Morgan Stanley Results May Signal BofA, Goldman Rally Has Legs

(Bloomberg) -- Investors will keep an eye on Morgan Stanley’s fourth-quarter results, due Thursday at 7am, for signs bank share outperform is set to continue.

Morgan Stanley stock is gaining 1.6 percent in pre-market trading and has rallied 12 percent so far this year, compared to the S&P 500 financials index, which up 6.6 percent, and a 4.4 percent gain for the broader S&P 500. Investors have cheered reports this week from Bank of America Corp., which has risen 15 percent year-to-date, Goldman Sachs Group Inc., up 18 percent, and Citigroup, up 19 percent. JPMorgan Chase & Co. is lagging, after its earning miss, with a 5 percent gain.

One warning came from KBW analyst Brian Kleinhanzl, who wrote in a note that BofA “posted a very solid quarter and estimates,” and boosted his price target. At the same time, he said BofA’s stock move on Wednesday “more than captured the higher earnings. From here, we are waiting on new catalysts to emerge.” Shares closed up 7.2 percent at the highest since Dec. 3 and are gaining 0.2 percent pre-market.

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