Bank of America Trading forecasts and signals

Bank of America reported a decrease in "apocalyptic" market sentiment.Investors are rushing back into stocks and bonds. History predicts a strong growth in the US stock market in the coming year, according to Bloomberg.The results of the monthly survey of managers of large funds in August showed an improvement in market sentiment, Bank of America (BofA) reported. Investor sentiment is still negative, but not as "apocalyptic" as a month ago, writes RBC.Investors are rushing back into stocks and bonds amid speculation that inflation in the US has peaked, and the Fed will soon enough complete the cycle of raising rates to keep the US economy from recession, according to BofA.The previous July survey showed record pessimism: investors' investments in stocks fell to the levels of the 2008 financial crisis.A new survey has shown that expectations have increased among professional investors that the shocks of inflation and rate hikes will end in the next few quarters.In August, investors' interest returned to American stocks, securities of technology and consumer companies. At the same time, investors were selling stocks from the protective sectors and securities of manufacturers of consumer goods.The main risk for the markets, according to professional investors, remains stable elevated inflation. In second place is the risk of a global recession, followed by aggressive actions by central banks to raise rates.After two months of growth, more than 90% of the components of the S&P 500 index are trading above their 50-day moving averages. From the point of view of history, this is a great sign for the US stock market, writes Bloomberg.Since 2003, there have been 11 such episodes, after which the S&P 500 grew by an average of 5.7% and 18% in the next three and twelve months, respectively. The growth of the index occurred in 10 out of 11 cases, which indicates a very high reliability of this ...

One of the largest US banks, Bank of America Corporation, reported a decrease in net profit in the 2nd quarter by 32.3% year-on-year and by 11.6% quarterly, to $6.25 billion. Earnings per share also decreased by 29%, to $0.73. The issuer's results did not meet analysts' forecasts. Net revenue increased by 5.7% YoY to $22.67 billion, which was almost in line with average market expectations.At the same time, according to management's expectations, expenses will remain at the same level this year, which, given the weak dynamics of revenue, will continue to put pressure on profits.The improvement in interest income made it possible to compensate for the continued decline in commission revenue by 8.8% YoY, to $10.24 billion. Investment banking revenues decreased by 46.8% YoY, mainly due to a drop in underwriting revenue caused by cooling IPO activity.The most active revenue growth was demonstrated by the consumer banking division, increasing by 11.6% to $9.14 billion.According to the results of the second quarter, the bank reported capital adequacy at the level of 10.5% with a minimum requirement of 9.5%. This makes it possible to continue the share buyback, the pace of which may slow down due to the need to maintain the current level of capital in conditions of increased market volatility. Bank of America has not confirmed the increase in quarterly dividends, which it announced earlier. The dividend was expected to increase by $0.01, or 5%, to $0.22.Bank of America continues to demonstrate strong consumer banking results, mainly due to the growth of lending in the face of inflation and the normalization of interest rates. This will compensate for the drop in income from investment banking and will support the indicators in the current year. However, due to the deterioration of macroeconomic and financial conditions, we are lowering the target price for BAC securities from $46 to $40.Bank of America shares on the NYSE show a slight ...

The largest American banks Morgan Stanley, Goldman Sachs, Bank of America and Wells Fargo have increased their dividend payments after they passed the annual stress test from the US Federal Reserve. The regulator noted that the country's main creditors can easily survive a serious economic downturn, thereby providing an opportunity to redistribute excess capital among bank shareholders. The test determines the "stress buffer of capital", that is, an additional financial cushion in excess of the standard, its size comes from possible losses.Morgan Stanley plans to raise its dividend to 77.5 cents per share and a $20 billion buyback program, Goldman Sachs increases its dividend by 25% to $2.5 per share, Bank of America raised its dividend by 5% to 22 cents per share, and Wells Fargo plans to raise its dividend to 30 cents per share.However, this year the increase in dividends has become more restrained than in the past, which was a record for bank capital payments. In addition, JPMorgan & Chase and Citigroup kept their dividends at the same level, since the difficult economic situation may require an increase in capital. Citi is likely to provide an update on its dividend plans as part of its next earnings report on July 15.As part of the annual stress test introduced after the financial crisis of 2007-2009, the Fed assesses how banks' balance sheets will withstand a hypothetical severe economic downturn. The results determine how much capital banks need to operate and how much they can return to ...

The second largest US financial institution by assets, Bank of America Corporation (BAC), increased earnings per share by 38.9% YoY to $0.82 in the fourth quarter of 2021, with a consensus of $0.77. Net profit increased by 28.2% YoY, reaching $7.01 billion. Net revenue increased by 9.75% YoY to $22.06 billion, slightly short of the $22.18 billion expected by the market. Bank of America's operating expenses increased by 5.7% YoY to $14.73 billion.Commenting on the publication of the financial statements, the bank's management noted that the quality of its assets remains at a high level due to the improvement of the creditworthiness of customers and the general state of the economy. The share of non-performing loans in total assets (net charge-off) of Bank of America by the beginning of the current quarter was a record low 0.15%, having decreased by 3 bps compared to last year's result. The volume of loans that are overdue for 30 and 90 days decreased by 14.5% and 30% YoY - to $5.28 billion and $1.4 billion, respectively. This indicates a reduction in risks for the loan portfolio. The volume of loans for which there is a risk of delinquency (reserved criticized utilized exposure) decreased by 73% YoY, to $22.38 billion. The volume of overdue loans in the portfolio for legal entities decreased by 29% YoY and by 7% QoQ, to $1.58 billion. At the same time, delinquency on consumer and mortgage loans increased by 9.7% YoY, $2.99 billion. And yet this share is 1-2% less than in the previous quarters of 2021.The disbandment of reserves for expected credit losses at Bank of America slowed down somewhat, but due to this, the issuer received $489 million in additional profit. However, these receipts are of a one-time nature. We believe that the impact of this factor will decrease in subsequent quarters due to an increase in the volume of loans and a tighter monetary policy of the Fed.Despite the minimum interest rates, Bank of America's net interest income increased by 11.3% YoY to $11.41 billion. Non-interest income increased by 8.2% YoY, $10.65 billion.Bank of America's net revenue from retail lending (consumer banking) increased by 8% YoY, to $8.9 billion. Income from asset management (GWIM) rose by 16% YoY, to $5.4 billion, due to an increase in the volume of assets under management by the same 16% yoy, to a record $1.6 trillion. Revenue from investment banking (global banking) increased by an impressive 24% YoY, to $5.9 billion, thanks to an increase in remuneration for financial advice on M&A transactions. Revenues from operations in the capital markets (global markets) rose by only 2% YoY, to $3.8 billion, due to a decrease in trading volumes and revenue from marketmaking amid weakening market volatility.Due to the presence of diversified sources of profit, Bank of America managed to show strong results in conditions of increased uncertainty and low interest rates. At the end of the year, the bank increased its net profit by 78.7% YoY, to $31.98 billion, due to which the return on equity (ROE) increased to 12.23%. The basic capital adequacy ratio of CET-1 decreased from 11.9% to 10.6% at the industry median level of 11.1%. However, with this value of the indicator, the bank is able to maintain stability and cover possible losses. Bank of America has enough resources to continue repurchasing shares and stable dividend payments.Our base target price for the BAC stock is $52, at the moment the paper is fairly priced by the market, but we recommend it for purchase. With the development of a "bearish" trend, the quote may drop to $43, with the implementation of an optimistic scenario, the stock may rise to $ ...

In the coming months, stock markets expect shocks, according to Bank of America (BofA).Investors underestimate the risks of changes in the monetary policy of the US Federal Reserve.The S&P 500, a key indicator of the US stock market, has risen by more than 90% since reaching a pandemic low in March 2020. It has consistently reached record high levels over the past few months.The sell-off last week was a sign that investor sentiment remains nervous and may be vulnerable to more serious shocks in the future, Bank of America said.According to the bank's experts, the US stock market underestimates the risks of the impending tightening cycle. Record high stock prices and a possible change in the Fed's policy have increased the risk of an "instability shock" that threatens the stock market in the coming months.Fed Chairman Jerome Powell's speech at a virtual meeting of central bank leaders in Jackson Hole on Friday may provoke stock market volatility, BofA warns.According to the chief technical strategist of Bank of America, Paul Ciana, there are signals threatening to turn the markets down, writes the BCS. The ratios of key market instruments do not favor purchases of risky assets, he believes.The ratio of US government bonds to the broad Russell 2000 stock market index reached a new historical low in March and has since increased. According to Ciana, historically, when this indicator recovered from such low levels, it preceded the period when the bond market surpassed the Russell 2000, that is, stock markets were under pressure.In addition, debt securities also rose against copper and oil, which is another negative signal, including for global economic ...

Bank of America quotes continue to move within the correction and the formation of the ”Triangle" model. Moving averages indicate the presence of a short-term bearish trend for BAC. Prices broke down the area between the signal lines, which indicates pressure from sellers of securities. At the time of publication of the forecast, the price of Bank of America shares is 39.87. Within the framework of the forecast of the BAC stock price, we should expect an attempt to develop a small correction and a test of the support level near the area of 38.55. Then, a rebound and a continuation of the rise in the value of securities. The potential target of such a movement is the area above the 50.00 level.An additional signal in favor of a rise in BAC quotes will be a test of the support line on the relative strength indicator (RSI), as we can see, when the indicator values fall below 30, securities rise. The second signal will be a rebound from the lower border of the ascending channel, which is a long-term one. The cancellation of the option of growth in the quotations of the value of Bank of America shares will be a fall and a breakdown of the level of 36.05. This will indicate a breakdown of the support area, as well as the lower border of the bullish channel and the continuation of the fall to the area at the level of 30.00. We should expect an acceleration of the stock's rise with a breakdown of the resistance area and a close above the level of 43.05, which will indicate a breakdown of the upper limit of the ”Triangle " model.Bank of America shares forecast for July and August 2021Thus, the Bank of America shares forecast for July and August 2021 suggests the development of a correction and a test of the support area near the level of 38.55. From where we should expect a rebound and an attempt to continue the rise of shares in the area above the level of 50.00. The trend line test on the relative strength indicator will be in favor of the growth of securities. The cancellation of the BAC rise option will be a drop and a breakdown of the 36.05 level. This will indicate a breakdown of support and a continuation of the fall in value to the area below the 30.00 ...

US financial conglomerate Bank of America, one of the four largest US banks, reported that it ended the first three months of this year with a net profit of $7.56 billion. Compared to the same period of the previous year, its volume increased by 2.1 times. Earnings per share were 86 cents, up from 40 cents a year earlier, and above economists' forecast of 65 cents per share. Quarterly revenue also came in above market estimates. Its volume was fixed at $22.821 billion, with economists' forecast of $21.85 billion. Over the past twelve months, this indicator has increased by 0.2%. During this period, the bank's net interest income decreased by 16% compared to the same indicator a year earlier, amounting to $10.197 billion. The bank's report notes that the situation in the country's banking sector is improving as the economic recovery accelerates against the background of the unfolding vaccination program. The positive reporting of the bank gave a boost to the growth of its shares, the price of which rose by 1.2% on ...

After a lot of profit and loss reports, which American bank is the best to invest in? Let's take a look.Choosing the best American bank for investment can be a difficult task. It is necessary to carefully study their balance sheet, to find the organizations with the highest costs and the largest obligations. Sometimes such expenses can be an unavoidable evil. With the growing number of online-only competitor banks seeking to capture market share by appealing to millennials, well-known brands will inevitably seek to actively invest in improving their infrastructure.Currently, there is an opinion that investors are spoiled for choice, if we talk about the best stocks of American banks. After a year complicated by the coronavirus pandemic, the four largest consumer-oriented brands showed steady results in the second quarter of 2021.The Big FourWells Fargo's net profit for the three months to June 30 was $6.04 billion, which is in sharp contrast to a net loss of $3.8 billion for the same period in 2020. However, the bank warned that "low interest rates and moderate demand for loans" are still a concern.Bank of America expressed similar concerns when it presented its latest earnings report. Net profit of $9.2 billion was increased due to the release of $1.6 billion previously held in reserve in case of default of borrowers on their loans. But interest income fell by 6%, partly due to the persistently low base rate set by the US Federal Reserve.Other contenders for the title of the best shares include Citigroup, which also made a profit of $1.1 billion after releasing some of the cash. The bank's CEO Jane Fraser, saying that consumer and corporate confidence is growing, said: "This was observed in all our companies, which was reflected in the indicators of investment banking and stocks, as well as in a noticeable increase in expenses on our credit cards. Although we should be aware of the uneven recovery on a global scale, we are optimistic about the future."And another bank, no less important than the previous ones. This is JPMorgan Chase, whose quarterly net profit was $12 billion. Again, a large role was played here by the issuance of credit reserves in the amount of $3 billion. The bank's chairman and chief executive officer, Jamie Dimon, said that total credit card expenses increased by 45% this quarter and were 22% higher than before the pandemic in the second quarter of 2019. It is not surprising that the main drivers of growth were spending on travel and entertainment.If we put together the results of all four major American banks, the overall picture shows that they collectively received $33 billion in profit, 9 billion of which can be associated with the release of reserve funds. This is $9 billion more than analysts expected.Although the US inflation rate is rising, the mood in Washington suggests that banks will have to contend with near-zero interest rates for some time yet. Federal Reserve Chairman Jerome Powell told a Congressional committee that the central bank does not plan to raise the base rate earlier than 2023. This may become an undesirable obstacle to the profitability of the US banking sector, even if the demand for loans increases.Read more: Causes of inflation and scientific approaches to their studyThe Best Shares of American Banks in 2021Even as net income recovers, data from the Financial Times shows that costs are also rising significantly, as the shares of the largest US banks are trying to fend off the threat from smaller (and possibly more flexible) competitors in the financial technology sector. The total expenses of the "big four" for the last quarter amounted to $6.6 billion, an increase of 10% compared to the same period last year.Technology and marketing are mainly behind this growth. Given how the use of cash has decreased due to the coronavirus pandemic, some banks are now trying to catch up by introducing digital services. In the US, Internet-only companies, including Current, Varo and Chime, sought to attract customers by processing their payments faster, offering elegant smartphone applications and refusing transaction fees and minimal balance balances.In particular, it seems that the monetary assistance to American households has taught the traditional banking sector a lesson: consumers expect speed and will vote with their feet if they do not receive their funds quickly enough. Indeed, a study by Cornerstone Advisors suggests that in the US in December 2020, 15% of millennials had digital bank accounts, compared with 5% at the beginning of the same year.However, JPMorgan, Wells Fargo and Citigroup closed more than 250 branches in the first half of 2021, and more closures are expected. This is due to the confidence that those customers who started using online banking during the blocking will not return to the branches in the near future. It could also free up capital to expand digital offerings, which are quickly becoming the main focus for people opening accounts and applying for loans.Frequently Asked Questions1. Why are bank shares falling?Stocks of the best American banks can sometimes serve as a barometer of the state of the economy and can fall when Wall Street is nervous about the danger of an economic recovery. Despite the steady numbers on macroeconomic indicators in the second quarter, shares of companies such as Citigroup fell due to continuing concerns about interest rates.2. Are bank stocks a good investment?According to CNN Business, currently, the consensus among investment analysts is that it is worth buying shares of Wells Fargo, Bank of America, JPMorgan Chase, and Citigroup. As for the projected growth in stock prices, the average forecast for Citigroup is the most attractive, as it is expected that they will grow by 26.3% in the next 12 months.3. How do bank stocks perform during inflation?Thomas Michaud, CEO and president of the investment bank Keefe, Bruyette&Woods (KBW), recently stated that, in his opinion, "bank stocks are a good place if concerns about inflation continue to ...