The Dow is sliding amid concerns over surging coronavirus infection rates in Europe and fading fiscal stimulus hopes in the United States.
In the last episode of Mad Money, Jim Cramer said that nearly two-thirds of his charitable trust, Action Alerts PLUS, would do better under a Joe Biden presidency than Donald Trump because of policies towards China.
TheStreet's Katherine Ross and Cramer are on Street Lightning talking about stock market news about buying bank stocks, potential Apple developments under Biden, and future stocks' performance if either Joe Biden or Donald Trump wins presidential elections.
Bank Stocks: Buy or Sell?
Bank of America (BAC) - Get Bank of America Corp Report missed revenue estimates by a few hundred million dollars, posting a result of about $20 billion. It beat earnings per share estimates (51 cents v. 49 cents). Loan loss provisions were about $1 billion, down from $5 billion last quarter.
Like other banks, the stock fell even after a fairly solid earnings report. The yield curve has been compressing and bank analysts note that bank stocks cannot gain momentum until loan demand and interest rates pick up. Bank of America fell more than 2%.
Cramer said that banks are all overcapitalized, therefore they’re not investable and so investors “will have stocks not worth buying.”
He added that even when banks are delivering great earnings, they are still “pathetic and can’t be owned back unless rates are raised.”
Apple Stock: Buy or Sell?
Apple unveiled four different iPhone models, including the iPhone 12 mini, a 5.4-inch model starting at $699; a 6.1-inch device starting at $799, a 6.1-inch Pro model starting at $999, and a 6.7-inch pro model starting at $1,099.
Cramer thinks that Apple needs Biden to win, because "Apple stands to sell more iPhones under Biden than under Trump."
He added that Apple will not hit its sales projects if a president "steps up the Cold War with the Chinese." The new iPhone release could put up overwhelming numbers if Biden is elected, according to Cramer.
Stocks Will Rise No Matter Who Is President
Stocks finished lower Wednesday after Treasury Secretary Steven Mnuchin said reaching an agreement on a stimulus package before Election Day would be difficult.
Mnuchin said Wednesday that House Democrats and the White House remained far apart on certain issues but have been making progress in other areas.
Senate Majority Leader Mitch McConnell said he would schedule a vote on a slimmed-down GOP relief bill for next week.
Cramer said if Joe Biden wins and the country has a united government, stocks will decline shortly and rise back up especially after a stimulus deal is passed that is double what the GOP offered.
He added that if Trump wins and there is a divided house and senate “nothing will get done whatsoever but you’re getting cuts in favor of the market that are going higher.”
Apple is a key holding in Jim Cramer's Action Alerts PLUS charitable trust. Want to be alerted before Jim Cramer buys or sells any stock? Learn more from Cramer and his membership team now.