And we got better than expected manufacturing data here in the u. S. , but the imf did lower its Global Growth forecast joining us for the hour is steve grasso from Stuart Frankel you know, we hit these highs earlier in the session didnt hold on to it for very long what do you make of todays action we didnt hear about impeachment. We didnt hear about china trade, really. We havent heard much about a lot of things, but we did hear mostly about were earnings so the market wants to get back to something that they can look at and say, its binary. Either services it was a win, it was a beat, they got it higher or lower and were going to run with the market there. Not enough to make new highs, but were on our way there with earnings, i would guess. It is interesting to look at companies fundamentals, actually push the trade headlines aside just a bit still hopeful, perhaps but let the day be run by earnings its true everybody has been run by macro lately so twothirds of all stocks trade with the overall market. So if theres a negative headwind, the overall market is going to go down, regardless of the fundamentals on that one given company. But now we get an excuse to focus on actual earnings, so we can see what the stock market is going to go shortterm on earnings weve got a lot more to talk about. Coming up on those details but lets focus on some other big stories were watching today. Wiff meg terrell has Johnson Johnsons results. And Bertha Coombs is watching United Health. Lets start with wilf on the banks. Big day for you. Indeed, big day for the banks. Share prices improve significantly during the session, as the numerous earnings calls reassured investors despite mixed numbers this morning Net Interest Margins declined across the board due to the lower yield curve, but Net Interest Income saw a less stark decline, because loan growth did remain solid fixed income commodities supported the overall trading picture, particularly thanks to a strong September Goldman sachs profrecovered inty like the rest of the group, but the stock remains the underperformer their investing suffered from an 80 million writedown in their stake from wework, thats to 70 million from originally 150 million. And their Share Buybacks were lower than expected. Jpmorgan, on the other hand, has led the pack throughout the day. Their 8 Revenue Growth year over year really stands out compared to rivals jamie dimon was more cautious on the Corporate Outlook due to the trade war but remains very upbeat about the u. S. Consumer focus turns to bank of america tomorrow and Morgan Stanley on thursday ceo will join us exclusively here on closing bell to go through all the themes of the week and much more and earlier today, you mentioned, there are some more levers to pull, potentially there. Yeah, so, interesting how they both were lower in the premarket when they reported and both significantly higher now. And they both did face that kind of pressure, because of the yield curve. The tone, though, that came across during the call, one, importantly, was that the forecast for Net Interest Income, the part linked to the yield curve didnt really see declines its almost as if we saw the worst in their forecast for that Interest Ratesensitive part of the business, even if we get a couple of more rate cuts and theres cost cutting and Share Buybacks, all of which helps the eps growth and these stocks, steve, are incredibly cheap they are incredibly cheap but theyve been incredibly cheap. But i do agree for im looking for a shortterm pop in all of these like weve seen today. And especially when you look at a wells fargo thats been the underperformer thats when you get the beta trade. If things get a little bit better Going Forward for them. If we start to get closer to the end of their issues versus the beginning, which im sure were there already. You can start to see that one outperform but the other ones are reacting, Net Interest Income and Net Interest Margins are reacting to an inverted yield curve that weve seen recently. So youre not going to see the true benefit or the tail wind Going Forward that were seeing right now without that inversion of the yield curve the only other thing i would say on wells fargo is their revenue did in fact stay flat year over year was expected to decline slightly on the topline, with all the headlines theyve had as of late, that wasnt as bad as it could have been. And john ssclus shrewsberry will join us. Lets send it over to mike santoli for todays market dashboard. Lets pick up on the financials and finding a floor looking at the financials relative weighting in the s p 500. And cracking the ceiling take a look at the overall Market Making another run up against those old highs. Thinking about a refi. This is about companies, perhaps, being pushed to fix their Balance Sheets as a top priority and assessing a white house, the interplay, president ial approval, and the stock market finding a floor, though. Take a look at the very longterm weighting of the Financial Sector within the s p 500. This is courtesy of Wolf Research you can see, its actually kind of gone sideways for a number of years. Despite the underperformance, i would want to point out, this also includes the real estate sector, because for historical purposes, it used to be part of financials, it was separated out. Financials, per se, are a little under 13 of the s p right now and real estate is about 3. 2 . But what you see here is just a general sideways move. This is the financial crisis and right here, prefinancial crisis, it was a very financialized market i guess the big question here is, does it make sense to have financials broadly defined as one sixth of the overall market, given how the economy functions right now . If you wanted to get full mean reversion, would you have to get below . Its hard to say it seems right now, this group has kind of found a steadiness to it that perhaps has got not so much sold out, but basically, people comfortable owning them at this level. And of course, this is going to depend, guys, what the other sectors do if we get a huge nasdaq bubble, thats going to bring the waiting of financials down just by default, not because those stocks go down necessarily its so interesting, im slightly surprised it didnt get higher than 20, 22 in those final years in the runup to the crisis i think if you were looking at some of the european indices it might have been because oil was also a tremendous weighting at those days. Some of the european indices in that runup to the crisis because of the extraordinary growth despite relatively small asset bases of large asset bases from small market caps in like europe and the uk got even higher than 20 . But still, a very sharp decline, as you point out, down to about 10 . More to discuss with the banks later with mike. Now, shares of Johnson Johnson higher after reporting an earnings beat this morning a massive beat on both the top and bottom lines for j j, driven mainly by its pharma and medical device units j jcfo telling us on squawk box that it was the best quarter since 2015 the Company Raised guidance for the full year, but for earnings, the lift wasnt as big as the beat for this quarter. And the stock still trails the s p yeartodate, as j j faces a huge number of legal battles from talcs to opioids to a number of its other products litigation far from over. One other big mover today. United health. Bertha coombs is at the nasdaq with more on its earnings as it leads the dow higher, up more than 8 . One of its best days in five years. Unite ed health care results wa driven by its optimum service units, a growth of 16 Profit Growth and on the insurance side, United Health care revenues were up 5 . And the allimportant medicare membership grew more than 10 . United also boosted its fullyear outlook. Ceo David Wickman sounding pretty bullish on the companys call about its prospects for driving growth in medicare in 2020 the stock today, in fact, cutting much of its losses for the year so far. And providing a tailwind for the sector, setting a positive tone as 2020 medicare enrollment gets underway today, guys courtney thank you very much, bertha well, lets bring in laurie calvasina. Health care is leading the way when it comes to sectors weve had a lot of things to digest today from earnings to other macro head winds what are you watching today and what do you make of the upward trend from today sustainable . I think its important to remember that reporting season is always very lumpy by sectors. Weve gotten some health care today, some financials those were two pretty cheap sectors coming into this reporting season and health care in particular, we had seen that earnings revision trends had been real resilient. So we think there was room for good news to pull some of these stocks up. Its nice to see the reaction. To that extent, lori, was earnings themselves actually that good . I keep hearing two things. One, investors are ready to tune out the noise and get back to fundamentals, as you guys discussed earlier on the show. So i think just being able to focus on earnings and some decent fundamentals is something investors are just frankly really excited about right now but i also think what im hearing a lot of is better than feared so things dont necessarily have to be perfect. I think expectations were pretty low coming into this reporting season so just seeing that there are no new nasty surpriseds i think s new nasty surpriseds i think ur. Do you think were underestimating the impact that a brexit deal could have on this market ive been talking to clients, you know, i was out seeing clients all day today. Its just not coming up a lot in conversation even the political rhetoric, which was pretty, you know, domestic political rhetoric that was pretty in focus last week, that seems to have died down and i think investors are just happy they can focus on the fundamentals steve, on the china trade deal of last week, you actually think its a positive that the deal is being broken into a number of faces . Yes, so this is the first time that ive heard of three phases, right . So last week, when we were talking about the phases, right before that, the president said he was not interested in any type of a small deal or a mini deal and then it went to three phases of a deal. So that, to me, is a 180 from him, a positive for the overall market what has kept the short sellers on their heels the possibility of a deal getting done now you have to wait for three phases of a deal to get done, before you can lay into the market you mean overall, you felt china trade deal stuff was going to be a buy rumor, sell the facts. And now the ultimately, when you get a deal that is completed, three phases, one phase, whatever it is, its going to be a sell the news event, because theres nothing to stay on top of the market, to actually just if you look at it, china is going to have less growth by doing the deal, correct . Right so if china is the Growth Engine of the world, by even the principles of a trade deal, theyre giving up something. If thats giving up something and were done or that unknown is done, then i would say that you probably have a good sell the fact event on your hands when a deal gets done, but not until that deal gets done. Lori, quickly, health care has nice setups, which other sector stands out for you . I would say the one were really watching is industrials one thing i noticed about the preannouncements coming into this reporting season is they were still a little bit evaluated in industrials versus history, but werent as bad as they were last quarter we felt like at the margin, the news, the setup might be getting a little bit better. And its another one of these sectors. Our p\e model shows its back down to financial kris lcrisis w we thought all the bad stuff was priced in. And there was a lot of room for upside if we got some decent news thanks for joining us still to come, cfo john sclo shrewsberry will join us and heres a check on our data tracker weve been following the slowdown in the manufacturing, but we got a rosier read from the empire state index today 4. 0 versus estimates of 0. 8. Still below levels that weve seen for the past few aryes, which is important to point out. Closing bell will be right back make fitness routine with pure protein. High protein. Low sugar. Tastes great high protein. Low sugar. So good high protein. Low sugar. Mmmm, birthday cake pure protein. The best combination for every fitness routine. Was in an accident. When i called usaa, it was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family and we plan to be with usaa for life. See how much you can save with usaa insurance. Wells fargo today higher today after beating revenue estimates. Investors looking ahead to monday when Charlie Scharf will take over as the banks new ceo. Joining us now, John Shrewsberry, also a member of the global ceo counsel a very good afternoon to you thanks for you to joining us i want to talk overall, first, about the revenue, which was essentially flat year over year, most analysts had expected it to decline slightly were you happy with that well, i would always rather have more rather than less but it is nice to beat expectations it was a complicated quarter for us we had flat revenue. Our expenses were a little bit higher we produced 4. 6 billion worth of net income. I think what investors were taking away from the report was that happiness that both loans and deposits had been growing, year over year, and quarter over quarter. We seem to be getting some of our, the last of these sales practices issues behind us, with our evaluated operating loss expense in the quarter charlie, as you mentioned, will be starting next week. I think investors are excited about that and then in interest income, we gave pretty good guidance for this year and were sticking with it. And people now are curious about what next year looks like. And we gave some relatively specific guidance for that and i think it exceeded peoples expectations, given how low rates have gone over the of the last quarter or so and thats why the stock, as you pointed out, seems to be is up a little bit today. Well, to that point, lets talk about the forecast for net income interest Going Forward, john because as you pointed to during the course of the last quarter, we saw yields get incredibly low, and even that weve had a rate cut since then, and we may well have another couple do you feel like Net Interest Margin has bottomed in terms of the foreseeable future yeah, i dont think that it quite has. Were calling for our Net Interest Income, knowing what we know today, about what implied forwards say about the shape of the curve at the front end and the long end, estimates for loan growth, estimates for deposit growths and deposit costs that our margin will probably come down a little bit further. It looks like it will probably flatten over the next couple of quarters and all in, that combination of events leads to Net Interest Income next year thats probably down low Single Digits versus 2019 which, again, was better than people might have imaged given the huge rally in rates and the fed moving in the front end. John, it looks like you had some good traction in your Consumer Loan business and it seems if other if your banking peers had similar. What does that tell you about the state of the u. S. Consumer and where they feel financially they are right now the consumer is very strong so our Mortgage Business produced about 58 billion worth of originations in the quarter about 40 of that is refinancing as people are taking advantage of lower rates, which means 60 are people purchasing homes. I think that means that they feel comfortable with their income, with their ability to service debt, and thats certainly born out by the numbers over the last ten years. The household debttoincome ratios, paymenttoincome ratios have gotten better and better. People have gotten less levered. Thats good news in autos, weve grown auto originations year over year more than 40 we had really slowed our auto originations down for a period of time. And then got back into the market in a bigger way this year and people are buying cars, both new and used and in credit card, we also had an increase of about 800 million in the quarter thats more seasonal people tend to spend more and revolve more later in the summer and during backtoschool season theres nothing particularly different about that but the performance of our Consumer Credit portfolios, the three that i mentioned and others has really never been better its very good right now, reflecting a healthy consumer. What about on the corporate side are you seeing confidence slipping because of the trade war . Yeah, well, i dont know if its because its a trade war, but im sure thats part of it but ceo confidence, as reported, has been slipping. Businesses for some period of time has been deferring capex. You know, the gdp number suggests much lower business fixed investment thats whats been missing in the late part of this recovery, in terms of business spending. And i think people are taking a little bit of a riskoff approach it hasnt yet impacted jobs. That, of course, would have an impact on the consumer, if it happened and the consumer, thats been driving the late stage of this recovery so, you know, corporate Balance Sheets are in good shape our corporate customers credit quality is very strong, but theyre defending that, i think, by being a little bit more circumspect about what they spend money son and risks