Jpmorg and citigroup all beat wall st expectations. But profits were down across the board, year over year. That was enough to lift the broader market, but not shares of all the big financial institut. D thats partly because. Uestion sti remain about the and, of course, a lot of attentn was on embattled wells fargo. Which said customer traffic at branch was down in the wake of the fake account scandal. And fewer checking accounts wer. Repor john stumpfs final quarter as ceo at wells fargo, profit dropped 2. 5 . E that the nations thi largest bank wasn all bad. Despite charges the bank opened as many as 2 million accounts with either fake or unauthorized customer information, profit was still higher than expected. And revenue rose more than 2 also, more than analysts predicte aftereffects of the sale scandal, a 185 million settle stumpfsouster, still to be felt. Sloan already looking at reduced business. The implications for our compan and on the trust of our custom are significant. Customer visit with bankers in our branches, a subset of overal customer traffic, were down 10 in september, compared with the yea the lower level of interactions in september was driven by lower internal referrals, decreased produc off and reduced marketin repor Jpmorgan Chase said on its Earnings Call it too has identi problems with its employ crossselling. But that it does not think the proble are systemic. The nations largest bank said both profit and revenue beat expectat profit was down from a year ago, mostly because of a onetime tax benefit las year. Nd revenues were up more than in part, because of equity trading fees, up by a third. At its Investment Bank had a record quarter, with fees jumping 15 . Fixed income trading was also up, a whopping 48 . Thanks to a rush of activity after the u. K. s june brexit vote. Citigrou is recovering from past legal scars. It too saw jumps in trading and invest banking revenue. Overall, citigroups earnings beat forecasts for both profit and revenue. Though profit was down 2 from a year ago, and revenues were down 5 . Still, investors tend to smile when earnings reports beat forecast the reports have all been positive. We are seeing is that the money center and the Capital Markets revenues are really pushing citigroup and jpmorgan higher. We a seeing the momentum of the overall just markets and the activity were seeing there should rise all tides for all these Money Center Banks today and then next week we see further releases. So here to give us more analys on those Bank Earnings and his take on the sector as a whole is Eric Wasser Strom at guggenhe partners. Ni to have you here. Thanks having me. Taken as a whole, were you pleased wit what you saw from the major banks . Well, generally, i think the news was a little bit better than expected. I would say netnet, more good than bad. In particular, what we saw was loan growth was stronger than we were forecasting, and i think several analysts, including myself, thought that looking at e data over the course of the quarter, coue uneven. And as you mentioned in your piece there, the Capital Markets. Were stronger than and bad loan costs were remained low. So i think those are the positi points. And those ts combine to offset higher costs than most of us were looking for at these does the loan growth that we saw almost pretty much across the board, does that poretend a better quart next time around or not necessarily . It certainly may, because to the extent that an asset is put on a banks books in this period, it will continue to genera earni over the course of its life. But in terms of the growth rate, i would say its a little bit too early to know, but certainly the initial signs were more positi than we thought, certainl let me turn you to wells fargo. I know that there is still a lot of costs and we heard from the new officials over at wells fao on various news outlets today. The legal cost issue seems to really be kind of not necessar wei on the share price, but it certainly is an overriding c yeah, thats exactly correct. And i think it isnt just the legal cost, but also the implic for their business model, which clearly in some form is going to need to change inside its Retail Banking business are the two concerns. How much ultimately will they have to spend on litigation and regulato res in other words, fines. And what doe it mean for their goforwa business. What about the changes that they have made. Mr. Stumpf, as we mentioned, has left. Mr. Sloan in position now, part of old guard. And there are those who are not satisf with his appointment to that particular post. How do y it . Well, i think that theres i guess i would say i share some of those concerns. On the one hand, i think what tim articulated today was a very robust attem to fully assess and remediate the issues, and he acknowle, i think, at leas implicit if not explicitly, th was, in fact, a systemic issue, which was a characte that john st resisted. But i think that i shared the concer that not a Single Member of the Management Team is is new. They all come from inside the existi organization, including the new head of the Retail Banking business. And i think, you know, i wonder to what extent maybe new blood might a benefit. Of the banks that reported today, quickly, eric, which do you holds the best inve well, the one that i like the best is citigroup, and i think what you saw today was that their growth and their consumer bank, particularly outside the states, is beginning to turn, which i think will be a mediumt benef to their earnin. Eric, thank you so much for joining us. Well lee it there. Thank you. Eric wasserstrom with guggenhe important. The new ceo at wells fargo not enoug for the state of ohio. It joined a growing list of states suspend busines over the fake accou scandal. Governor john kasich said hes barking wells from particg in state offerings and financi services contr. On wall street, stocks paired their gains after the bankled rally lost some steam midday. Not only did investors have to parse through Bank Earnings, but had to decipher comments from some fed officials. The Dow Jones Industrial average rose 39 points, it had been up more tn 150 earlier in th and the nasdaq and the s p 500 rose just a fraction. And despite todays gains, all three major indexes were lower for Household Spending increased in september by the most in three months. The Commerce Department reports that sales at Retail Stores climbed. 6 from the prior month. Matched expectations and it. Ollows a slight decline in auto dealers and gas stations sa the biggest gains. Separate prices rose more than ed last month. A sign that inflation could be firming. E Producer Price index, which measures changes in the price compans recei for their goods and services was up. 3 . Meantime, Consumer Sentiment has unexpectedly dropped. It fell to a oneyear low in october, as americans outlook for the economy turned negative. The university of michigan said the decline may be partly due to the contentious presi. In theory, the more upbeat the consume e the more they will spend. An thas important for economy, since spending accounts for about 70 of economic. The head of the boston fed says december may be an approprie time for the federal e to increase interest rates. Eric rosengren favored raising rates at the Central Banks last policy meeting and in an interview today, said his views have not cha my hope is that we do it slowly and gradually. But that the longer we wait, the more likely it is that were going to have to do it more quickly. Obviousl you dont set Monetary Policy to one asset class. But i thk its symptomatic of what happens when things become less sustainable. Whether it shows up in inflation or asset prices, its a little bit hard to determine. But thats why i would like to have an economy that is at a sustaie unemployme rate over a long period of time. So we can make sure we have as long a recovery as possible. In a separate speech, the head of the new york fed, bill dudley, said he would expect a rate h occur this year. In washington, senator Elizabet Warren is calling on presid to replace the chair of the securities and exchange in a letter, senator warren writes that Mary Jo White has corporations to new rules disclose det of their politi spending. Eamon javer is in washington fo the story for us. Good to see you, eamon. Hi, sue. President oba is not likely to fire his top financial regulato three months before he leaves office. So whats behind this letter . Well, democrats in washington are looking at the polls in the presid race, and they have decided hil is likely to be the next president of the united states. If thats the case, the battle to shape that Clinton Presidency is on right now. So think of this letter from Elizabet Warren more as a shot across the bow to the clinton team saying, hey, we on the politi left, the sort of bernie s wing, Elizabeth Warren wing of the democratic party, we want to make sure were putting some markers down about what we want at the s. E. C. And we dont want Mary Jo White to continue to be the cha. And remember, theyre also a lot of democrats who really mistrust hillary clinton, think she is too close to wall street and think that Mary Jo White is also too close to Corporate America and wall street. So there is this left versus center left debate going on. If mrs. Clinton is elected presidt in november, how much influe would she have over the s. E. C. And do we know anything abo her relationship, if any at all, with Mary Jo White . Well, shes going to have a lot of influence. She gets elected, there are typicay fiv commissioners on the s. E. C. Right now there are only three, though, because there are two vacation that means if you had presidt hilla in january, you would be lookin a president who gets to a point, two s. E. C. Commissioners and contro the chairmanship. Typically, the chairman will resign if somebody from the other party comes in. In this case, somebody from the same party coming in. But presumably, hillary c could lean on Mary Jo White if she wanted to. Mary jo whites term runs until 2019. D hillary c and her staff presumably right now are working thr a list of transi with their transi team of who is going to take which position in washin if she wins. You would imagine theres a lot of dealmaking being made behind the scenes. This letter that we saw that was released at 6 00 a. M. This morning may just be sort of a public indication of some of that behind the scenes dealmakg we cant see. All right, eamon. Thank you smuch. Eamon javers in washington for tonight. Still ahead, will netflix big investment in original content pay off for investors when it reports its earnings the u. S. Government has issued an emergency order that bans all Samsung Galaxy note 7 smartpho devices from all flights. And the order comes as samsungs losses continu to mount. Today the company put a number on what the discontinuation of its fl gal note 7 smartp will cost the company. The total . 5. 3 billio earlier this week, samsung flash slashed its Third Quarter profit forecast by more than 2 billion. Y it forecast a further hit of more than 3 billion for the six months through march of 2017. Samsung says it has enough cash from other businesses to absorb the cost of that phone recall. Netflix is one of the major earnin reports that will be released on monday, and invests will be watching to see if its growing investment in original content is starting to pay off. Julia boorstin has more. Repor just ahead of its second earnings report, netflix announcing a big deal for chris rocks next two comedy specials. His first in eight years. Theyll tape next year following his world tour. Netflix reportedly paying 40 mill the two shows, which analysts say is likely a record invest in comedy specials. 40 million has to be seen in the context of the 6 billion netfli is spending globally on content. If youre spending 6 n on all kinds of shows, maybe it can throw 40 million to chris rocks w and is it doesnt really affect your p l and maybe turns out to be a good invest for netflix. Repor rock joins a number of critically acclaimed comedi on netflix. Furtheri its reputation as a destinio for comedy. And netflixs win is a loss for rival, hbo, which has a 20year histor with chris rock, airing his talk show and previous comedy specials. This investment in chris rock is part of netflixs overall plan to have 50 of its content be original programming, as hole wood studios looks to distribute their own content more directly. There is definitely this separa happening between netflix and the studios. And i thin netflixs perspect theyre trying to positi this as a positive in their evolution theyll have unique content you cant get elsewher and thats really what viewers are most interested in now. With amazon and hulu also ramping up investment and hbo going direc to consumer, industry barry diller said earlier this week, he still thinks netflixs strategy can they dont really make very much money. But theyre going for a much bigger and so eventually, it will work out so that the economics work out. Thats a fantastic model. They will they are, quote, winning. I cat see them ever losing. Repor well see money if netflix inv in original inc this summers hit, stranger things, helps lift subscriber numbers. For nightly busi report, m Julia Boorstin in l salesforce says it will not bid for twitter, and thats where we begin tonights market in an interview with the financl times, salesforce ceo marc b s social media compa was not the right fit for the Cloud Computing giant. Last week, reports surfaced of several compani dropping their intere for twitter, with salesf remai the only potentl suitor. The news september shares in differt directions. Twitter was down 5 to 16. 88. Salesfor popped 5 to 74. 27. Ariad pharmaceutica came under pressure after one of its treatm caugh the attention of former president ial candidats tweeted, quote, drug corporat, greed is unbeliev. Ariad has raised the price of a leukem drug to almost 199,000 a year, end the drugmaker had hyped the pr cancer medication six times since 2015. Shares plunged nearly 15 to 11. 14. Beverage giant, pepsico may be eyeing cavi it ta. Pepsico, which already owns a Minority Stake is nearing a deal to take over the company. A potential deal, which is not guarante, ce finalized this month. Pepsico shares rose nearly 1 to 106. 83. And hershey says its will retire from his role at the chocolate c next summer. Is expected to stay on as nonexecu chairman. Hershey shares up 78 cents to 96. 43. As earnings seas up, a lot of attention will be paid to the industrial sector. The group is watched closely because it sells products across a lot of Different Industries in a lot of countries. D it is often vutd as a proxy for the global economy. A handful of large global industri rep earnings in the coming weeks and have already in some cases issued downbeat guidance. Morgan brennan has tonights sector spotlight. Honeywell in the spotlight with david cody appearing on cnbc thursday night to elaborate on the companys lowered sales and pr forecast. Yes, i wish i included a lot more of this stuff. I gave c for people unders what our longterm profil i was wrong. This is one where i could have done a significantly better job of communica this story. And we tried to do it in the context of 2017 is going to be good. Bu it seemed to get totally lost. Honeywell has blamed a softenin business market, as well a oil and gas, which cody believ bottomed last quarter. An honeywe is not alone. Other companies, including dover and ppg, have already lowered their finan targets, citing the weak Economic Growth in softne in some of the industri that buy their products including energy and aerospac analysts say the recent round of preannou has b extraord putting aerospac automotive and construc all areas of higher growth for industrial come glom rats. Important thing as we get into the thick of earnings this quarte is organic growth, above and beyo eveg else. A lot of other questions around margin and cash and other areas really flow from first where is growth coming out. Is it decelerating at a faster rate, at a slower rate, et cetera. Steven win kerr likes alegion, and Johnson Controls and for investors willing to weather, honeywell. That company and general electr kick off the sector earnin next friday. For nightly busireport, m morgan b our market monitor want to likes stocks he says should pose Strong Revenue growth and have increa earnis over the next year. The last time he was on back in november he recommended gamestop, down 29 . Jcpenney up 4 , and jetblue, which is about 28 lower. Joining us is brian pirri, of the hennessey cornerstone mid cap fund. Welcome back. Hi, thanks for having me. Of overall, you say there are select opportunities, but n remains the word of the day. Why caution . Well, i think that weve got a market thats pretty well fairly valued. So i think a lot of the large cap stocks have had some really great price appreciation, and really have done so on the heels of really small top line revenue growth. I think that theres st some opportunities, but you have to be really selective. I it particularly like the mid cap and small cap space. And especiall ones that are more domestically focused, that dont have kin the europe or chinese plays that may cause some problems in the future. Let get right to them. You gave us three picks you like. First, amtrust financial. You say they offer insurance on just about everything. Yeah, they really to. Property, casualty, warranty, extended sup plans. They pretty muc you know, this is one of those compans that still trades at a really reasonable multiple at under 10 pe, pays nearly a 2. 5 dividendd really, you know, has a history of raising their dividend its an attractive sto manageme has done a great job in kind of keeping the growth going. I think theyll do well this coming quarter when they report at the begin of november. Its not going to be a home run stock, for sure. But thats a stock that we would definite pure in this area. Next on the list, di com to wire line cable and telephone yeah, so as you think about the fiber coming to the house, and to the node and as you have these Wireless Companies that are expanding their 4g and 5g networks, dy com is the Service Provid that going to win in that capability. I think that thats a nice longter bus model that looks really, really good. Theyve done a great job of growing organically, and i think that thats a trend thats going to continue for the next few years. And lennar is lass on the list. Pr one of the bestknown names t thats a great company. They were so smart in purchasing all this land that back in the last decline and really have done a great job managing the business, awell. Th so geographicall diverse. They have p good concen in florida, texas california, which have been some really good growth markets. But they have a great geographic diversit really, a great company, and if you can take kind of a longert view, has done a fantasti job managing their busine and we think those contin into the next couple years. All right, brian. Thank yo so mu for joining us once again. A brian pirri, with the henn corner mid cap 30 fund. Coming up, headache ie sky. Wi complaints were up during one of busiest months of the year heres a look at what to watch next week. Earnings will be a big theme. 11 members of the dow report, includin ibm, goldman sachs, j j and mcdonalds. Stanley fisher speaks on the econom and interest rates. And well find out how fast the worlds secondlargest economy is growing and china releases its third q gdp and thats what to watch two uber drivers won a legal ruling, now considered employees of the company, making them eligib for unemployment the ruling was made by the new york state departm of labor, but legal experts say this ruling may not set a precedent, because jobless benefits are determ at the state level on a caseby thousands of United Airline passen were delayed worldwid thanks to a computer glit that halted departures. The issue has sin been resolv but passengers said they had to wait onboard planes or inside terminals. This is the third computer glitch to hit United Continental in recent months. So might not be surprised to hear tha Airline Passenger complain wer on the rise during part of the summer trav phil lebeau has more on the de of transportation august airli repor a bit of a mixed bag in the month of august, one of busiest months of the year for air travel. The Top Three Airlines for ontime arrivals, hawaiian, follow by alaska and sky westlund mor 820 of flights on time. On the other end, frontier had the poorest performance, landing 65 of its flights on time, right behind spirit and ameri. As for baggage handling, the indust mishandled just 3. 15 bags per 1,000 passengers. An improvement over july. While the airlines did a better job in terms of landing on time and handling baggage, there was a surge in the number of compla from people flyingu not surprising, given the fact that delta had a computer outage that caused nearly 2,000 flights to be scrapped, and because there e more people flying in august, there tends to be a few more com. Hil lebeau, nightly busi that is nightly busi for. M sue herera. Thanks f watching. Have a wonderful weekend. And well see you back here. Amy the gloves are off. Donald trump steps up his attacks on hillary clinton, republicans, and the media, while his democratic challenger deals with new questions about hacked emails. Im amy walter, in for gwen ifill, tonight on washington week. These vicious claims about me of Inappropriate Conduct with women are totally and absolutely false. Amy a defiant donald trump takes fresh fire over multiple allegations of inappropriate contact with women. These claims are all fabricated. Theyre pure fiction and theyre outright lies. These events never, ever happened. I cant stop thinking about this. It has shaken me to my core in a way
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