Shares of Bank of America Corp (NYSE:BAC) are falling Friday afternoon, caught in a broad market sell-off driven by a one-two punch of alarming U.S. economic data and an escalation in geopolitical tensions.
What To Know: The primary catalyst was a weak July jobs report. The U.S. economy added a mere 73,000 jobs, far below the 190,000 expected, while prior months’ figures were revised down by a combined 258,000. For a bellwether bank like Bank of America, such a clear sign of a cracking labor market signals a looming recession.
This directly implies a future of potentially slowing loan demand and, more critically, potentially rising loan defaults from consumers and businesses, threatening the bank’s core profitability.
Compounding these economic fears, the market is now aggressively pricing in Federal Reserve rate cuts to combat the slowdown. The 2-year Treasury yield plunged roughly 18 basis points to 3.78%, signaling that the lower interest rate environment expected to hurt bank profitability by compressing net interest margins is fast approaching.
The second major blow came from President Donald Trump’s nuclear threat toward Russia, which sent Wall Street’s “fear gauge,” the VIX, soaring 27%. In such a severe risk-off environment, investors dump economically sensitive stocks.
As a pillar of the financial system, Bank of America is on the front lines of this flight to safety, with its stock sold off alongside the broader market as investors brace for heightened global uncertainty and economic fallout.
Benzinga Edge Rankings: An analysis using the Benzinga Edge stock ranking system, which provides four critical scores to evaluate a company’s investment profile, offers a more nuanced view of Bank of America. The data indicates the company’s primary strength lies in its growth prospects, earning a high Growth score of 76.04.
The stock also possesses healthy Momentum with a score of 67.16, suggesting a solid recent price performance trend. However, its Quality score, a measure of financial health and profitability, is more average at 51.24.
Price Action: According to data from Benzinga Pro, BAC shares are trading lower by 3.56% to $45.64 Friday afternoon. The stock has a 52-week high of $49.30 and a 52-week low of $33.06.
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How To Buy BAC Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Bank of America’s case, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
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