Bank Of America Corp Stock Update

Bank of America stock is likely to attract a number of value investors who are interested in the company’s fundamentals.

As the week comes to an end, it is valuable to see at how large cap United States banks performed even with an intimidating economic environment. I am trying to focus on the stock performance of Bank of America, and help investors to adopt best investment strategy in the middle of recent macroeconomic developments.

On Monday August 24, markets worldwide closed in red when mainland stock market of China crashed. It increases the fear of anther global recession. The day was called “Black Monday,” which witnessed record slumps in stock markets worldwide.

United States investors were left anticipating the next plan on their holdings as China devalues yuan and reduced its interest rate. Currently, China’s one year low is 4.6%. The policy changes rose at the time when the Fed was about to implement its lift off for September and start escalating interest rate at a stable pace. However, the recent developments in the country have possibly put a stop on the strategy of Fed, at least for a time being.

Banking stocks of U.S stock market have been primarily hurt on conjectures that a stable interest rate will affect their incomes in the medium-term. The expected income for the year might be much lower, if interest rates aren’t increased as per the Fed’s original plan.

Bank of America stock news reports that the company stocks along with others plunged to substantial lows on Monday; however, it managed to recuperate but investors are still cautious regarding the future of their investments.

However, Bank of America stock rose more than 2% and reached $16.44 at market close. The company’s stock has gained around 2.10% last week. The share price trades at a 52 week low and high of $14.60 and $18.48, respectively; its market capitalization stands at $167.64 billion.

However, if the interest rate is not increased by Fed, a significant number of investors are expected to sell off their U.S.  banking stocks, as the main reason behind the increase in investor sentiment this year was followed on the back of a potential interest rate hike. Hence, investor sentiment is most likely to suffer if interest rates remain at their current lows.

According to an article on Barron’s, a delay in interest rate hike might lead to investors taking flight, however, it highlights that the step will attract value shareholders, who are more interested in company’s essentials not in event related profits.

Analysts believe that the current situation is ideal for investors, who are looking to buy stock at low that is expected to gain substantial gains in the upcoming period.