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Cramer: Citigroup and Goldman Sachs Have Further to Run
Posted at 9:11 a.m. EDT on Friday, Nov. 25, 2016
I would contend nowhere near remarkable enough. Here's why. Right now, the stock of Goldman Sachs is at $212. But in June 2015 it was at $219.
Right now, Citi is at $56 but in July 2015 it was at $60.
Almost every other bank has taken out those highs from last year. Most are truly up, up, and away from back then.
Yet Goldman Sachs and Citigroup have a lot more going for them now than they did back then.
First, we are far closer to the multiple rate hike scenario now than we were when they took out these levels last. Both companies have tremendous leverage to the short rates, less than Bank of America (BAC) , JPMorgan (JPM) or Wells Fargo (WFC) , but totally additive to share.
Second, Goldman Sachs is often considered to be the biggest loser under Dodd Frank because it severely limited what it could and couldn't do with its capital. I have always thought that Goldman figures it out no matter what, it just takes some time to adjust. Now, it has not only figured it out, but it has cut costs dramatically just when revenues are going to increase and regulation is going to slow or be repealed.