Bank Stocks on the Rise as Likelihood of a Fed Rate Hike in March Spikes: Today's Reports on Bank of America and Citigroup
NEW YORK, NY / ACCESSWIRE / March 2, 2017 / Banking stocks have continued to be some the biggest benefactors of the post-election rally as President Trump has pledged an easier regulation environment for businesses. Shares of bank stocks were sent higher Wednesday after President's Trump speech invoked confidence into the U.S. economy and comments made Federal Reserve Officials hinted at a rate hike in March. The SPDR KBW Bank ETF spiked 3.17 percent to close at 46.56, up 7.11 percent for the year. The likelihood of a rate increase in March spiked to more than 66 percent Wednesday from just 35 percent Tuesday, according to CME Group's FedWatch tool.
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"Chances are that rate hikes are coming through faster and the President's speech yesterday showed that tax reform, which will hugely benefit the banks, is a key policy item for the administration," Keefe, Bruyette & Woods analyst Brian Kleinhanzl said. "Faster interest rate hikes would come as a relief to banks that have been reeling under pressure to grow their revenue over the last several years."
Let's Take a Closer Look at Today's Trending Tickers
Bank of America's shares jumped 3.64 percent to close at $25.50 a share on Wednesday. The stock traded between $25.22 and $25.61 on volume of 143.95 million shares traded. The company reported earnings per share of $0.40 on revenue of $19.99 billion, mainly due to improvement in credit quality and continued cost cutting. Analysts' expectations had called for adjusted earnings per share of $0.38 on revenue of $20.76 billion, according to data from Bloomberg. The company has reported revenue of $10.3 billion net interest income and expects net interest income to increase by $600 million in first quarter of 2017, assuming current level of interest rates. Shares of Bank of America have gained approximately 15.38 percent year-to-date.
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Citigroup's shares increased 2.89 percent to close at $61.54 a share on Wednesday. The stock traded between $61.00 and $61.94 on volume 26.42 million shares traded. The company reported earnings of $3.57 billion, or $1.14 per share, for the fourth quarter of 2016, compared to $3.34 billion, or $1.02 per share, a year ago. Revenues for the quarter totaled $17.012 billion, a decrease of 8.0 percent year-over-year. The Company has explained that drop in revenue was mainly due to absence of net gains on asset sales in Citi Holdings. Consensus analyst estimates had called for earnings of $1.12 a share on revenue of $17.3 billion, according to analysts polled by Reuters. Shares of Citigroup have gained approximately 3.55 percent year-to-date.
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Today's Features Includes:
Bank of America Corp. (NYSE: BAC)
Citigroup Inc. (NYSE: C)
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