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In trading, has better than expected become good enough?

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Kind of crappy but better-than-expected with little visibility over the future quarters – that’s been the consistent narrative surrounding Wall Street trading during second quarter earnings calls.

The two iconic names in banking – Goldman Sachs and J.P. Morgan – beat expectations on Tuesday on the back of strong advisory and underwriting performances. Trading revenues at both banks were down, as expected, but it wasn’t quite the slaughter some within the firms had publicly suggested.

Fixed income revenue was down 10% at Goldman and 15% at J.P. Morgan, which isn’t good, but many had warned of as much as a 25% drop. Equities trading revenue was down 13% and 10%, respectively.

It appears June was a pretty strong month that helped save the quarter for each bank’s trading business. So has the tide turned? No one really knows, but if you listen to J.P. Morgan Chief Financial Officer Marianne Lake, you aren’t walking away brimming with optimism. She said that June’s trading momentum has so far not carried into July.

“The declines in revenues weren’t as severe as everyone was expecting but the bar was set pretty low,” Gerard Cassidy, analyst at RBC Capital Markets, told the Financial Times.

On the plus side, each firm’s traditional investment bank booked solid quarters, with hot M&A and underwriting units doing much of the heavy lifting. But those businesses will raise and fall as market conditions change. Currently, the environment is ripe for deals and IPOs.

The real question is if Wall Street banks will ever see their trading businesses make a full comeback. Reports on how trading floors at RBS and UBS have become ghost towns aren’t terribly encouraging.

Is the problem seasonal or systemic? Still no clear answers there.

Click here for a full breakdown of hiring and pay at J.P. Morgan and Goldman during Q2.

KPMG Wants New Recruits (eFinancialCareers)

KPMG is hiring. The Big Four firm is looking for 5,000 fresh recruits with a particular focus on advisory. But they’re not just looking for the same old candidates.

BofA Hiring Juniors (FT)

Bank of America will hire roughly 40% more analysts and associates this year as it seeks to lessen the workload of junior bankers.

Is the Lifestyle Still Worth It? (eFinancialCareers)

Banking pay has fallen but the banking lifestyle remains the same. Is the industry really so unappealing though?

‘Why Didn’t the SEC Know?’ (Business Insider)

Here’s the story of a 25-year Wall Street veteran who shorted a booming penny stock because he thought it was a scam. He was right, yet he still lost enough money for his company to take his seat away. He blames the SEC.

Premature Celebration (Bloomberg)

Morgan Stanley Chief Executive James Gorman intimated earlier this year that talent poaching in wealth management is slowing as firms recognize the pains associated with the pricey game of musical chairs. Well, he just lost four brokers with $650 million in client assets to a new firm. And Prudential just lost a top money manager.

Never Turn the Faucet Off (Bloomberg)

Experts have suggested to the CFTC that high-speed traders be obligated to buy and sell futures contracts during good times and bad for the market to operate effectively. An interesting idea, though probably one that won’t happen.

Hot Strategy (Bloomberg)

Hedge funds that typically invest in distressed securities are having a hot year. Activist and distressed securities funds are where it’s at in 2014.

Buzz Around the Office

Bargain of a 15th Century Castle (Buzzfeed)

Bloomberg terminals sport their own classified ad service similar to Craigslist that allows bankers to barter on goods, only instead of used hubcaps they’re selling planes, cars and castles.

Quote of the Day: “I never understand what you’re saying. Ever.” – Pimco founder Bill Gross to a French-born VP during an investment committee meeting. The VP resigned the next day.

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