Bank of America: Dead Cat Bounce Winner
NEW YORK (TheStreet) -- Bank of America was the winner among the largest U.S. banks on Thursday with shares rising 2% and close at $9.39, partially recovering from Wednesday's painful 7% drop.
The broad indexes continued their post-election decline, all showing 1% declines for the session. Shares of McDonald's Corp.(MCD) pulled back 2% to close at $85.13, after the company reported that its sales global during October were down 1.8% from a year earlier, while domestic sales declined 2.2%. CEO Don Thompson said that although "October's sales results reflect the pervasive challenges of today's global marketplace, I am confident that our strategies and the adjustments we are making in response to the current business headwinds will build sales momentum and drive sustained, profitable growth."
This was the company's first decline in monthly global sales since 2003.
McDonald's said that in the United States, "modest consumer demand and heightened competitive activity offset the impact of local Dollar Menu advertising, the Monopoly promotion, and the recent launch of the Cheddar Bacon Onion premium sandwiches. Moving forward, the U.S. remains focused on enhancing its value leadership position by balancing strong everyday value messaging with affordable premium menu options."
The KBW Bank Index (I:BKX) was down 1% to close at 48.09, with all but three of the index components showing declines on Thursday.
Bank of America chief investment strategist Michael Hartnett early on Thursday wrote that "the macro backdrop is currently one of high liquidity and low growth. But, in 2013, we believe growth expectations will rise as stimulus gains traction and a transition from the Age of Deleveraging (2007-2012) to the Great Rotation (2013 onward) will begin in earnest, led by the US. So our core asset allocation is bullish equities and credit, bearish bonds, neutral commodities. Shorter term, post the election, the fiscal cliff is a big deterrent to risk-taking," and "the reelection of President Obama brings into focus the potentially risk-negative subjects of taxation and financial regulation."