Stocks

Stocks Strongly Upward on Bank of America Earnings and a Boost from the UK Tax U-Turn

The Bank of America is one of the largest banks in the United States, and its stocks are some of the most valuable in the world. In this blog post, we’ll take a look at the bank’s recent stock performance and what it means for investors.

Stocks

The dollar fell against a basket of other currencies on Monday as investors waited for the upheaval in the bond market to subside before another busy week of Wall Street earnings announcements.

Financial markets in Britain, which have recently caused a global uproar due to plans by new Prime Minister Liz Truss to increase borrowing to pay for tax cuts, stabilized on Monday after the appointment of Jeremy Hunt as the country’s new finance minister, who has vowed to obliterate many of her primary fiscal goals.

Truss is left hanging by a political thread due to the decision, but it has supported U.K. bond markets with lower yields and a steady pound that increased to 1.1288 against the dollar. U.S. 10-year notes fell to about 3.936% in early New York trading, while benchmark 10-year U.K. government bond yields were marked 27 basis points lower at 4.06%.

According to Nigel Green of the London-based financial advisory deVere Group, “markets appear reassured for the time being as the new Chancellor spelled out his emergency measures aimed at stabilising the incredibly stormy waters of the last couple of weeks.”

He issued a warning, saying, “However, we think that the latest steps to calm financial markets would only work temporarily.” “The enormous credibility loss cannot be recovered all that quickly. Investor confidence and trust are not boosted by U-turns and the abandonment of critical economic policies one after the other. Instead, it has an awful odor of economic incompetence.

However, investors should expect market volatility to continue this week as the Vix index, the primary volatility indicator for the CBOE group, increased 0.66% throughout the previous night to 32.15 points. This movement indicates that the most significant U.S. benchmark will experience daily movements of about 70 points during the ensuing 30 days.

Five Things To Know About Fox, Bank of America, Splunk, the Week Ahead, and the Stocks:
This week, Wall Street will likely focus on earnings and housing data as investors anticipate the spreading effects of the Federal Reserve’s unrelenting policy tightening throughout the last few months of the year.

The U.S. housing market has been hardest hit by three jumbo Fed rate hikes, as well as the slow sale of bonds from the central bank’s $8 trillion balance sheet. Mortgage rates are now close to 7%, the highest level since 2006, leading to sharp drops in home prices and the suspension of new construction projects.

The National Association of Homebuilder’s monthly update on Tuesday and existing home sales data from the National Association of Realtors on Thursday, both at 10:00 am Eastern Time, will precede and follow the release of the housing starts and building permits data for September on Wednesday at 8:30 am Eastern Time.

Approximately 66 S&P 500 firms, including Tesla (TSLA), Johnson & Johnson (JNJ), Netflix (NFLX), AT&T (T), American Airlines (AAL), and American Express (AXP), are anticipated to release their September quarter earnings this week.

Refinitiv data indicates that total S&P 500 third-quarter profits will increase by 3.6% from the prior year to around $46.1 billion, with a 5% growth rate predicted for the remaining three months.

Investors will also be closely monitoring developments in the Fed Funds futures market. Following last week’s hotter-than-expected September inflation reading of 8.2%, traders are betting on a 93.4% chance of a 75 basis point rate hike from the Federal Reserve next month, with bets on a fifth consecutive move in December rising to 63.3%.

However, the U.S. dollar, which tracks the value of the U.S. currency against a basket of its counterparts around the world and is frequently used as a gauge of global risk appetite, fell 0.33% in European trading to 112.94 each, indicating a stronger sense of optimism on Wall Street ahead of the opening bell.

In the first few minutes of trading on Wall Street, the S&P 500 gained 87 points, while the Dow Jones Industrial Average increased by 605. The tech-oriented Nasdaq gained 300 points.

After reporting results for the third quarter that beat expectations, Bank of America (BAC) saw a 5% increase in share price. Substantial increases in net interest income helped to balance a significant increase in bad loan provisions.

Following a Friday update from media mogul Rupert Murdoch, which hinted he could re-combine his print media division with Fox Corp (FOXA), nearly a decade after he decided to separate them, News Corp (NWSA) shares rose 3% higher in pre-market trade.

Shares of data-focused cloud computing company Splunk (SPLK) increased 10.4% after activist investors at Starboard Value L.P. disclosed a 5% investment.

European stocks also increased, with Frankfurt’s Stoxx 600 jumping 1.1% and London’s FTSE 100 rising 0.87%.

The yen hit a new 24-year low of 148.65 against the dollar overnight in Asia, as the MSCI ex-Japan index rose 0.55% in the closing minutes of trading. Japan’s Nikkei 225 closed 1.16% lower.

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