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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Bank of America and Morgan Stanley post another strong quarter

Bank of America reports earnings per share of $0.85, up 66% year on year and Morgan Stanley trumps expectations with M&As seeing the biggest quarterly gain on record.

MorganStanley Source: Bloomberg

Bank of America

Net income for the third quarter was $7.7 billion, with earnings per share coming in at $0.85 beating estimates of $0.71. Net interest income for the quarter was up 10% to $11.1 billion driven by strong deposit growth. The bank posted mixed results in the second quarter, with the revenues missing the mark, but Q3 revenues have picked up once again, increasing 12% to $22.8 billion, above estimates of $21.6 billion. Provisions for credit losses added $624 million on the back of reserve releases given improving economic conditions.

Non-interest income was also a key contributor to earnings in the third quarter, up 14% to $11.7 billion, driven by record asset management fees, strong investment banking, and higher trading revenues. Q3 fixed income revenues were down 5%, driven by a weaker trading environment for mortgages and interest rate products, whilst equities revenue increased 33%, driven by growth in client financing activities, stronger trading performance and increased client activity.

Bank of America Corp (All Sessions) shares are trading 2.2% higher at $44.07 in the pre-market after the earnings release. Shares are up 83% year on year after a strong rebound from the pandemic lows, but they are still below their all-time highs ($54.70) seen in the years before the great financial crisis in 2008. Forecasts are still positive with most brokerages rating it a buy or hold, but short-term headwinds could keep the stock trading below recent highs into the last quarter of the year.

BankofAmerica Source: Refinitiv

Morgan Stanley

Net revenue in the third quarter was $14.8 billion, up from $11.7 billion this time last year. Revenues were higher for key departments, including wealth management, investment banking and institutional securities. Quarterly adjusted EPS was $2.04 versus $1.69 estimated, with diluted earnings per shares coming in at $1.98, up from $1.66 this time last year. The bank benefited from global mergers and acquisitions, with deals reaching new highs at $1.52 trillion in the three months ended September 27. This represents the highest quarterly growth ever, jumping 38% year-over-year.

MS stock is trading up 1.35% in the pre-market at $99.9, but is still 9% down from the highs seen at the end of September. Momentum continues to be strong but the recent pullback is resting on its ascending trendline which means bullish support could start to falter in the short term. We’re likely to see consolidation around current levels with a slightly bearish tilt before the stock achieves a new all-time high.

MorganStanley Source: Refinitiv

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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