Jim Cramer talks how to value the financial sector

Core Viewpoint - The next non-tech stock likely to cross the trillion-dollar market cap threshold may be JP Morgan instead of Eli Lilly, which has been previously anticipated to achieve this milestone due to its promising drug developments [2][20]. Company Analysis - Eli Lilly's current market capitalization is approximately $724 billion, while JP Morgan's is just over $850 billion, reflecting a 29% increase for JP Morgan this year, contrasting with a slight decline for Eli Lilly [2][3]. - Eli Lilly announced plans to build a $5 billion manufacturing plant in Richmond, Virginia, which will be the first of four American plants focused on targeted cancer and autoimmune drugs [6]. - Eli Lilly's stock performance has been hindered by competition from Novo Nordisk and the current economic climate, which is unfavorable for drug stocks due to anticipated interest rate cuts by the Federal Reserve [7][8]. Industry Trends - The banking sector, particularly JP Morgan, is experiencing significant growth, with a notable expansion in price-to-earnings (P/E) multiples, indicating a willingness among investors to pay more for bank earnings [11][12]. - JP Morgan's P/E ratio has increased to 15.7 times this year's earnings, while Goldman Sachs and Morgan Stanley are trading at 16.9 and 17.5 times earnings, respectively, suggesting a wholesale revision in valuations across the banking sector [15][18]. - The overall market sentiment indicates that the Federal Reserve's decisions may not adversely affect bank stocks, which is a positive sign for the financial sector [14][21].