Why Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo Are Rising Today
Shares of the large U.S. banks rose today along with the broader market, due to higher guidance from JPMorgan Chase (NYSE: JPM) and recent bullish comments from Bank of America (NYSE: BAC).
Shares of JPMorgan Chase traded roughly 6.7% higher as of 11:20 a.m. ET today, shares of Bank of America were up 6.3%, shares of Citigroup (NYSE: C) traded 6.3% higher, and shares of Wells Fargo (NYSE: WFC) were up 5.3%.
JPMorgan Chase at its investor day this morning raised its guidance for full-year net interest income (NII) -- the profits banks make on loans, securities, and cash after funding those assets -- to $56 billion from $53 billion just a few months ago. The bank expects the Federal Reserve to lift its overnight benchmark lending rate, the federal funds rate, to a range of 2.75% to 3% by the end of the year. Higher rates tend to benefit NII because most banks have more variable-rate assets that see their yields reprice higher with the federal funds rate than liabilities. JPMorgan also said the bank now has a chance of generating a 17% return on tangible common equity, which is the bank's long-term goal that it didn't think it would achieve earlier this year.
Source Fool.com
