Big banks report mixed earnings results — Cramer and others on what to

Survival of the fittest? As the big banks kick off earnings season with their quarterly reports, they are shedding light on two sides of banking that are faring very differently during the pandemic, market analysts say. JPMorgan Chase's results came in strong, with the firm reporting record revenue. On the other side of the spectrum was Wells Fargo, which said it lost $2. 4 billion in the second quarter. Here's what five Wall Street professionals, including CNBC's Jim Cramer, said about the banks on Tuesday:Aperture Investors Chairman and CEO Peter Kraus wondered if one of JPMorgan's main catalysts this quarter could last:''We expected trading income to be pretty robust and it turned out to be the case. That's not surprising. We had an enormously fast-moving, very active market over the last three months, so, you would expect trading revenues to be good. They're probably a little bit better than what people expected. But then the question is: is that trading revenue really sustainable? And you're going to see that going into the future and that's [where] consumer income is actually more predictive of what we might actually see in the next three months to six months. … The banks are cheap. There's no doubt about that. But the question is what's the catalyst that's going to drive those earnings faster than the catalyst that drives the earnings in other investments? ''Marty Mosby, director of bank and equity strategies at Vining Sparks, said Wells Fargo was more of a long-term bet:''Wells Fargo's a long-term... turnaround story. We'll have to see how the management team can now go from reconstructing and really not having any expectation on what they do this year to what they build towards in earnings power as we go into next year. Cutting the dividend to where it is gives them a little bit of wiggle room, so, this provides a base [and] gets their yield down to about where the market is. But there's several other banks that have [gotten] ahead of the curve in a sense of their credit. The market is discounting them more because they think they're going to have credit from the last recession, but they've done a lot better and they've also restructured their balance sheets. So, those are the banks that we really want to look at now. Wells Fargo's a play as you go into, I think, 2021 or 2022. ''Joe Terranova, chief market strategist at Virtus Investment Partners and a regular on CNBC's ''Halftime Report, '' highlighted the differences between JPMorgan and Wells Fargo's performance:''There's clearly a bifurcation between winners and losers. Just listen to the commentary from [Wells Fargo CEO] Charlie Scharf, who talks about being unsure about the length and severity of the economic downturn, and then read what [JPMorgan Chase CEO] Jamie Dimon says where he talks about the fortress balance sheet and being a port in the storm. So, on the money center banks, I think, clearly, JPMorgan is benefiting from trading revenue as a catalyst.

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