Earnings Reports

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Bank of America (BAC),  America's second-biggest bank by assets is scheduled to report second-quarter earnings before the bell on Tuesday. BAC follows other money center major banks PNC Financial (PNC) Citigroup (C), Wells Fargo (WFC) and JPMorgan (JPM) who report Friday morning. Analysts expect more of the same but with softer trading profits, loan growth will be informative. 

Since Donald Trump won on Election Day has been a huge run higher on BAC and the other bank stocks. Most recently, the banking sector received a boost after the largest U.S. banks passed Fed stress tests and were allowed to raise dividends and share buybacks. and were allowed to raise dividends and share buybacks. 

Bank of America Consensus Forecast
EPS of $0.43, compares to $0.41 EPS  in both the Q216 and Q117. Analysts have lowered expectations from $0.47 EPS on lower trading revenue.

Morgan Stanley on Trading Volatility

"Volatility has been very low this quarter, which has certainly led to somewhat of a softer trading environment, especially in the fixed income and equity markets," noted Morgan Stanley chief financial officer John Gerspach last month. "So given that slower trading environment, we would expect revenues in our fixed income and equity markets to be down year-over-year in the -- I guess I'll call it -- the low double digits range, maybe 12% to 13%."

Caution hangs over the sector if congress can pass regulatory rollbacks after the GOP's unsuccessful attempt to replace the Affordable Care Act. Auto and student loans also overhang the banking and finance sectors. 

Previous Quarter Earnings
Bank of America $BAC Earnings Beat Estimates With Strong Trading Result
Bank of America $BAC Earnings Beats on Trading Income Rise

The bank rally had been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The Federal Reserve decision to raise rates has also helped banks.  The new surge in home prices has also buoyed optimism for the mortgage business and banks profits thereto.

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