As the stock market processed the big banks’ earnings reports on Friday after stocks pared their earlier losses, CNBC’s Jim Cramer was doing some processing of his own.
In particular, the “Mad Money” host was considering J.P. Morgan Chase & Co chief Jamie Dimon’s comments on the bank’s post-earnings conference call, in which he warned of potential geopolitical turmoil weighing on economic growth.
“If rates go up because you have inflation, that is not a plus. That is a bad thing,” Dimon said. “So far, we still have a strong economy in spite of these increasing overseas geopolitical issues bursting all over the place.”
For the longtime banker, “Brexit, Italy, trade, reversals of [quantitative easing], Turkey, Argentina, Saudi Arabia” all posed potential threats to the welfare of the global economic layout.
Even though Dimon’s comments weren’t as negative as some other voices in the market, Cramer was surprised how things had changed since his interview with the J.P. Morgan chairman and CEO in late September.
“This marked, I thought, a major change versus the ebullient Jamie Dimon that we interviewed in Philadelphia just a few weeks ago,” Cramer said. “While Dimon still thinks our economy’s going strong and he’s making a ton of money for shareholders, it’s strong in spite of these issues, which is why he warned that the market may not take it well if the Fed keeps raising rates.”
Calling the remarks “a buzzkill,” the “Mad Money” host insisted that Dimon’s words, and not J.P. Morgan’s quarterly results, were what led the bank’s stock to close down 1.09 percent on Friday.
And while Dimon’s message was “not encouraging,” it didn’t make the stock of J.P. Morgan any less attractive, Cramer said.
“J.P. Morgan is still best of breed,” he said. “I bet, a week from now, it makes up the losses it endured in its stock today and clears $110 from its current near-$107 perch.”
If anything, Dimon’s warning underscored how all investors should be approaching the increasingly volatile market, the “Mad Money” host said.
“Jamie Dimon’s surprisingly icy commentary about trade … only reinforced my belief that we need to be very careful here, even as the stock’s way too cheap to ignore at this point,” he concluded.
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