Cramer: Stress Test Results 'Surprised' Street
The Treasury Department’s “stress tests” showed that many banks were in a much better position than Wall Street had anticipated, reports said on Wednesday. Even companies that did need capital apparently required far less than expected. As a result, financial stocks shot higher.
“I think that the Street is actually very surprised to the positive,” Cramer said during Wednesday’s Stop Trading!.
JPMorgan Chase , Goldman Sachs , American Express , Regions Financial and Bank of New York Mellon needed no new capital, according to test results. However, Bank of America needs $34 billion, Wells Fargo $15 billion and Citigroup possibly $5 billion. These three stocks were up regardless during Wednesday trading.
Cramer pointed to “on the bubble names” like Morgan Stanley and American Express and their better-than-expected capital needs as a sign that Capital One might survive this credit crisis. He also said that the “merge or die” ultimatum facing many banks seems to have faded.
Given the move in these bank stocks, Cramer said he was surprised by the lack of movement in Banco Bradesco . He thinks “the best bank in Brazil” should be doing better considering the country’s growth is in the 30% range.
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