Bank of America Corp. (BAC) shares advanced on Wednesday, rising approximately 0.6% to $54.75, as management provided an upbeat update on second-quarter trading revenue. The positive sentiment was driven by comments from Co-President Jim DeMare, who suggested that the bank's markets revenue could exceed the previously stated 15% year-over-year growth target.
Speaking at the Morgan Stanley U.S. Financials Conference on Tuesday, DeMare highlighted that the equities trading division is the primary driver of the anticipated outperformance. According to reports, he indicated that the bank is likely to deliver results "a little better" than the 15% growth forecast, a statement that quickly captured investor attention. This is a notable upgrade from the guidance provided by CEO Brian Moynihan on May 27, when he projected a 15% increase in trading revenue for the second quarter compared to a year earlier.
The improved outlook is significant for Bank of America, as its global markets unit has already achieved 16 consecutive quarters of revenue growth. A seventeenth consecutive quarter would reinforce the narrative that trading is evolving into a more stable and recurring component of the bank's earnings, rather than merely a volatile boost from market fluctuations. The comparison base is also noteworthy, as the year-ago quarter was impacted by tariff-related disruptions.
Bank of America's stock performance on Wednesday stood out relative to its peers. JPMorgan Chase (JPM) slipped 0.4%, Citigroup (C) dropped about 0.8%, while Wells Fargo (WFC) added nearly 0.2%. The SPDR S&P Bank ETF (KBE) was up approximately 0.3% during the same period.
Beyond trading, DeMare provided an encouraging update on the dealmaking environment. He described the overall climate as solid, noting a strong IPO pipeline. He emphasized that clients are primarily delaying, rather than canceling, transactions, even amid geopolitical uncertainties related to the U.S.-Israeli conflict with Iran. "Nothing really of any note is being canceled," he told investors.
However, the positive trading outlook is not without risks. A reversal in equity volumes, a decline in market volatility, or a slowdown in client activity could weigh on trading revenue. Additionally, geopolitical shocks could escalate from delaying deals to halting them entirely.
On the regulatory front, Bank of America faces fresh scrutiny. Reports indicate that the U.S. Justice Department has issued subpoenas to several major banks, including Bank of America and JPMorgan, regarding potential improper account closures for political reasons — a practice known as "debanking." Bank of America declined to comment on the matter.
Investors are now looking ahead to the bank's second-quarter earnings report, scheduled for Tuesday, July 14. The key question will be whether the markets business delivers on the 15% growth target mentioned by Moynihan or if DeMare's more bullish signal materializes in the actual revenue numbers.
