Strong bank earnings have changed the tone of the stock market

CNBCs Jim Cramer said Friday, he believes the tenor on Wall Street has been changed by latest slate with greater bank earnings, which gives rays of optimism after a gloomy few weeks for stocks.

“The big banks have changed the tone of this whole market,” it said “Crazy money” host said with reference to the following six companies: JPMorgan, Wells Fargo, Citigroup, Morgan Stanley, Bank of america and Goldman Sachs.

“It’s clear from these numbers that the economy is a much better place than we thought it was, and so are these old dog kennels learning new tricks.”

Cramer’s comments came after all three major U.S. stock indices ended the week in positive territory. The blue chip Dow Jones industrial average, which jumped 1.1% in Friday’s session, delivered its best weekly performance since June. The Dow with 30 shares is now 0.9% below its highest level to date.

The wide S&P 500 advanced 0.75% on Friday while the tech-heavy Nasdaq Composite added 0.5%.

The three major averages are positive so far in October after a harsh September, which is historically a bad month for equities and was again this year.

Now investors are turning to corporate earnings to gain insight into many issues they have been concerned about for weeks, such as the strength of the US economy, staffing problems, inflation and supply chains.

Cramer, who has been cautious in the market, has become more constructive in recent days, and position, which he will follow next week when Netflix, United Airlines, Tesla and Pacific Unionamong other companies are set to report earnings.

“Because banks report first, and because they’re so important to the economy, they set the tone for the entire earnings season,” Cramer said. “Their strength is a huge reason why the market has risen so hard in the last few days.”

Give a Comment