Bank of America: Q3 Call Highlights on Economy, 2022 Outlook, Op. Leverage & Tapering

(Free on Substack) Company Update (BAC US) (Buy)

A version of this has also been published on my Twitter account.

Introduction: We highlight some Bank of America (“BAC”) management comments from the Q3 2021 earnings call on Thursday (October 14) on the US economy, 2022 outlook, operational leverage and central bank “tapering”, as a supplement to our review of the results.

US Economy Growing 5%+ & Surpassing Pre-COVID Level

BAC management struck a confident tone on the US economy, highlighting its research team’s forecasts that it will grow 5.5%+ in 2021 and 5.2% in 2022. This means that the U.S. economy “is now as large as it was in pre-pandemic”. While there are issues in labour supply and supply chains, “the economy is moving along”.

“The U.S. economy continue its reopening trajectory following the modest slowdown from the surge in cases caused by the Delta variant. While there's been some discussion around the slowdown, I would just note that U.S. economy is now as large as it was in pre-pandemic. Our own research team … expects the …