Displaying items by tag: bank of america
After a consistent rise in yields in late February and March rates are finally falling. However…see the full story on our partner Magnifi’s site
Bank of America’s Sell-side indicator that tracks equity allocation increased to…see the full story on our partner Magnifi’s site
Bank of America’s head of global research, in conjunction with the head of their private bank, has just given a major midyear update to clients. The message: we are at the start of a bull market. While they think the recovery might be a little bumpy, in the longer term, they believe there is a great economy on the other side and long-term investors would do well to get into the market on down days in the immediate future.”
FINSUM: Inside these broader predictions was another interesting one- so if stocks are going to rise, which sectors gain the most? BOA’s answer was that despite being overbought, tech still seems likely to see the most gains because the pandemic has accelerated areas that benefit them the most, including automation, cloud-computing, and live streaming.
While some are saying that we are in “TINA” mode with equities (i.e. there is no alternative), high yield bonds have been seeing a big influx of demand. Because dividends are drying up in the stock market, high yield bonds are becoming increasingly attractive, and Bank of America thinks they are going to do well. They point out that yields in some bonds are much higher than similar yields on equities in the same sector and they expect spreads to tighten in the coming quarter. “While the easy money was last quarter, we still see many tailwinds to nudge high-yield spreads tighter in Q3...Markets should be treated to plenty of positive data surprises now that economies are exiting their lockdown hibernation…an essential ingredient for leveraged credit to perform.”
FINSUM: This seems like a reasonable call, but we think the positive data surprises might be a stretch. That said, yield-hungry investors will likely keep the high-yield space humming along.
According to COVID Loan Tracker, big banks are not doing a good job getting money moving to those who have applied for PPP loans. In their latest update yesterday afternoon, with around 8,000 companies reporting around $3.5 bn of loans from all 50 states, the large majority are getting approved through small and regional banks. In fact, JP Morgan Chase seems to be the only bank getting any applications approved, as Wells Fargo and Bank of America are showing very few approvals on COVID Loan Tracker, with Citi showing none.
COVID Loan Tracker was started by small business owners Duncan and Rita MacDonald-Korth to help their fellow small business owners understand when PPP and EIDL advance money starts flowing. The site works by crowdsourcing knowledge on applications and loan disbursements. Our goal is to help the small business community and empower journalists with the data they need to keep the government accountable.
Small and regional banks have been leading the charge in approvals all over the country. This is reportedly because many small and regional banks were already set up to process SBA loans as part of their normal course of business before the COVID-19 outbreak. This means they were already familiar and connected to the E-Tran system being used to process the loans by the SBA.