Investors Wrong About Citi’s Quarter
Wall Street’s reaction to Citigroup’s latest earnings report, with the stock off about 5 percent on Tuesday, was unwarranted, Cramer said during “Stop Trading.”
While investors reacted to weaker trading numbers from Citi , Cramer said he was “impressed” with the bank’s international business and Citigroup Holdings, the so-called bad bank that houses the company’s worst loans. The “Mad Money” host admitted that Citi’s expenses were higher than he’d anticipated, but still claimed the bank was “so on track.”
Also, the stock over the past two years has typically declined an average of 7 percent following a quarterly report, and that after a big run-up heading into earnings. Citi now is following that exact same pattern, Cramer said, which makes him less worried about the stock’s decline.
Cramer also noted that Citigroup was unlucky enough to follow JPMorgan Chase'sreport last week, which he called “magnificent.”
“If this company had reported before JPMorgan, it would probably be down about, maybe, 8 cents.” JPM reported “magnificent” quarter last week.
Other banks that Cramer said he was watching were Bank of America , Goldman Sachs and Banco Santander . He predicted investors may react to BAC much as they did Citi, but he’s still bullish on both of them. Goldman should report a strong quarter this week, he said. And he disagreed with the heavy short position in STD, saying the bank was a great play on the Europe’s coming turn up.
“This is the winner, not the loser,” Cramer said. “I like Santander.”
Cramer also told viewers that he will unveil a new price target for Apple on Tuesday’s “Mad Money.” Whether Steve Jobs is at the helm or not, he is still very bullish on this company.
Lastly, Cramer pointed to the weakness is gold, something he predicted would happen during the first month or so of the year. He thinks demand for the precious is a secular theme that will continue to drive the price, and the related stocks, higher, though. This pullback is a typical digestion of the previous move, Cramer said, but another move is on its way.
“So wait it out,” he said, “and then do some buying.”
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