Finance

Wall Street’s biggest financial institutions kick off fourth-quarter earnings on Wednesday, with portfolio names Wells Fargo , Goldman Sachs , and BlackRock set to report results before the opening bell. The rally in financial stocks last year, which really started in October 2023, went into high gear in the run-up to the Federal Reserve ushering in a monetary easing cycle with a jumbo 50-basis-point interest rate cut at its September meeting. It was supercharged in early November after Republican Donald Trump emerged as the winner of the presidential race and the Fed cut rates by another 25 basis points. Following its December meeting, the Fed cut rates by another 25 basis points and projected two more reductions in 2025. Bank stocks, much like the broader market, have come off the boil in the new year as traders pushed up bond yields, signaling they think the Fed may have been too heavy-handed with its rate cuts. While the incoming Trump administration’s stance on regulations is seen as more business-friendly, some of the president-elect’s proposed policies, especially when it comes to trade tariffs, could be inflationary. The labor market has proven more resilient than expected too, raising concerns about sticky inflation. That’s why the market, according to the CME FedWatch tool, sees only one rate cut or maybe none this year. Against that backdrop, there are still individual factors to consider when Wells Fargo, Goldman Sachs, and BlackRock report their quarters. We’re looking for answers to nine questions. WFC YTD mountain Wells Fargo (WFC) year-to-date performance 1. What is Wells Fargo’s guidance on net interest income? Wells Fargo’s guide on net interest income (NII) — the difference between what the firm makes on loans and what it pays on deposits — will be crucial. Interest-based revenues for Wells took a hit last year as the Fed held rates higher for longer. Not only did this weigh on loan growth, but customers decided to take their deposit money to higher-yielding alternatives. Despite the Fed rate cuts, those higher-yield alternatives are still competing against deposits. The company has taken action, but we’re going to have to see how management deals with those higher funding costs. NII is expected to fall about 1% year over year in 2025 based on FactSet consensus estimates. 2. Will management continue to diversify revenue streams? We’ve praised Wells Fargo’s push into investment banking and other ways of accruing fee-based revenue streams. In recent years, the firm has made a slew of senior-level hires to expand its IB efforts. It’s a way for Wells to not rely so heavily on interest-based revenues like NII, which are at the mercy of the Fed’s policy decisions. Over time, these fee-based revenues can also be higher-margin revenue streams. Last quarter these efforts paid off as revenue from its investment banking division beat analysts’ expectations. An expected easing of regulations by the Trump administration is seen as a positive for dealmaking and initial public offerings (IPOs), which IB operations at Wells Fargo and Goldman Sachs help put together and get paid advisory fees. 3. Any further progress on the regulatory front? It’s unlikely that Wells Fargo executives will reveal too much, but analysts will likely ask about the steps Wells Fargo and CEO Charlie Scharf have taken to appease regulators. Scharf has been cleaning up the bank’s act in hopes of getting the Fed-imposed $1.95 trillion asset cap on Wells Fargo removed. It was placed in 2018 for past wrongdoings that predated Scharf. Any indication of progress on getting rid of the asset cap will be welcome news for shareholders like us. That’s because once the cap is gone Wells will be able to grow its balance sheet and invest further into budding yet lucrative lines of business such as investment banking. Based on recent reporting, there is a belief that the asset cap could be lifted as early as the first half of this year. 4. How does the bank’s expense guide measure up? We want to make sure that management’s strides to cut down on expenses are still taking place. When Scharf assumed the CEO role in 2019, Wells Fargo had one of the most bloated expense bases out of all the big banks. Scharf’s been slashing costs left and right ever since. We want to see more progress in the fourth quarter as well. Operating expenses are expected to be flattish year to slightly higher year over year in 2025, based on FactSet consensus estimates. GS YTD mountain Goldman Sachs (GS) year-to-date performance 5. What’s the state of Wall Street dealmaking? We’re long shares of Goldman Sachs because it’s a great investment banking rebound play. In fact, it’s so good that the Club exited Morgan Stanley entirely this month and plowed the money into starting and building a position in Goldman, a stop on Jim’s career on the Street. Therefore, remarks from Goldman management about the appetite for IPOs, mergers and acquisitions, and other kinds of dealmaking are key during the conference call. That’s because more deals mean more revenue for Goldman’s IB division, which made up a significant portion of overall revenue last quarter. We have already noticed an uptick in M & A, and some of those deals probably would have never come together without a Washington regime change. 6. What’s up with Goldman’s interest in private credit? The Wall Street Journal reported Monday that Goldman has plans to restructure itself to embark further into facilitating various types of financing deals. This will be the first quarter we hear directly from management about it. BLK YTD mountain BlackRock (BLK) year-to-date performance 7. What are BlackRock’s net new assets? It’ll be the first quarter that BlackRock reports as a portfolio stock since being added in late 2024. Net inflows will be a key metric to watch for the world’s biggest asset manager. BlackRock posted a record $11.48 trillion in assets under management (AUM) last quarter, up from $10.65 trillion in the quarter prior. The more assets that the firm rakes in, the more fees it can generate. If management stays disciplined on costs from there, this will help to improve BlackRock’s fiancial performance. 8. What are the firm’s operating margins? This is another important gauge for investors to watch because it measures how much profit BlackRock is generating from its core businesses before interest and taxes. A higher operating margin usually suggests that a company is more efficient in generating profits. Plus, this figure can also give investors a read into how BlackRock is managing its expenses. 9. How is BlackRock’s strategic push going? The asset manager has made a bunch of acquisitions over the past year to boost its presence in fast-growing segments like infrastructure and private credit. It recently completed a $12.5 billion deal to acquire Global Infrastructure partners to create a world-leading infrastructure private markets investment platform. It’s paying $3.2 billion to buy a private markets data provider called Preqin. More recently, BlackRock pushed into private credit with a $12 billion acquisition of HPS Investment Partners. We want to know how all these deals are progressing because they are key to the company’s goal of becoming a larger alternative manager. (Jim Cramer’s Charitable Trust is long BLK, WFC, GS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Wells Fargo, Blackrock and Goldman Sachs.
Jeenah Moon | Reuters | Justin Sullivan | Michael M. Santiago | Getty Images

Wall Street’s biggest financial institutions kick off fourth-quarter earnings on Wednesday, with portfolio names Wells Fargo, Goldman Sachs, and BlackRock set to report results before the opening bell. More

The Consumer Financial Protection Bureau announced it was suing Capital One for “cheating” customers out of more than $2 billion in interest.
The agency said the banking giant used deceptive marketing to obscure differences in interest rates between two of its savings account options.
Capital One denied the allegations and said it widely advertised its high-yield savings account.

FILE PHOTO: Signage is seen outside a Capital One Bank in Manhattan, New York, U.S., November 12, 2021. 
Andrew Kelly | Reuters

The Consumer Financial Protection Bureau announced Tuesday that it was suing Capital One for misleading consumers about their savings account interest rates and “cheating” them out of more than $2 billion in interest.
The agency said in a statement Capital One deceived holders of its “360 Savings” account by conflating it with its newer and higher-yield savings account option, the “360 Performance Savings” account. The bank allegedly failed to notify 360 Savings account holders of the newer option and marketed the two products similarly to lead customers to believe they were the same.

However, the interest rates of the two options were substantially different, according to the CFPB. Capital One increased the 360 Performance Savings interest rate from 0.4% in April 2022 to 4.35% in January 2024, while it lowered and then froze the 360 Savings rate at 0.3% between late 2019 and mid-2024, the agency said.
Despite its relatively low interest rate, the CFPB alleged, the 360 Savings account was advertised as a high-interest savings account. The bureau said Capital One aimed to keep 360 Savings users in the dark about the higher-yield option by replacing all references to the account with the similarly named 360 Performance Savings option on its website, excluding account holders from marketing campaigns advertising the higher-yield account and forbidding employees from notifying account holders about the 360 Performance Savings option.
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB Director Rohit Chopra in a news release. “Banks should not be baiting people with promises they can’t live up to.”
In a statement, Capital One denied the allegations and said it transparently marketed its 360 Performance Savings account.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court,” the company said in a statement.
The bank added the 360 Performance Savings product was “marketed widely, including on national television, with the simplest and most transparent terms in the industry.”

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JPMorgan Chase said Tuesday that Chief Operating Officer and President Daniel Pinto will step down from those roles in the coming months, setting off an executive shuffle with implications for succession planning for CEO Jamie Dimon.
Pinto, who has worked at JPMorgan and predecessor firms for more than four decades, will cease being COO and president in June and retire at the end of 2026, the bank said.
The company’s new COO is Jennifer Piepszak, the co-head of the commercial and investment bank who along with consumer banking chief Marianne Lake was widely seen as a top contender to succeed Dimon.
But as part of the announcement, the company took the unusual step of stating that Piepszak’s intention was to remain in a support role to the CEO, rather than vying for the top job.

Daniel Pinto, president and chief operating officer of JPMorgan Chase, speaks during the Semafor 2024 World Economy Summit in Washington, DC, on April 18, 2024.
Saul Loeb | AFP | Getty Images

JPMorgan Chase said Tuesday that Chief Operating Officer and President Daniel Pinto will step down from those roles in the coming months, setting off an executive shuffle with implications for succession planning for CEO Jamie Dimon.
Pinto, who has worked at JPMorgan and predecessor firms for more than four decades, will cease being COO and president in June and retire at the end of 2026, the bank said.

The company’s new COO will be Jennifer Piepszak, the co-head of the commercial and investment bank, who along with consumer banking chief Marianne Lake was widely seen as a top contender to succeed Dimon.
In her new role, Piepszak will oversee the sprawling financial giant’s technology, operations, data and analytics functions, as well as its overseas operations.
But as part of the announcement, the company took the unusual step of stating that Piepszak’s intention was to remain in a support role to the CEO, rather than vying for the top job.
“Jenn has made clear her preference for a senior operating role working closely with Jamie and in support of the top leadership team, and does not want to be considered for the CEO position at this time,” spokesman Joe Evangelisti told CNBC. “She is deeply committed to the future of the company and our team and wants to help in any way she can.”
Last year, Dimon, 68, hinted that his CEO tenure could end within five years. That ignited speculation about who would take over at the largest and most profitable U.S. bank by assets.

With Piepszak apparently taking herself out of contention, that leaves Lake, as well as Troy Rohrbaugh, who is co-head of the Commercial & Investment Bank along with Doug Petno, as the likely top contenders to be JPMorgan’s next CEO. They lead the firm’s biggest businesses across Main Street and Wall Street banking.
Lake, Pinto, Piepszak, Petno and Rohrbaugh, as well as Mary Erdoes, head of the bank’s asset and wealth management division, report directly to Dimon.
Dimon lavished praise on his longtime No. 2, who started out at a predecessor firm to JPMorgan in 1983 as a currency trader in Buenos Aires, Argentina. Pinto rose through the ranks of Wall Street, eventually becoming sole head of the firm’s powerful corporate and investment bank in 2014, and then companywide COO in 2018.
“Daniel is a first-class person who I am proud to call a friend, and he has made a truly significant impact on our company for more than 40 years,” Dimon said in a statement.
“I can’t thank him enough for his partnership and outstanding stewardship as President and COO, and for building the best, most respected Corporate & Investment Bank in the world,” Dimon said.

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The health care sector claimed the highest share of top jobs for 2025, according to Indeed.
They accounted for six of the top 25 jobs: Veterinarian, physician, clinical psychologist, radiologist, registered nurse and director of clinical services.
An aging U.S. population, retirements among workers and low risk of A.I. replacement have led to high labor demand, experts said.

Jose Luis Pelaez Inc | Digitalvision | Getty Images

The health sector holds many of the best job opportunities for workers in 2025, due to factors like high labor demand and pay, according to a new ranking from job search site Indeed.
Health care roles account for six of the top 25 jobs for 2025, according to Indeed: veterinarian (ranked No. 1), physician (No. 3), clinical psychologist (No. 8), radiologist (No. 14), registered nurse (No. 18) and director of clinical services (No. 22).

That’s the highest share of top jobs relative to other sectors, and the second year in a row health care dominated the list.
Indeed’s analysis looked at professions that met three criteria: a minimum salary of $75,000 per year, growth of at least 20% in postings on the site over the last three years and offerings of remote or hybrid roles for at least 5% of postings. The jobs are ranked by their share of postings on Indeed.

Health care has seen “extremely, extremely rapid” job growth, said Julia Pollak, chief economist at ZipRecruiter.
“It is just relentless,” Pollak said. “It’s extremely robust and consistent, and we don’t see any slowdown at all.”
The U.S. economy added 902,000 health care and social assistance jobs in 2024 — more than double the closest competing segment, government, which added 480,000 jobs, according to the Bureau of Labor Statistics.

Total employment in health care occupations is “projected to grow much faster than the average” for all U.S. jobs from 2023 to 2033, according to the Bureau of Labor Statistics.
Ample job opportunity in the sector stems from many factors, said Jennifer Herrity, a career expert at Indeed.
For example, an aging U.S. population increases the need for health care; retirements among workers in the health field have created shortages in some roles; and health care jobs are at a lower risk of being replaced by artificial intelligence than those in other industries like software developers and engineers, Herrity said.

‘Surprisingly high’ salaries, high barrier to entry

Strong labor demand has contributed to many health care jobs being “surprisingly high paying,” Pollak said.
For example, radiologists earn a median annual salary of about $385,000, the top-paying job on Indeed’s list. The typical physician earns $225,000 a year, the second-highest salary of the bunch.
“High salaries and a history of stability make health care a highly attractive field, albeit with a high barrier to entry, especially for roles like radiology, which require a minimum of 13 years of school,” Indeed wrote about its 2025 list.
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The incoming administration of President-elect Donald Trump may bring a shake-up to the health care sector, though.
For example, Trump and Republican allies may cut federal spending for Medicaid or allow Affordable Care Act subsidies to expire to raise money for other policy priorities like tax cuts, which could lower health care demand.

Conversely, mass deportations could exacerbate labor shortages and lead to higher pay. Immigrants accounted for 18% of health care workers in 2021, according to the Migration Policy Institute.
Job seekers hoping to “cash in on high-paying and fast-growing jobs without a long-term investment in education” can perhaps look outside the health sector, in an occupation such as a sales representative, Indeed said. Many companies hiring sales reps may consider applicants with a high school diploma and the right mix of skills, it said. Sales reps make a $182,000 median annual salary, according to Indeed. More

Swedish fintech unicorn Klarna told CNBC on Tuesday that it’s agreed a major new distribution partnership with U.S. payments firm Stripe.
The deal will let Klarna offer its popular buy now, pay later plans to merchants using Stripe’s payment tools in 26 countries.
The new tie-up gives Klarna a big boost at a time when it’s gearing up for a hotly anticipated IPO in the U.S.

“Buy-now, pay-later” firm Klarna aims to return to profit by summer 2023.
Jakub Porzycki | NurPhoto | Getty Images

Klarna has agreed a major new distribution partnership with fellow fintech unicorn Stripe, in a bid to expand reach and add more merchants in the lead-up to its upcoming listing in the U.S.
Klarna’s buy now, pay later (BNPL) service will become available as a payment option for merchants using Stripe’s payment tools in 26 countries, the two companies told CNBC Tuesday.

This isn’t the first time Klarna and Stripe have partnered. In 2021, at the height of the Covid-19 pandemic-fueled fintech craze, Stripe announced Klarna would offer its BNPL plans to the U.S. firm’s merchants.
BNPL plans are installment loans that allow a consumer to buy something online or in store and then pay off their debt, either at a later date or over a period of equal monthly installments. BNPL arrangements have become a popular way for people to spread the cost of everyday purchases.
The new tie-up with Stripe gives Klarna a big boost at a time when it’s gearing up for a hotly anticipated initial public offering. Klarna confidentially filed to IPO in the United States in November. The company could fetch a valuation of as much as $20 billion, according to a Bloomberg News report out last year.
Klarna makes money from the fees that retailers pay on each transaction processed through its platform. In return for giving Klarna visibility as a payment option in its checkout tools, Stripe will get a share of the money Klarna makes from a given transaction.
Klarna declined to disclose financial terms of its deal with Stripe.

“This is really significant for Klarna,” David Sykes, Klarna’s chief commercial officer, told CNBC, adding the company has already doubled the number of new merchants in the three months since it began implementing the new integration with Stripe in October.
“We added 100,000 new merchants in 2024 and we are already seeing that growth rate increase with this agreement.” he added.
Analysts recently valued Klarna, which was founded in 2005, in the $15 billion range. At its peak during the pandemic-led surge in fintech stocks, the company attracted a valuation of $46 billion in a funding round led by SoftBank’s Vision Fund 2 back in 2021.
In 2022, Klarna took an 85% haircut in a fresh round of funding that valued the firm at $6.7 billion.
The deal also has the potential to drive incremental revenue gains for Stripe, too.
BNPL proponents tout these plans as a way to increase the overall level of transactions, as shoppers can buy more items during a shorter term window and then pay them off over a longer timeframe.
A study Stripe ran last year found businesses offering BNPL as a payment method generated up to 14% more revenue from increased conversion and higher average order values.
“We’ve seen BNPL volume grow 172% last year on Stripe, which is much faster than other mainstream payment methods,” Jeanne Grosser, chief business officer of Stripe, told CNBC, adding that the deal with Klarna was a “win-win” for both firms.
Stripe has long been speculated to be a near-term IPO candidate — for its part, though, the company says it’s in no rush. The company, also a victim of a slump in fintech valuations, slashed its valuation to $50 billion in 2023 from $95 billion in 2021. The company’s valuation reportedly rebounded to $70 billion, as part of a secondary share sale. More

China’s electric car market is headed for a sharp slowdown in 2025, according to analyst predictions, increasing pressure on companies trying to survive.
Strong sales volumes have enabled “strugglers and stragglers” to hang on despite falling margins, Yuqian Ding, head of China autos research at HSBC, said in a report last week.
China’s mix of subsidies and consumer purchase incentives have supported the rapid growth of new energy vehicles in recent years.

New electric vehicles destined for Belgium at a port in Taicang city in eastern China’s Jiangsu province on Jan. 11, 2025.
Future Publishing | Future Publishing | Getty Images

BEIJING — China’s electric car market is headed for a sharp slowdown in 2025, according to analyst predictions, increasing pressure on companies trying to survive.
Sales of new energy vehicles, a category which includes battery-only and hybrid-powered cars, surged last year by 42% to nearly 11 million units, according to the China Passenger Car Association. Market leader BYD’s NEV sales skyrocketed — up by more than 40% last year to nearly 4.3 million units, far above its internal target of at least 20% growth from 2023.

But looking ahead, HSBC analysts forecast only a 20% increase in China’s new energy vehicle sales this year, alongside heightened industry consolidation. They predict BYD unit sales growth of around 14%.
Strong sales volumes have enabled “strugglers and stragglers” to hang on despite falling margins, Yuqian Ding, head of China autos research at HSBC, said in a report last week. She pointed out that only BYD, Tesla and Li Auto made a profit in 2023.
“In our view, this situation is unsustainable and we expect the pace of industry consolidation to accelerate rapidly,” Ding said.

China’s mix of subsidies and consumer purchase incentives have supported the rapid growth of new energy vehicles in recent years.
Shenzhen-based laser display company Appotronics didn’t even have an autos business until it started making an in-car projector screen that began deliveries in China early last year. The company shipped more than 170,000 units last year.

But in a sign of a changing market, the company only expects similar volumes in 2025, Appotronics Chairman and CEO Li Yi told CNBC last week. He predicted the market wouldn’t pick back up until 2026.
“A lot of customers, the automakers, they’re not in a good financial state. They cut the R&D budget. That will definitely have a negative impact on this industry,” Li said, also noting overcapacity issues.
As automakers piled into China’s fast-growing electric car market, they began a price war in a bid to attract customers. Smartphone company Xiaomi launched its SU7 electric sedan last year at $4,000 less than Tesla’s Model 3, and with claims of a longer driving range.
“When BYD and Tesla cut prices, most rivals have little choice but to follow suit. This has clearly squeezed the overall profit pool in the auto industry, especially now that EVs have all the momentum,” HSBC’s Ding said, noting that BYD has a net profit margin of only 5%, less than the low teens for top automakers when the traditional fossil fuel car was at its peak.
NEV penetration of new cars sold had exceeded 50% by the second half of the year, association data showed.
Because of the high penetration rate, the growth rate of new NEV car sales will likely slow to 15% to 20% in 2025, according to Fitch Bohua analyst Wenyu Zhou and a team. They expect so-called smart features will increasingly become a major point of competition.
Automakers in China have increasingly turned to in-car entertainment features and driver-assist technology as ways to make their vehicles stand out.
While the electric car market moderates its growth, Appotronics plans to bring a 4K-resolution projector to cars in China this year, along with a screen that has better contrast and privacy features, Li said.
As for the longer term, the company intends to spend the next two to three years on developing new, laser-based uses for car headlights, Li said. He added the company is in talks with Tesla for a projector-type product in a next-generation vehicle, but could not say more because of a non-disclosure agreement. More

On November 25th the Elva, a tanker flagged in São Tomé and Príncipe, clandestinely picked up 2m barrels of Iranian crude off Malaysia’s coast. Sailing from there to north-east China, the vessel’s likely destination, usually takes two weeks at most. But not this time. On December 3rd, alleging the Elva had breached sanctions, America blacklisted the ship, exposing anyone dealing with it to punishment. Six weeks on it is still stranded less than 20km from where it collected its cargo. More

Cliff Asness, co-founder of AQR Capital Management, believes bitcoin is in a speculative bubble after the cryptocurrency’s swift rally carried it above $100,000 following the November presidential election.
Asness said there are three uses for crypto that he has identified: speculation, use in war-torn countries and paying cyber ransom.

Cliff Asness.
Chris Goodney | Bloomberg | Getty Images

Cliff Asness, co-founder of AQR Capital Management, believes bitcoin is in a speculative bubble after the cryptocurrency’s swift rally carried it above $100,000 following the November presidential election.
“I’m on the bubble side, on net,” Asness said on CNBC’s “Money Movers” on Monday. “To move me off that, you really need not a price change, but a use case. That’s what could convince me to become maybe more of a crypto person when I find any use for it, aside from speculation and criminality.”

Asness said there are three uses for crypto that he has identified: speculation, use in war-torn countries and paying cyber ransom.
Bitcoin rallied 120% in 2024 after a huge year-end pop on the back of President-elect Donald Trump’s election. Investors hoped Trump would usher in a golden age of crypto, including supportive deregulation of the industry and a national strategic bitcoin reserve. The digital coin has dipped 3% in the new year, last trading near $90,000.
“There’s no fundamental trend for crypto because I don’t know what the fundamentals are, but there is a price trend,” Asness said. “So I would guess most trend followers who have it in their universe are actually long.”

Stock chart icon

Bitcoin over the past year.

Although Asness is bearish on crypto, he noted that he would not bet against it due to its volatility.
“I wouldn’t short crypto only because shorting things with 100% annual volatility can be a little scary. I think we’ve all discovered what concentrated shorts can do to a portfolio,” he added.
Asness co-founded AQR in 1998 after a stint at Goldman Sachs. He and his partners established the quant-driven firm’s investment philosophy at the University of Chicago’s Ph.D. program, focusing on value and momentum strategies.

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