 Hi everybody happy Friday. We are on the floor of the New York Stock Exchange with Jim Cranberto talk about the markets and bank earnings Jim let's start with Wells Fargo, you know that people are just saying we don't care I did a piece last night About the bank stocks and saying it's gonna be really hard to understand their numbers But you need to know that interest rates are going higher net interest margins going to go up The loans could increase because of the change in the tax code Their earnings are going to go up Bottom-line earnings because it changed the tax code And that's enough. These are being viewed as 12 quarters literally 12 quarters versus what's about to occur and I am surprised that Wells is up. It was not a good quarter They had very bad efficiency issues people are going to say that's going to go behind them I'm surprised that given how bad fixed income trading was for JP Morgan much worse than we thought that people are Overlooking that now. Do I like Wells here? It's 62 63. No Travel Trust bought JP Morgan now what looks to be an advantageous price Any week this JP Morgan because I don't think the analysts can do anything other than raised numbers and you want to buy it So is this the year for the banks? Well as she was good yet the banks this year can be good again because even after all this after the tax reform They're selling at 13 times earnings and that makes them a very compelling group The only groups that are really beneath them in terms of price earnings multiple Are the auto companies which are you know hobble hobble by the structure will change the industry And then the airlines which are around nine ten times early So you're really dealing with a very low price journeys both a group and a market That's about to tell 26,000 so it's a magnet for capital Yeah Well, and we hear about how bank earnings kind of set the tone for the rest of the earnings They do and the reason they do is because you can only imagine that the world revolves around finance and if finance is booming That means that there's going to be that's just a reflection on how strong the economy really is and if the economy's really strong The fake can raise rates and that's good Just feed into the net interest margin, which is now going up JP Morgan big net interest margin So there's a lot to like going forward Obviously it you would love to them you would absolutely love them to say okay look here's the deal absolutely here's the deal you want very much to Great we're gonna raise dividend big buyback stock big but they can't because that needs the Fed's approval And they don't want to be in front of J pal saying whatever they can to be able to make it so that you buy their stuff You buy their stock ahead of when Jay takes office So they're being prudent about that and I really think that's good. Okay, Jim moving on IBM CFO Martin shorter Who's you you've had on air. He's moving off that role Yeah, now it's important for people to recognize when the news came out a lot of people told me hey your guy Martin's in trouble He got demoted. It's just the opposite. He's been in finance Nobody who runs finance is going to be able to take over a company that's driven by engineering and sales He will move over to the be ahead of sales who had that job of many years ago was Jenny Rometti That's a natural switch. So Martin is going to be is he going to be groomed. Is he being groomed? I think yes, but Jenny's not going anywhere. I think the quarter is going to be excellent excellent And I've been behind IBM ever since I knew that the main frame was going to come back In Q4 and that the stock was really going down because everyone was scarring away from it because Warren Buffett was abandoning it So I feel very good about and they report earnings next Thursday. Yeah, and I think the quarter is going to reflect the main frame I hope Martin still run the quarter. He call he did Martin does a great conference call. He's total stand-up Meanwhile, Jim JP Morgan and RBC upgrading calls. What did you think look? I think this is really important I did a piece yesterday for real money saying not only is Cole's cheap this Matthew boss upgrading it now It is up 50% from the trough, but I close it thought that Nordstrom should use this moment I said it last night and I wrote about it should use this moment to resume the talks to go private and within the last few minutes They have so that's very positive and just on calls you had the CEO on mad money this week It was interesting to see him praise Amazon. Yeah Well, they're good partners and people don't seem to realize that and one of the reasons are really good partners They're doing a trial is because they're strip malls So it really makes it easy to buy a mine and pick up in store and they they want to partner with a lot of other Companies I continue to think that Macy's is going to begin to partner with other companies Maybe turning the Harald Square store into what I regard as being like Coteve Which is an amazing place in Berlin where each floor is a little bit different and I think it could happen to Macy's I continue to like that stock I like Nordstrom based on the idea that they should they can it should go private I think retail is very good here. All right Jim. Who do you have coming up tonight on mad money? I have a alder bio Alder is all about I got involved in this talk when it's 1012 and saying look I was too early, but I think it's going to work Anybody who has it migraines are big and they have a migraine drug and it's really important Allergan is a migraine drug too But as you know, I'm keeping Allergan on a tight leash as I said In our in our monthly conference call, which was the best attended in a year Thank you very much club members. Everybody should join it and then I have an ethical faraday, which is a It's kind of the new world that it's a experiential clothing company. It's private One guy came from Ralph Lauren two brothers twins the other guy came from finance It's one to watch because I think they've got a very good business model, which is lifetime guarantee on clothes Huh, all right. That's tonight 6 p.m. Eastern on med money and Jim before we go a big weekend for the eagle Yeah, no, I mean the Eagles are underdog by the equivalent of a touchdown Which is rather more cold because you should be getting four having to give Atlanta four But let's forget about the line for a second. There's a very good video if you share my enthusiasm for the team That is on the Eagles website. This is a team that has now gotten motivated by the line now What are the what are the Falcons have they have Julio who is with Antonio not doing that? Well, maybe a guy who's just simply can't be covered and in the last four weeks their defense got very very stiff So you you have Matt Ryan you have a team playing Overs head in order to get back into the Super Bowl to win this time after the embarrassment Against a very lunch pail team that obviously lost its MVP quarterback And as a quarterback that played well Nick foals against the Giants He played well against the Rams and then has been horrendous The best for the best third down conversion now the worst third down conversion So it's gonna have to be the defense that steps up and what they're gonna have to do is open the game with passes to Nelson Aguilar and to Alshon Jeffrey not to anybody else including Earth's as much as I love them But certainly not the Tory Smith get that get the jam up in the box in order to be able to make it so that They can then do run and then just give the ball to a jahi. There's the game plan that I have I've shared that with Matt We wish you luck this weekend Jim and I are gonna continue the conversation on actionalartsplus.com more stocks to talk about We hope you join us