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