5 months ago • 2 mins
What’s going on here?
What does this mean?
After JPMorgan, Citi, and Wells Fargo set the stage with stellar results last week, Bank of America kept the momentum going. The firm cashed in on higher interest rates, raking in money from customers’ payments on loans. And the good news didn’t stop there: its investment banking business also outperformed, growing versus the same time last year and helping prop up results. The upshot of that: both revenue and profit outstripped expectations.
And that brings us to Morgan Stanley: the firm’s dealmaking and trading didn’t hit any high notes, but it did have wealth management to shore things up. The division, which manages the money of the deep-pocketed and well-heeled, posted record revenue last quarter, helping the firm beat expectations overall.
Why should I care?
The bigger picture: Wealth is wealth.
Morgan Stanley chose to lean into its wealth management business after the financial crisis struck, and for good reason. See, the sector’s a steady Eddie, less prone to market rollercoasters and churning out more consistent income than the high-stakes world of trading and dealmaking. Plus, wealth management’s a bit like Hotel California: customers check in, but they rarely leave. That helped it hit the jackpot last quarter – and the firm’s planning to lean in further, with the aim of doubling the segment’s profit in the coming years.
Zooming out: Goldman Sags.
This earnings season has been a win for big US banks so far, but there’s one big dog left to report: Goldman Sachs. And with down-in-the-dumps investment banking as its mainstay, analysts are already predicting one of Goldman’s worst quarters in years. Mind you, though, JPMorgan and Bank of America did manage to beat estimates for their investment banking businesses – so maybe there’s hope Goldman can pull an expectation-beating quarter out of the hat too.
Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.
/3 • Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.