The weakness in the equity trading will continue to hurt the earnings of Morgan Stanley (NYSE: MS) for the third quarter of 2019, which has been set for Thursday before the market opens. The results could also be pressurized by low-interest rates and the two Federal Reserve rate cuts.
The market experts fear the economy slipping into recession and the Fed is trying to lower these chances by two rate cuts during the third quarter. The trading activities, which could have a relatively high impact on the results, remained sluggish due to the corporate lending slowdown and trade war concerns.
The company has been struggling to achieve revenue growth in the past three successive quarters. Investors believe Morgan Stanley could continue to fall due to possible unstable capital markets in the second half and interest rate headwinds.
Morgan Stanley is expected to face additional costs, margins pressure, and an unstable loan portfolio. The retail investors are likely to continue being cautious given record market level, short intra-quarter market swings, and heightened levels of uncertainty.
Analysts expect the company’s earnings to decrease by 5.10% to $1.11 per share and revenue to decline by 2.40% to $9.63 billion for the third quarter. The company has surprised investors by beating analysts’ expectations thrice in the past four quarters. The company’s earnings estimates were revised downward several times in recent weeks.
For the second quarter, Morgan Stanley reported a 10% drop in earnings due to continued weakness in the equity trading business. The top line declined by 3% as a sharp fall in bond and equity trading at institutional securities offset the modest growth in investment banking and wealth management segments.
The company’s peers Citigroup (NYSE: C), JP Morgan (NYSE: JPM), and Wells Fargo (NYSE: WFC) will be publishing results for their most recent quarter on Tuesday while Bank of America (NYSE: BAC) is set to release its third-quarter report on Wednesday.
Listen to on-demand earnings calls and hear how management responds to analysts’ questions
Most Popular
What to look for when CVS Health (CVS) reports Q3 earnings
Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain
eBay (EBAY): A few factors that helped drive growth in Q3 2024
Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,
CVX Earnings: Chevron reports lower revenue and profit for Q3 2024
Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to