Stocks were lower Tuesday as investors were discouraged by a stalemate over fresh government aid and bank shares declined following earnings reports.
The Dow Jones Industrial Average fell 84 points, or 0.29%, to 28,753, the S&P 500 was down 0.38% and the Nasdaq declined 0.02%.
TheStreet’s Katherine Ross discussed breaking news in the stock market on Street Lightning. Cramer spoke about the earnings of both Citigroup and JPMorgan as well as the impact of the restructuring at Disney.
JPMorgan: Buy Or Sell?
JPMorgan Chase & Co. (JPM) – Get Report posted stronger-than-expected third-quarter earnings Tuesday as the bank set aside a much lower amount to cover ad loans amid an improving domestic economy.
JPMorgan CEO Jamie Dimon also said the bank could resume its share buybacks in the first quarter of next year, depending on changes to the Federal Reserve’s cap on shareholder returns, which was extended until the end of 2020 earlier this spring.
Cramer said he didn’t see a lot of growth in JP Morgan. “They’re doing well. They’ve got the fortress balance sheet. They’re without a doubt the best bank. But I think they’re not going to have anything near what Goldman has. Goldman is a training operation.”
Citigroup: Buy Or Sell?
Citigroup’s (C) – Get Report earnings for the three months ending in September were pegged at $1.40 per share, down 32.3% from the same period last year but firmly ahead of the Street consensus forecast of 93 cents per share. Group revenues, Citigroup said, fell 6.8% to $17.3 billion, edging just ahead of analysts’ forecasts of a $17.2 billion tally.
Cramer said Citigroup is perceived as being a dark horse. “It yields 4.6%. It has a $71 tangible book value. It’s seemingly impossible that you’re going to have such a bad discount between the book value.
They have spent a lot of money on mismanagement. They did not make a lot of money in their net interest margin. The company is perceived as being a dark horse after being so beautiful. When Jane Frazer, the new CEO comes in she is going to have her hands full.”
Disney Restructuring to Get Rid of ESPN
Disney (DIS) – Get Report said on Monday it’s reorganizing its media and entertainment businesses and named Kareem Daniel as Chairman, Media and Entertainment Distribution.
Content creation will be managed in three groups: Studios, General Entertainment and Sports. “The company’s three content groups will be responsible and accountable for producing and delivering content for theatrical, linear and streaming, with the primary focus being the company’s streaming services,” according to the statement.
Cramer said this is Disney’s way to really get rid of ESPN. “It’s this expensive thing they are having trouble monetizing. They want to have it on Disney+ but people want entertainment on Disney+. There is a belief that we are saturated in sports, that ESPN is no longer integral. Like stocks you watch the teams that you want, you can watch NBA.com, etc they have all bastardized sports and made it so that ESPN is no longer the precious place that it once was.”
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