As Wells Fargo goes, so goes the nation?

The bank, which released a solid earnings report Friday, has always been a good economic indicator, one analyst says.

By MSN Money Partner Jul 11, 2014 11:28AM
File photo of Wells Fargo & Co. signage at a bank branch in New York (© Scott Eells/Bloomberg via Getty Images)By Matthew J. Belvedere, CNBC

The adage "As goes GM, so goes the nation" can apply to Wells Fargo (WFC), Raymond James analyst Anthony Polini told CNBC after the bank on Friday became the first of its peers to release earnings.


Wells Fargo reported second-quarter earnings that met expectations, while revenue beat Wall Street estimates.


"I think it's good news for the U.S. economy. Wells is always a good indicator. They have a national banking platform. Their CEO, John Stumpf, has been particularly bullish on the economy," Polini said Friday in a "Squawk Box" interview. "This is a very good indicator that the economy is on track for an improvement."


Polini also made the case that Wells Fargo profit was actually better than it appeared. 


"The more I look into the quarter, the more I like it. They had higher litigation expenses. If you add that back, it's 3 cents. They had a higher tax rate. If you add that back, it's another 4 or 5 cents. So actually on an operating basis, they did beat."


The big positive for the quarter was commercial loan growth, he pointed out. "It went up, and it's double digit now. If you annualize it, it's well over 10 percent."


As for shares of Wells Fargo, Polini sees more upside: "There's another 8 or 10 points in Wells" stock.


But it's due for a breather soon, he warned. "It has been, certainly out of the big banks, the best performer year to date. And the best performer this quarter."


Wells Fargo stock closed at $51.81 a share on Thursday, and was trading down more than 1 percent Friday to $51.21. 


"By historical measures, it's still relatively attractive," Polini added. 


Next week, JPMorgan (JPM), Citigroup (C) and Bank of America (BAC) will continue the bank earnings parade.


More from CNBC

 

21Comments
Jul 11, 2014 12:16PM
avatar
Of course the banks get richer when they pay out .00001 in interest. Wealthy getting wealthier, middle getting poorer....good times.
Jul 11, 2014 12:07PM
avatar

The old adage "As goes GM, so goes the nation" is still very, very true.

 

Government Motors says almost everything that needs to be said about the USA.

 

Jul 11, 2014 11:38AM
avatar
The money-changers are a good economic indicator?  Oh how the mighty have fallen...

"Houston, we have a problem!"

Jul 11, 2014 4:03PM
avatar
did you hear about the thieves who stole an entire shipment of Viagra?
   police are looking for a gang of hardened criminals.

why did the banker break up with his girlfriend? he lost interest.

all the toilet seats were stolen from police headquarters.the police have nothing to go on.

why did the football coach go to the bank? to get his quarter back.

where does the snowman hide his money? in the snowbank.

what do you call a bankrupt Santa? Saint Nickel-less.
Jul 11, 2014 12:03PM
avatar

I'd worry more about 2nd quarter GDP numbers.   Many components, namely exports and inventory builds are worse than 1st quarter.  We had better have had a spectacular June in retail sales or I am thinking we will be lucky to come in at 1.2-1.6% GDP growth.  We could even do worse if June retail sales slumped.  We will not finish the year above 2% and that assumes 4-5% growth the second half.


Right now it looks like GDP is slowing, and not likely to come close to the economists rosy numbers.


We shall know more as earnings reports come in.

avatar
Wells Fargo is still a lousy bank to do business with!
Jul 11, 2014 1:56PM
avatar
WF'S MOTTO - "TOGETHER WE WILL GO FAR"


ON THE BFO'S WALL IS A FRAMED VERSION THAT SAYS "TOGETHER WE WILL BURY YOU"

Jul 12, 2014 3:07PM
avatar
This article withholds from the reader the fact the Wells Fargo MISSED estimates and dropped in price 0.6% on Friday.

That may not be a major point in itself, but its omission says a lot about the author's desire to influence readers without giving them all the facts.

Jul 11, 2014 12:40PM
avatar

Just read on Yahoo Finance, that Bush's tax cuts cost (still) the Economy or debt about $6.6 Trillion dollars...


Yeah, the GIFT that JUST KEEPS on GIVING....(to the rich).

And some think Bush is old news and everything is Obama's fault....Surrrrre..!!

We shall never forget, no free rides for terrible Presidents.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123
123 rated 1
262
262 rated 2
480
480 rated 3
651
651 rated 4
649
649 rated 5
629
629 rated 6
616
616 rated 7
496
496 rated 8
346
346 rated 9
111
111 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
EXCEXELON CORPORATION9
TAT&T Inc9
VZVERIZON COMMUNICATIONS8
CTLCENTURYLINK Inc8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.