TLDRs:
- BAC slips 0.3% after-hours as tech stocks lift broader market indexes.
- Investors await U.S. jobs and CPI data for rate and yield signals.
- JPMorgan raises BAC price target to $61.50 amid steady regulations.
- Banking sector lags as Treasury yields fluctuate and credit risks loom.
Bank of America shares declined slightly after-hours on Monday, dipping roughly 0.3% to $56.41.
While the move may appear minor, it reflects a broader trend, banks are lagging behind the tech-driven rally that powered U.S. equities higher. The Dow Jones Industrial Average closed at 50,135.87, the S&P 500 climbed to 6,964.82, and technology-heavy indexes saw some of the strongest gains.
Investors are now closely watching the upcoming economic calendar, particularly January’s nonfarm payrolls data on Wednesday and the Consumer Price Index report later in the week, both of which could shake expectations for Federal Reserve interest rate policy.
Oliver Pursche, senior vice president at Wealthspire Advisors, noted that a “buy-the-dip” mentality has resurfaced among traders, giving tech stocks room to continue their momentum. In contrast, the banking sector, including Bank of America, JPMorgan, and Citigroup, has experienced a slower ascent, with many investors cautious about interest rate swings and credit quality concerns.
Bank of America Corporation, BAC
Investors Brace for Key U.S. Data
Bank of America’s performance is particularly sensitive to changes in interest rates, as these directly influence net interest income, the difference between what the bank earns on loans and what it pays on deposits. A stronger-than-expected inflation reading could push Treasury yields higher, tightening borrowing conditions and raising funding costs. Conversely, a weaker jobs report might spark concerns about slower loan demand or rising credit losses, adding pressure to bank earnings.
With so much uncertainty, traders are approaching this week with caution. The broader banking sector also reflected this hesitancy, the Financial Select Sector SPDR Fund fell 0.6%, the SPDR S&P Bank ETF dropped 0.3%, and JPMorgan eased 0.1%. Wells Fargo and Citigroup posted modest gains of 0.7% and 0.9%, respectively, but the overall trend highlighted that banks were not participating fully in the broader market rally.
JPMorgan Optimism Supports BAC
Despite the sector’s lag, JPMorgan analysts remain optimistic about Bank of America. The firm raised its price target to $61.50 from $61 and maintained its Overweight rating. Analysts cited a stable regulatory environment and expectations for only modest interest rate reductions ahead. They also noted that deal-making activity is expected to support earnings growth, with investment banking and trading fees providing a buffer against fluctuations in net interest income.
Still, investors are focused on several potential challenges, including persistent deposit costs, borrower behavior, and vulnerabilities in credit quality if the labor market weakens. Any sharp shifts in economic conditions could amplify pressure on BAC shares and other bank stocks, even amid supportive long-term forecasts.
Moynihan’s Remarks in Focus
Adding another layer of attention, Bank of America CEO Brian Moynihan is scheduled to speak at the BofA Securities Financial Services Conference on Tuesday, February 10, at 8:00 a.m. ET. Investors are expected to scrutinize his comments for insights into consumer lending trends, deposit flows, and capital deployment strategies. In a market where data-driven expectations are already high, Moynihan’s remarks could serve as an important guidepost for both BAC shares and the banking sector more broadly.
For now, Bank of America remains on the sidelines of a tech-led market rally, with traders navigating a delicate balance of economic data, interest rate expectations, and regulatory stability.
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