Bank of America Corp (NYSE:BAC) shares hit a new 52-week high of $47.49 during Monday’s session. The surge follows news this month marked by the Federal Reserve's decision to cut interest rates and Donald Trump's victory in the 2024 presidential election.
Fed's Rate Cut Boosts Financials
The Federal Reserve lowered the federal funds rate by 0.25 percentage points on Thursday, bringing the target range to 4.5%-4.75%. This marked the lowest level since early 2023 as policymakers aim to sustain economic growth while inflation moderates. The Fed emphasized that inflation has "made further progress" toward its 2% target but remains "somewhat elevated."
For banks like Bank of America, rate cuts are a double-edged sword. Lower rates can pressure net interest margins, but they also stimulate loan demand, particularly in mortgage and consumer lending, benefiting institutions with a strong retail banking presence.
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Market Reaction Toward Trump's Policies
Trump's election victory, coupled with a Republican-controlled Senate, has fueled expectations of pro-growth policies. Proposals to extend corporate tax cuts, roll back climate regulations and increase infrastructure spending could drive economic growth and enhance banking profitability.
Meanwhile, Trump's proposed tariffs on imports could nudge inflation higher, prompting the Fed to maintain tighter monetary conditions, a potential boon for banks.
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How To Buy BAC Stock
By now you're likely curious about how to participate in the market for Bank of America – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, BAC has a 52-week high of $47.49 and a 52-week low of $29.32.
