Not So Fast! One Warren Buffett's Core Positions at Berkshire Hathaway May Not Get the Heave-Ho by Successor Greg Abel After All.

Bank of America (BAC) stock fell 4.7% after Q3 earnings missed estimates, with revenue at $30.12B and EPS at $0.91, excluding a $1.2B regulatory fine. Investment banking fees and trading revenue declined, but net interest income rose 1.2B year over year. The bank was fined for anti-money-laundering violations, but management assured remediation efforts are underway.

The U.S. fiscal year 2026 ended with a $2 trillion budget deficit, up 12% Y/Y. Bond markets and bank stocks (JPM, WFC, BAC, GS) have sold off. Utility ETF (XLU) bottomed at $39.03, now at $42.21 with a 3% dividend.

Geopolitical tensions in the Strait of Hormuz have caused oil prices to surge, leading to inflation and a crisis in the US banking sector. According to Bloomberg, Bank of America (BAC), State Street (STT), and Citigroup (C) shares dropped 18%, 14%, and 10% respectively. The Fed raised rates to 4% to combat inflation, further straining banks. The KBW index of major US banks fell 13% from its August peak, marking its longest decline since 2008.

The US Office of the Comptroller of the Currency (OCC) reviewed nine banks, finding discriminatory practices against customers based on political or religious views. JPMorgan Chase's subsidiary WePay closed accounts linked to conservative merchandise and organizations. JPMorgan shut down WePay and denied altering records for political reasons. Other banks like PNC and Capital One also faced allegations of discrimination. The OCC plans to assess regulatory changes to prevent such practices.

Bank of America (BAC) hired 1,000 contractors to fix software vulnerabilities found by AI models like Anthropic’s Mythos. CEO Brian Moynihan disclosed this during the Q3 earnings call, noting costs of 'a couple hundred million plus' for remediation. The bank expects these costs to decline as the backlog clears. BAC shares fell 8% on earnings day. The bank also reported 130 AI projects with expected savings rising to $700M in 2027.

Major U.S. banks have seen significant declines from their summer peaks, with Goldman Sachs down 24%, Capital One down 25%, and others ranging from 11% to 19%. JPMorgan missed earnings estimates, reporting $5.57 per share versus the expected $5.85, due to a slowdown in investment banking and trading revenue. Executives cited market volatility and geopolitical risks as factors affecting business.