Morgan Stanley reported mixed fourth-quarter results early Wednesday, with Morgan Stanley stock rising sharply. The report follows a tough day for banking stocks on Tuesday, following disappointing results from Goldman Sachs, affected by higher expenses coupled with weaker equity trading.
Morgan Stanley Earnings
Estimates: On a per-share basis, Wall Street expected Morgan Stanley earnings to rise 1% to $1.94. Revenue was seen growing nearly 7% to $14.558 billion, according to FactSet. Consensus projected net interest income to remain almost flat vs. a year ago.
Results: The investment banker reported above-forecast adjusted earnings of $2.01 per share, a 3.6% gain. Net revenue rose not quite 7%, to $14.524 bil. — just short of estimates.
Morgan Stanley Stock, Big Bank Stocks
Shares rose 1.8% to 95.73 on the stock market today, reclaiming its 200-day line but well off intraday highs.
Morgan Stanley stock fell 4.9% on Tuesday, tumbling below its 200-day moving average, according to MarketSmith chart analysis. The four-day slide also sent shares more than 8% below a 106.95 buy point, triggering the automatic sell rule. The relative strength line is lagging after a rally for much of 2021.
Among other big bank stocks, Goldman Sachs fell 2% after plunging 7% Wednesday after reporting a worse-than-feared earnings drop on Tuesday. Citigroup and JPMorgan Chase sank 1.6% while Wells Fargo lost 2%, after all three skidded Tuesday.
Bank stocks face mixed prospects moving into 2022. Many banks could benefit from higher net interest income as the Fed moves into a period of rate increases. Those rate increases tend to provide less of a direct boost for investment banks such as Morgan Stanley and Goldman Sachs.
Consumer spending could slow as inflation spikes and the omicron variant of Covid-19 rages.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
