Behind the Idea #52: Bank Of America And The Yield Curve
Banks are opaque, thorny, and full of questions. They are also popular investments. Seeking Alpha author Eric Basmajian argues that banks are going to face a tough 2019, with Bank of America as a leading example. But the company's Q4 earnings report was well received. So what's going on? Behind the Idea tries to peel apart the layers and understand the company's prospects.
Topics covered:
3:30 minute mark – Defining terms of engagement with a bank stock 6:00 – The flattening yield curve, and how does Q4 fit into this? 11:00 – Where does the yield curve go and what can banks do within that environment 14:30 – The threat of quantitative tightening and how we misunderstand it 20:30 – How much does Fed behavior actually affect interest rates anyway, and deconstructing market clichés. 28:15 – Housing slowdown as a renewed culprit for BAC’s vulnerability 36:00 – The cyclical nature of bank stocks 39:00 – Why did the stock pop? 42:00 – The final breakdown and whether BAC can be differentiated
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