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Wells Fargo is a good play for investors who can stomach a little uncertainty.
Dreamstime
This bank earnings season has had its winners and losers, but the winners couldn’t be more different.
Of the six big banks that posted fourth-quarter results this month, only three saw their stocks rise on their respective earnings day:
Morgan Stanley
(ticker: MS),
Bank of America
(BAC), and
Wells Fargo
(WFC). Their upward moves were even more remarkable when stacked up against the recent volatility of the
S&P 500.
The banks differ in areas of focus, but they share one key thing: better expense management than their less fortunate peers.
Rising expenses across the sector were well telegraphed ahead of earnings. For months, headlines have been blaring about climbing inflation, and banks have had to rush to raise compensation to find and retain talent.
JPMorgan Chase
(JPM) had to boost starting salaries twice over the past seven months, collectively giving first-year analysts a $25,000 raise. But the reaction to earnings from JPMorgan,
Goldman Sachs Group
(GS), and
Citigroup
(C) implied that few on Wall Street anticipated that higher compensation costs would hit bottom lines.
But here’s where Bank of America, Wells Fargo, and Morgan Stanley differed—even as they also had to raise…
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