Jim Cramer said Friday he believes the tenor on Wall Street has been altered by the recent slate of major bank earnings, providing rays of optimism following a gloomy few weeks for stocks.
“The big banks have changed the tone of this entire market,” the “Mad Money” host said, referring to the following six firms: JPMorgan, Wells Fargo, Citigroup, Morgan Stanley, Bank of America and Goldman Sachs.
“It’s clear from these numbers that the economy’s in a much better place than we thought it was, and so are these old dog institutions that are learning new tricks.”
Cramer’s comments came after all three major U.S. equity indexes finished the week in positive territory. The blue-chip Dow Jones Industrial Average, which jumped 1.1% in Friday’s session, turned in its best weekly performance since June. The 30-stock Dow now sits 0.9% below its all-time high.
The broad 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 rough September, which is historically a bad month for the stocks and was again this year.
Now, investors are turning to corporate earnings to get insights into many issues they’ve been worried about for weeks such as the strength of the U.S. economy, staffing problems, inflation and supply chains.
Cramer, who’s been cautious on the market, has turned more constructive in recent days, an attitude that he’s carrying into next week when Netflix, United Airlines, Tesla and Union Pacific, among other firms, are set to report earnings.
“Because the 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 rallied so hard for the last couple days.”
