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Market Overview

Bank Of America Shares On The Move: Here's Why

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While the overall market is witnessing a slump, Bank of America Corp (NYSE: BAC) was one of the prominent losers Tuesday.

The stock opened significantly lower and saw a lot of activity, which is being attributed to a presentation made by Bank of America CEO, Brian Moynihan.

CNBC’s Kayla Tausche recently reported on the move in Bank of America’s stock and the comments made by Moynihan in his presentation.

Related Link: UPDATE: Bank Of America Reiterates On Liquidity Services

Can Comments Kill?

In addressing Moynihan's comments, Tausche explained, “Bank of America’s CEO and chairman Brian Moynihan [caused] that stock to move when he began his presentation with an overview of Bank of America’s businesses and where it will get its revenue.”

“He commented in particular about a slide in trading revenue in the fourth quarter compared to the third quarter of this year and the fourth quarter of last year,” Tausche said, highlighting touchy elements of the presentation.

Why Would This Elicit Such A Reaction?

Tausche said, “Why this is moving the stock so much and why this is so important to the banking sector is because[...]amid all of the low volatility over the last year and the slowdown other banks saw, Bank of America’s trading actually held up fairly well.”

“So, for that company and that particular market to see a slowdown, that’s going to cause investors to think that maybe that could be endemic across the banking sector for this quarter as yields have re-tested those lows after the October volatility.”

Is It 'Worth Being In' The Business?

Tausche pointed out Moynihan's perspective toward the business, “He talked about how difficult it is to be a mortgage servicer; that that is really the toughest business to be in right now from a cost perspective and at some point they will have to decide whether it’s a business worth being in.”

 

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