Morgan Stanley 3Q15 Earnings Call Notes

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General retail investor step back from market

“Our wealth management franchise was impacted by a lack of new issue product and a general retail investor step back from markets, given volatility. While we do not expect this to be a long-term trend, we remain focused on expenses in the meantime.

Fixed income trading underperformed

“fixed income underperformed in the quarter, largely due to a very challenging market environment, in which we were significantly impacted given our business mix, particularly our focus on credit and rates.”

Underwriting business slow

“Turning to underwriting. Our underwriting business slowed significantly, as the typical pick up in September deal activity was delayed due to uncertain markets. We had a significant number of deals delayed in September.”

Very challenging environment in fixed income and commodities

“In fixed income and commodities, we saw a very challenging market environment. We were particularly impacted by spread widening in credit and mortgages and lower levels of client activity and rates throughout the quarter”

This was a very different market than we saw in the 1st Q

“this was a very different market than we saw in the first quarter. I think the volatility, the lack of conviction, the policy uncertainty, coupled with really no macro themes or events that investors embrace. So it was a very difficult market. It was not particularly conducive for our relative business mix, as you mentioned.”

July was dealing with Greece, September was will she or wont she

“July was, we’re still dealing with will Greece, won’t Greece. September was will she, won’t she, which was Yellen, and in the middle was China, which went up and down in a six month period at an extraordinary rate, with artificial intervention by the CSRC and other things that really threw the markets sideways.”