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Goldman Sachs Could Be Bright Spot in Dismal Bank Earnings, Jim Cramer Says

Wells Fargo, JPMorgan, Citigroup, Goldman Sachs and more prepare to report quarterly earnings. Jim Cramer breaks down what you need to know.

And Just like that, earnings season is upon us once again, and as markets continue to react to surging coronavirus cases, investors are less than optimistic.

Kicking off earnings are reports from the big banks including Wells Fargo, Citigroup, JPMorgan, Morgan Stanley, Goldman Sachs and more.

TheStreet’s Jacob Sonenshine reported that Invesco KBW Bank ETF is signaling a bear market heading into quarterly reports from its key components.

So how is Jim Cramer approaching earnings season?

“Bank earnings are all about loan losses now,” Jim Cramer said. “If the charges are too heavy, then you know you’re in trouble”

Jim Cramer expects Goldman Sachs may perform better than its peers as it doesn’t have the same kind of loan loss from credit cards, unless there is a larger than expected impact from the Apple Credit Card.

If you needed another reason to keep you anxious this weekend, Cramer said the Federal Reserve gave a disheartening clue of what to expect next week when it made the move to suspend stock buybacks and capped dividends following the latest round of stress tests among the major banks.

Following the results of the stress tests, Wells Fargo slashed its dividend for the first time since the financial crisis in 2009.

“I really feel loan losses must be terrible or the Fed wouldn’t have done what it did,” Cramer said. 

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