Cramer Remix: Big banks have kicked off earnings season in a surprising fashion

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Jim Cramer details how the group is doing better than expected and remains cheap even after the latest leg higher.

CNBC's Jim Cramer on Thursday said the banking sector reported positive earnings results over the past week and that the stocks remarkably were able to rally on the news.

Wells Fargo, who is running without a CEO since the resignation of Tim Sloan last month, was the only major institution to see its shares fall. But Cramer said its 0.4% decline was not all that bad considering the stock dropped 2.5% after its earnings call last Friday. "If we get a few more of these red-hot, yet hopelessly overvalued deals ... the averages will start to feel the pressure," the host said."That will lead to a sell-off like we haven't had in ages as investors dump existing stocks to raise cash for the next big IPO."

"Today we got the first taste of what I believe will be many more deals that are just too expensive for my taste. So keep that in mind," he said."Even as I expect some terrific quarters buried in next week's cacophony of earnings reports, call me wary."The debuts of Pinterest and Zoom Video Communications on public markets also came with froth, which could lead to a market peak, Cramer said.

The host said he likes the prospects that each of these companies have, but the stock prices could be running in worrisome territory.Five Below, the discount chain of about 750 stores across the country, is testing out a more expensive format: Ten Below. "If you're diversified you will be the angler king, if you aren't, between the sharks and the seawater, I'll tell you what's going to happen: you're going down," he said.In Cramer's lightning round, the"Mad Money" host gives his thoughts to callers' favorite stock picks of the day in rapid speed.

 

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