(Bloomberg) — Wall Street’s trading bonanza is poised to keep rolling.
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The biggest US banks — set to kick off a marathon Tuesday with five of those firms reporting second-quarter earnings — are reaping the benefits of a volatile past few months that’s spurred more action from clients wanting to trade. Analysts expect JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley to report nearly $39 billion in trading revenue for the second quarter.
Stock traders across many of those firms are expected to pull in near record amounts of revenue, just short of the highs set during the first quarter. Goldman equities traders are on the cusp of setting another record in the second quarter, with that business on track to generate more than $5 billion of revenue.
Banks with exposure to Asian equity markets in particular, such as Morgan Stanley, will likely see a benefit from market swings in the period, Keefe, Bruyette & Woods analysts led by Chris McGratty said in a note to clients.
“Bank stocks have rallied strongly and outperformed since mid-May as worries about the war ebbed, spending growth remains strong and markets are up sharply,” JPMorgan analysts including Vivek Juneja said in a note to clients. Highlights of earnings will likely include “stronger-than-guided investment banking and trading revenues, and the outlook for these revenues should remain strong.”
Investment Banking
One thing was clear in the second quarter: Investment bankers across Wall Street got their swagger back. By the middle of June, Goldman’s bankers had already advised on more than $1 trillion of mergers and acquisitions for the year. That’s the fastest any bank has ever reached the milestone.
That same month, Goldman and top rivals including Morgan Stanley and Bank of America took SpaceX public in the largest-ever public listing. While Elon Musk’s company negotiated to pay razor-thin fees for the offering, it was still one of the biggest fee events ever on Wall Street.
Only days before the SpaceX deal, Goldman bankers were racing to pull together what was then one of the biggest equity offerings on record, helping Alphabet Inc. raise more than $80 billion to finance its overall artificial-intelligence spending and capitalize on the company’s unique and growing position as a supplier of AI chips.
