Bank of America Corp. credit outlook got a lift by ratings agency Moody’s Investors Service, which revised its outlook to positive from stable, meaning the credit rating could be raised in the intermediate term. Moody’s rates BofA’s credit at Baa1, which is just three notches above speculative grade, or junk status. The new outlook reflects expectations of “improving profitability in the next 12-to-18 months as expense management efforts generate cost savings and rising interest rates boost revenue,” Moody’s said in its statement Monday. “However, further improvement in the bank’s credit strength will be driven by its ability to adhere to a more conservative risk profile as compared to its peers in addition to sustaining the increase in profitability.” The note comes after President Trump signed executive orders to sharply reduce regulatory oversight of banks, and as the Federal Reserve has suggested it would raise interest rates three times in 2017. The stock, which eased less than 0.1% in midday trade, has soared 37% since the election, while the SPDR Financial Select Sector ETF has run up 19% and the S&P 500 has gained 7.3%.
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