Francis Hunt
Trading Education, Hunt Volatility Funnel & Capital Preservation
Bank of America looks set to go bust from losses on its US Treasury holdings if yields climb high enough. Porter says that when yields hit 7-10%, its equity won't survive, and a bank run is a matter of when, not if. A quoted post says it holds $700B of bonds bought at about 1% yields in 2020, down roughly 40% and hiding about $100B of losses, while the Treasury must refinance $9T and foreign buyers shift to gold. x.comÂ
Post-midterm fiscal tightening and student-loan garnishments will crush US banks and home values. Bessent says massive deficit cuts are coming, while 10 million borrowers in default face wage, benefit and potentially asset garnishment after the midterms; these measures will destroy the economy and banks. x.com x.comÂ
Bank of America's earnings miss extends beyond its one-time fine, so the selloff may not yet be fully priced. Investment-banking fees fell 11%; wait for fee income to stabilize before treating the drop as merely a fine scare. x.comÂ
Bank negativity may be priced in for Goldman Sachs, Morgan Stanley and Bank of America; stable credit and an active deal pipeline could bring relief. Goldman and Morgan Stanley are down about 14% in three months and sit 22% and 17% below their highs, respectively; Bank of America lost 13% in a month. x.comÂ
Bank of America's estimated $92 billion in unrealized securities-portfolio losses and disappointing results support a bearish view despite bullish television coverage. The $92 billion figure is Kass's estimate, which business TV rarely discusses. x.comÂ
The 10-year yield above 5% limits how far the US equity rally can stretch, even as stocks shrugged off the Fed hold. Two policymakers wanted a hike, the 10-year rose to about 5.04%, and bonds sold while all four major indices closed higher. Rates need to cool for the rally to extend. x.comÂ
Bank of America screens attractive at 12.3x on Wide Moat Intelligence, backed by an impressive dividend history. x.comÂ
A 10-year Treasury yield at 5.75% would have US stocks yielding to bonds. Wells Fargo Investment Institute now forecasts the 10-year yield at 5.25%-5.75% by end-2027, up from 4.50%-5.00% previously. x.comÂ
Rising mortgage rates and no apparent Fed concern about yields make BlackRock's bullish turn on Treasuries feel early. Mortgage rates reached 7.4% after seven straight weekly increases. x.comÂ
Bank of America's Q1 shows a bank making money from market chaos, undercutting the recession pricing on large-cap financials. Revenue of $30.27 billion beat estimates by $1.64 billion, net interest income of $15.75 billion topped the $15.37 billion estimate, and equities trading of $2.83 billion beat $2.51 billion as the bank captured volatility. FICC trading missed at $3.50 billion versus $3.78 billion, the one soft spot. x.com x.comÂ
Long-dated US Treasuries look unattractive when AI credit pays twice as much and the market assumes the Fed will bail it out if it breaks. Borrowers who don't care what money costs are setting the price for everyone else, so homebuyers pay through higher mortgage rates and small businesses through layoffs. JPMorgan is marketing a $5B Volta AI loan at roughly 11%, per a news post. The Fed has repeatedly protected big banks and is unlikely to let capitalism play out when banks face pain. x.com … Show more
