US banks' equities traders surpass bond desk rivals

by@business

Summary

Equities traders at five of the largest US banks have outperformed their bond desk counterparts, marking a notable shift in trading trends on Wall Street. This reversal is largely attributed to increased prime brokerage activity catering to hedge funds and large equity investors, which has bolstered the equities divisions. In contrast, rising interest rates have exerted pressure on bond-trading revenues. Recent estimates indicate that Goldman Sachs is likely to lead in stock-trading revenue, followed by Morgan Stanley, JPMorgan, and Bank of America among the top performers.

Analysis

US banks: The five largest US investment banks referenced here are JPMorgan Chase, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America, which operate major equities and fixed-income trading businesses. Their equities divisions are outperforming bond, currency and commodities desks, reflecting stronger stock-market and hedge-fund-related activity while higher interest rates weigh on fixed-income trading. Bank ranking: Recent analyst estimates place Goldman Sachs ahead of Morgan Stanley and JPMorgan in expected stock-trading revenue, with Bank of America also among the leading contributors. Trading trend: Equities divisions at the five banks are on track to generate more revenue than their fixed-income, currencies and commodities units, marking a rare reversal on Wall Street. Market drivers: Prime brokerage activity serving hedge funds and other large equity investors has supported equities desks, while higher rates have pressured bond-trading activity.

Categories

macro

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