We recently published a list of Jim Cramer Says These 10 Stocks Will Go Higher in Trump Presidency. In this article, we are going to take a look at where JPMorgan Chase & Co (NYSE:JPM) stands against other stocks that will go higher in Trump presidency according to Jim Cramer.
In a recent program, Jim Cramer celebrated the market’s rally on Donald Trump’s election victory, saying the market likes Trump.
“The market likes Donald J. Trump, and it loves a peaceful transition to the next president. We got both, and we had a monster celebration. It was a full jailbreak, and the bears never knew what trampled them. Now, though, with the inclusion of this amazing session, we have to ask: have you missed the Trump rally?”
Cramer said the answer to the question of whether you missed the Trump rally lies in the stock you have in your mind. He said many were expecting a contested election and there was a lot of uncertainty around transition. However, that did not happen and that was in itself a win for the market.
“Trump wants to cut taxes—all taxes—including corporate taxes. Some numbers go higher, estimates go higher, earnings-per-share go higher. You do need to see interest rates go low for things to really work. Someday this is going to matter. It’s hard to keep doing this and piling on debt. But party on until we see damage; that’s what it felt like to me, seems to be the mantra.”
Cramer said the market is still “oversold” as many Trump stocks underwent a massive selloff after Kamala Harris reportedly started to gain ground. However, Cramer said the polls were again proved wrong.
Cramer then talked about the stocks that investors can buy to ride the Trump rally.
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For this article we watched the latest programs of Cramer and picked stocks he believes can go higher under the Trump presidency. With each company, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A group of business people discussing plans around a boardroom table adorned with a financial services company logo.
Number of Hedge Fund Investors: 111
Jim Cramer said in the latest program on CNBC that major bank stocks are “still cheap” despite having a bull run after the Trump victory. He thinks Trump’s presidency would bode well for these stocks.
“The banks have been pushed down for ages because the Democrats, who love to go after the industry. That in turn really debilitated them. Now, the banks can be unfettered. They might be able to merge again. More importantly, the investment banks can focus on many more mergers, and regulators will look the other way. We’ll likely see more IPOs, too. It’s hard to convey how much tension there was between bankers and the Biden administration. They were like oil and water, that’s it.”
Cramer said he sold some bank stocks after the latest run but recommended investors buy them on the dip because he thinks they are still cheap.
JPMorgan Chase & Co (NYSE:JPM) remains among the biggest banks in the US despite fears of recession and rising loss provisions. The bank’s Q3 results showed a notable boost in profitability, driven by a combination of increased net interest income and lower non-interest expenses. Pre-tax income, before accounting for loan loss provisions, surged to $20.1 billion. Even though loan loss provisions jumped sharply from less than $1.4 billion in Q3 2023 to over $3.1 billion in Q3 2024, pre-tax income still grew by several hundred million.
Despite the rise in loan loss provisions, the bank remains well-positioned. Loan provisions fluctuate with the economic cycle, being lower in prosperous years and higher during downturns. Although 2024 may be a more challenging year, JPMorgan Chase & Co (NYSE:JPM)’s financial performance demonstrates it can easily absorb these higher provisions. In fact, JPMorgan Chase & Co (NYSE:JPM) is capable of managing up to $20 billion in loan loss provisions annually before it faces a loss. While concerns about bank safety and rising provisions are valid, larger U.S. banks like JPMorgan Chase & Co (NYSE:JPM) are in a strong position to weather such fluctuations. JPMorgan Chase & Co (NYSE:JPM)’s CET1 ratio of 15.3% stands out as an enviable metric among its peers.
Overall, JPM ranks 4th on our list of stocks that will go higher in Trump presidency according to Jim Cramer. While we acknowledge the potential of JPM, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than JPM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.