Episode summary
Morgan Stanley Joins Wall Street Rivals’ Stock-Trading Boon | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Neil Sipes
Summary
Morgan Stanley’s second quarter reinforced the idea that Wall Street’s trading rebound is still driving bank earnings, with Neil Sipes saying the firm’s results echoed what had already shown up across other big banks. He pointed to strong equity markets, a V-shaped recovery in the quarter, and activity tied to themes like Asia and AI as forces behind the surge in trading revenue, while noting that investment banking pipelines also looked constructive going into the second half.
The bigger strategic story for Morgan Stanley remains wealth management. Sipes said that business is now over half of earnings, acting as the franchise’s ballast when capital markets are volatile. He highlighted 30% margins, 8% organic growth, and an unusually large inflow from IPO-related wealth creation, saying almost half of the roughly $150 billion in net new assets came from IPOs in the quarter.
BlackRock’s quarter was also described as exceptionally strong, with assets reaching $15.3 trillion. Sipes argued that the firm is increasingly shifting growth toward higher-fee products such as active ETFs and private markets, rather than relying only on its traditional passive-investing base. That mix, he suggested, is helping BlackRock keep growing even at enormous scale.
Key takeaways
- Neil Sipes said Morgan Stanley’s trading results were boosted by strong equity markets, a V-shaped recovery, and IPO activity in the quarter.
- He said Morgan Stanley’s wealth management business is now over half of earnings and remains the firm’s through-the-cycle ballast.
- Sipes highlighted 30% margins and 8% organic growth in Morgan Stanley wealth management, with almost half of the roughly $150 billion in net new assets tied to IPOs.
- He said BlackRock’s assets reached $15.3 trillion and that growth is increasingly coming from higher-fee active ETFs and private markets.
- Sipes argued that strong pipelines suggest investment banking could be even better in the second half, though market conditions remain the key risk.
Notable quotes
“the trading business, I think where we stand today, we we've seen really strong equity markets, particularly in the second quarter”
“The through the cycle ballast is wealth management and I think you know that business again market dependent it's firing right we got margins at 30%”
“Almost half of the $150 billion of flows was derived from IPOs in the quarter that Morgan Stanley was involved in”
How the episode opens
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Listen on demand wherever you get your podcasts or watch us live on YouTube. It is all about the big bank earnings. Yesterday, we got a bonanza, five of them.
Today we get the last of the big six banks and that is Morgan Stanley. Black Rockck also reported as well. So let's bring in Neil Cypes.
He is Bloomberg intelligence US financials analyst and Neil the takeaway from the big bank's results yesterday was that trading revenue is gone has gone gang busters and I think we got more proof of that today from Morgan Stanley.
Yeah, we sure did. Uh and I think you've seen it across all the names that I've reported so far. Uh pretty I think a lot of people have been using eyepopping numbers, right?
I mean, beats that are in the billions of dollars in beats, not numbers we're used to, we'll put it that way. And I think, you know, again, the trading business, I think where we stand today, we we've seen really strong equity markets, particularly in the second quarter where you had sort of a V-shaped recovery really at the beginning around the Middle East tensions sort of easing off of a cliff. Uh, and then you had, of course, SpaceX IPO.
There's rumors of more coming either in the second half, maybe they get pushed into 2027. So there's there's tailwinds there that have been driving this activity. There's themes like Asia, there's themes like AI, all of this is sort of fueling uh particularly equities trading.
Uh again, when you think about the trading business,
It's kind of fickle, right?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- bank earnings
- equity trading revenues
- wealth management inflows
- blackrock assets and revenue
- wall street market outlook
Companies and tickers mentioned
- MS
- BLK
- Morgan Stanley
- BlackRock Inc.
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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