We have a good start to the day, with better-than-expected reports on the earnings as well as jobs fronts. We also had news from China, showing strong fourth-quarter GDP growth rate.
On the earnings front, Morgan Stanley outshone its Wall Street rival by coming out with better than expected results. Morgan Stanley convincingly came out ahead of consensus EPS and revenue expectations. Goldman Sachs’ results the day before were mixed, beating on earnings, but missing on revenue.
While trading volumes were soft, as we had seen with Goldman, but Morgan Stanley did quite good on the investment banking side. In fact, Morgan Stanley had more investment banking revenue in the quarter than Goldman Sachs.
Other banks, like Northern Trust, Wells Fargo, and State Street, had mixed results as well. This underscores the point that while the credit environment is improving, it may take a while for ‘normal’ profitability to return.
We have a number of important items on the economic calendar today, with weekly Jobless Claims numbers coming before the open. We also have Existing Home Sales and Leading Indicators coming out today.
Jobless Claims came in better than expected, reversing the negative trend that we had seen in the last two weeks. It appears that the weak reports the last two weeks were most likely reflective of seasonality issues.
Sheraz Mian
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