Bank Of America Faces Market Warnings And Bonus Discontent

Bank of America (BofA) has found itself at the center of multiple crosscurrents as January 2026 draws to a close, with its fortunes reflecting broader market exuberance, shifting internal dynamics, and evolving investor sentiment. The global equity landscape is flashing warning signs, even as BofA’s own financial results and compensation practices come under scrutiny from both within and outside the company.

According to strategists at Bank of America, global equities are now in overbought territory—a red flag for risk assets. In a note led by Michael Hartnett, the bank revealed that as of January 28, 2026, a striking 89% of MSCI stock indexes were trading above their 50-day and 200-day moving averages. This figure breaches the 88% threshold that Bank of America’s strategists view as a critical sell signal. The warning comes at a time when many market participants are riding a wave of optimism, but Hartnett and his team caution that such levels have historically preceded corrections. Their message: caution may be warranted for those who have grown comfortable with the market’s relentless climb.

Yet, while BofA’s strategists sound alarms about overheating markets, inside the bank, the mood is anything but buoyant for many employees. Monday, January 26, 2026, was bonus day for the bank’s London-based EMEA equities professionals—but for many, it proved a disappointment. Multiple traders and sales staff expressed frustration that their bonus increases fell well short of expectations. As reported by eFinancialCareers, some staff had anticipated increases in the range of 10-20%, but the average increase appeared to be closer to 2%. For some middle and back office employees, bonuses were reportedly zeroed out entirely.

“We smashed it last year,” insisted one equities professional, referencing the EMEA team hitting its budget for equities by September 2025. However, these claims have not been independently verified by the bank. The disappointment was not limited to front-office staff. Equity researchers, including those covering broad sectors such as energy, clean energy, defense, aerospace, and healthcare services, also voiced complaints about under-compensation relative to their workload. One researcher claimed the bonus pool for research increased only by single digits in percentage terms, leaving analysts feeling underappreciated despite their efforts.

Part of the frustration appears rooted in the bank’s global performance dynamics. While BofA’s global equities revenues rose by 23% in the last quarter of 2025 and by 16% over the year, these figures lagged behind competitors. JPMorgan and Morgan Stanley posted full-year equities revenue increases of 33% and 28% respectively. This relative underperformance seems to have influenced bonus allocations, with multiple insiders reporting that European bonuses were diverted to cover shortfalls in the U.S., where equities traders performed poorly in the fourth quarter of 2025. Structured products and equity derivatives professionals were said to have been paid relatively well, while cash equities staff and researchers received less favorable treatment.

The repercussions of these compensation decisions are already being felt. A London research headhunter reported a surge in interest from BofA equity analysts seeking new roles, attributing the movement to poor pay and a sluggish European IPO market in 2025. “I don’t think they understand the dynamics of research,” the headhunter remarked, highlighting a disconnect between expectations and reality for many employees. The sense of disappointment was compounded by a pre-Christmas survey, which found that BofA employees across business areas had, perhaps optimistically, expected bonuses to increase by an average of 60%.

Meanwhile, on the investor front, Bank of America’s stock performance has been robust, even as some institutional investors have trimmed their holdings. Channing Global Advisors LLC reduced its stake in BofA by 19.4% during the third quarter of 2025, selling 10,423 shares and holding 43,172 shares valued at approximately $2.23 million as of its most recent SEC filing. Despite this reduction, Bank of America remains the firm’s 18th largest holding, accounting for 1.5% of its portfolio. Other hedge funds, such as Quaker Wealth Management LLC and Steph & Co., moved in the opposite direction, increasing their holdings in BofA during 2025. In fact, institutional investors and hedge funds collectively own about 70.71% of the bank’s stock.

As of January 30, 2026, Bank of America stock opened at $53.07, giving the company a market capitalization of $387.54 billion. The share price has seen a 52-week low of $33.06 and a high of $57.55, reflecting the bank’s resilience amid market turbulence. The company’s price-to-earnings ratio stands at 13.86, with a price-to-earnings-growth ratio of 1.27 and a beta of 1.29—metrics that suggest both stability and moderate risk relative to the broader market. The stock’s fifty-day moving average is $54.12, while the 200-day moving average is $51.48, underscoring its recent upward momentum.

Financially, Bank of America has delivered solid results. On January 14, 2026, the bank reported earnings per share of $0.98 for the fourth quarter of 2025, beating consensus estimates by $0.02. Quarterly revenue came in at $4.53 billion, up 12.3% compared to the same period the previous year. Bank of America’s return on equity reached 11.07%, with a net margin of 16.23%. Analysts forecast the bank will post earnings per share of 3.7 for the current year. The consensus among Wall Street analysts is a “Moderate Buy” rating, with a consensus price target of $60.00, according to MarketBeat. Notably, Citigroup raised its target price for BofA to $62.00, and Hsbc Global Res upgraded the bank from a “hold” to a “strong-buy” rating earlier in January.

Bank of America’s business model remains broad and diversified. Headquartered in Charlotte, North Carolina, the bank offers a wide array of services, from retail banking and lending to asset management and capital markets. Its reach spans individual consumers, small and middle-market businesses, large corporations, governments, and institutional investors. The firm’s consumer-facing offerings include checking and savings accounts, mortgages, auto loans, credit cards, and small business banking, all supported by a robust nationwide branch network and digital channels.

Despite the current market optimism and strong recent financial results, the warning from Bank of America’s own strategists serves as a sobering counterpoint. With global equities at historically overbought levels, and internal tensions over pay and performance bubbling beneath the surface, BofA faces a complex landscape as it moves further into 2026. For investors, employees, and market watchers alike, the coming months will reveal whether caution or confidence proves to be the wiser path.