BAC

[Vantage 8 dude]

Why the drop in pps for BAC? I thought rising interest rates would boost the share price of banks.
TIA

Well have you checked most of the banks of late? By no means is BAC the one and only one that's really taken it on the "chops". Could be a number of things: the overall market weakness (no doubt some of it), the worries about the potential slowing economy from higher interest rates/Chinese growth slowing, also there's apparently been some disappointment in loan growth for many of the banks. Despite our relatively strong economy the loan growth you've typically seen at banks has to some degree been less than expected. One reason MAY be that far more nontraditional (other than banks) sources of lending are available that were in existence 3-5 years ago.

One last potential reason: some are betting that the overall underperformance of financials of late are flashing a yellow  warning light for future slowing economic growth. Remember that the market ANTICIPATES changes in economic/financial fundamentals well before the actual data proves it.

[Boardon Hamsay]

Well have you checked most of the banks of late? By no means is BAC the one and only one that's really taken it on the "chops". Could be a number of things: the overall market weakness (no doubt some of it), the worries about the potential slowing economy from higher interest rates/Chinese growth slowing, also there's apparently been some disappointment in loan growth for many of the banks. Despite our relatively strong economy the loan growth you've typically seen at banks has to some degree been less than expected. One reason MAY be that far more nontraditional (other than banks) sources of lending are available that were in existence 3-5 years ago.

One last potential reason: some are betting that the overall underperformance of financials of late are flashing a yellow  warning light for future slowing economic growth. Remember that the market ANTICIPATES changes in economic/financial fundamentals well before the actual data proves it.

Agree. I think the price movement in bank stocks is much more about concerns with slowing loan growth (auto cycle slowing, home sales struggling due to short supply and increasing mortgage rates, general economic slowing concerns. etc.) than the benefits from higher rates. 

I think BAC and other banks are ultimately heading towards book value based pricing, which for BAC is somewhere around $23.40 per share.

[Vantage 8 dude]

Agree. I think the price movement in bank stocks is much more about concerns with slowing loan growth (auto cycle slowing, home sales struggling due to short supply and increasing mortgage rates, general economic slowing concerns. etc.) than the benefits from higher rates. 

I think BAC and other banks are ultimately heading towards book value based pricing, which for BAC is somewhere around $23.40 per share.

One further piece of insight: over the past several days there has been a very high level meeting between the very upper levels of BAC management and many of the major department heads/portfolio managers. Apparently there's been some feeling of disconnect between the two as the level of investment banking activity at BAC has fallen substantially over the past year or so. There's also apparently between a growing dissatisfaction in the latter's ranks as many supposedly feel that the very upper levels of management have not adequately supported them in some areas. As a result there have been a number of mid-level (and even a few higher) defections/resignations from the bank. This is something that obviously warrants being monitored.

[HawgWild]

Well, that was a nice move by BAC today.