Goldman Sachs vs. Morgan Stanley: Which Alpha Traders are Winning?
Just as Goldman Sachs (NYSE:GS) crystallized its quickly fading status on Wall St. with this week’s disappointing Q2 Earnings, rival Morgan Stanley (NYSE:MS), which in the past has lived under the shadow of the more prestigious Goldman, came out with the best quarter among all the street’s biggest banks in terms of trading revenue. While Goldman, Bank of America (NYSE:BAC), Citigroup (NYSE:C), and JP Morgan (NYSE:JPM) all saw their trading incomes dip into the red this quarter due to low volume activity, Stanley was the only bank to report growth in that dimension in the second fiscal quarter.
Does this mean that Morgan Stanley is on track to leapfrog Goldman (NYSE:GS) on the Wall Street pecking order? Who knows, but at least in terms of CEO speak, one bank is making excuses while the other is suggesting a much brighter outlook. DealBreaker reports Goldman CEO Blankfein saying, “During the second quarter, the operating environment was more difficult given global macro- economic concerns. In addition, certain of our businesses had disappointing results as we reduced our market risk in response to attempting to manage fluctuations in prices and market liquidity.”
Compare that with Morgan (NYSE:MS) CEO Gorman, “While global markets remained challenging this quarter, the Firm delivered higher year-over-year revenues across our three major business segments. Within Institutional Securities, our premier investment-banking franchise ranked #1 in global completed M&A during the quarter and had the highest second-quarter revenues since 2007. With this additional capital cushion and the clear momentum across our main businesses, we are well positioned to help our clients navigate the constantly changing markets and create additional value for our shareholders.”