators to reward shareholders with larger dividends and buybacks.”
CSX: Former CSX CEO Hunter Harrison, who passed away in Dec. 2017, set this railroad operator on the right track, Cramer said ahead of CSX’s earnings report on Wednesday.
He “introduced discipline to an operation that seemed to have been … unruly in retrospect,” and now, “there’s been nothing but upside here,” the “Mad Money” host said. “I bet that trend continues.”