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Morgan Stanley mentioned its wealth shoppers “purchased the dip” after President Donald Trump’s tariffs prompted enormous swings in markets in April, with the jolt of volatility additionally boosting the Wall Road financial institution’s buying and selling enterprise.
The lender reported a 15 per cent enhance in second-quarter web earnings to $3.5bn, helped by greater revenues at its flagship wealth administration division and features at its buying and selling unit, beating analyst estimates of $3.2bn.
“It was very energetic post-liberation day, and we noticed a buy-the-dip mentality from retail [investors] over your entire course of the quarter,” the financial institution’s finance chief Sharon Yeshaya informed the Monetary Occasions.
Trump’s “liberation day” announcement on April 2 of steep tariffs on buying and selling companions despatched markets reeling, however they stabilised after the president paused his most punishing levies the next week. Particular person buyers have offered a key ballast for markets, analysts mentioned on the time.
Morgan Stanley added that its wealth administration enterprise, which has about $6tn in shopper property and consists of on-line buying and selling platform ETrade, was boosted by “greater ranges of shopper exercise” through the quarter. Revenues on the division jumped 14 per cent to $7.8bn in contrast with the identical interval final yr.
“Retail engagement was particularly sturdy in April, as shoppers responded to elevated market volatility and exercise continued with momentum on the finish of the quarter,” Yeshaya added on a name with analysts on Wednesday.
Web new property at Morgan Stanley’s intently watched wealth administration enterprise got here in at $59.2bn through the quarter.
This was forward of analysts’ expectations for about $45.8bn and considerably greater than the $36.4bn it introduced in through the second quarter final yr. The determine is adopted intently by buyers as a gauge of the enterprise’s progress trajectory.
In the meantime, revenues on the financial institution’s equities buying and selling enterprise jumped 23 per cent on the identical interval final yr to $3.7bn, whereas fastened earnings buying and selling climbed 9 per cent to $2.2bn.
The outcomes largely mirrored Wall Road rivals, which additionally benefited from the current market turbulence triggered by Trump’s tariff bulletins.
The sturdy efficiency of the buying and selling enterprise offset a 5 per cent decline in revenues at Morgan Stanley’s funding banking division through the quarter, which it blamed partially on “decrease accomplished M&A transactions”.
Ted Decide, Morgan Stanley’s chief govt, informed analysts that the financial institution had seen an uptick in funding banking exercise in June.
Morgan Stanley was buying and selling about 1.8 per cent decrease in pre-market buying and selling in New York.
