Morgan Stanley’s stock-traders delivered first-quarter revenue that exceeded analyst predictions, as Wall Street’s biggest banks continue to benefit from turbulence ignited by President Donald Trump’s policies.
The firm earned a record $4.13 billion from equities trading in the first quarter, up 45% from a year ago and ahead of expectations. The firm’s closely watched wealth business saw higher-than-anticipated net new assets of $93.8 billion.
The results Friday, along with those of JPMorgan Chase & Co. and Wells Fargo & Co., offer investors a look at how the US economy fared in the early days of Trump’s second term. Beyond the numbers, though, investors are eager for executives’ predictions on how consumers and companies will contend with economic uncertainty following Trump’s tariff announcements which have whipsawed markets.
“The simple truth today is that we do not yet know where trade policy will settle, nor do we know what the actual transmission effects will be on the real economy,” Chief Executive Officer Ted Pick said on a conference call Friday. “As the year progresses, markets will calibrate further clarity on trade policy against the tax and deregulatory pillars of the agenda.”
Shares of Morgan Stanley, down about 15% this year through Thursday, were up about 1% at 9:46 a.m. in New York trading.
Investment-banking fees rose 8% in the quarter, slightly more than expected, with advisory fees of $563 million, equity underwriting coming in at $319 million, and debt-underwriting at $677 million.
Dan Simkowitz, the firm’s co-president, said last month that M&A announcements and new equity issuance are “certainly on pause” as clients assess Trump’s policy changes. Still, it “just gets paused, it doesn’t get deleted,” he said, adding that deal flow would probably stay “a little light” until there’s more policy certainty.
Trump’s election came with promises of tax cuts and deregulation, fanning optimism of a deal boom. So far, his policy changes have largely had the opposite effect, reigniting inflation fears and forcing companies to pause or pull some deals.
The bank earned $692 million in “other” revenue in its investment bank, versus $242 million a year ago. Much of that increase was tied to offloading loans of Elon Musk’s social-media platform X, according to a person with knowledge of the matter. Morgan Stanley said in its earnings statement that the increase was “principally driven by realized gains on the sale of corporate loans held-for-sale,” without elaborating on which loans.
Morgan Stanley’s non-interest expenses came in at $12.1 billion in the quarter, higher than expected. That included severance costs of $144 million after the firm laid off about 2,000 employees in March to keep a lid on costs. The reductions were across business segments and geographies and impacted about 2% of the bank’s workforce at that time, according to its earnings statement
Morgan Stanley’s results come following Pick’s first year atop the firm. Pick, who’s best-known for resurrecting the company’s equities business after the financial crisis, became chairman of the board earlier this year, replacing James Gorman, who ran Morgan Stanley for more than a decade.
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