Homepage / Investment / Bond, stock trading revenues drop on sleepy Wall Street
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Investment

Bond, stock trading revenues drop on sleepy Wall Street

Markets are a little too calm, at least as far as Wall Street is concerned.

JPMorgan Chase and Citigroup reported lower trading results for the second quarter and the signs aren’t pointing to a rebound in the fall.

Bankers had already warned in recent weeks that revenue from bond and stock trading would be lower than the strong first quarter and compare less favorably to the second quarter last year, when markets were jolted by the United Kingdom’s vote to leave the European Union. There wasn’t any such excitement this year to stoke the volatility needed to boost trading.

“This quarter, conversely, can be characterized by a lack of idiosyncratic events,” said Marianne Lake, JPMorgan’s chief financial officer, on a conference call with analysts Friday morning, according to a transcript by FactSet. The bank’s revenue from fixed-income trading fell 19 percent from last year, and 24 percent from the first quarter. For the year through June, fixed-income trading revenue is down 2 percent.

Stock trading wasn’t robust, either. JPMorgan said revenue in that business was down 1 percent from last year’s second quarter and this year’s first quarter. It’s up about 1 percent for the year. At Citigroup, equity trading fell 11 percent, reflecting “episodic activity in the prior year period, as well as low volatility in the current quarter.”

The expectations aren’t high for other big banks due to report later this month, including Goldman Sachs, Morgan Stanley and Bank of America, whose CEO said last month that trading revenue was likely to be lower than last year.

Trading once propelled Wall Street’s big banks to big profits, but the business has taken a hit from increased regulation and market forces driving profit lower.

Low volatility is a culprit, too. The CBOE Volatility Index, otherwise known as Wall Street’s “fear gauge,” is near decade-old lows and doesn’t seem ready to reverse course. The Federal Reserve is sticking to its plan to gradually raise rates, and uncertainty about how much of President Donald Trump’s agenda will get done hasn’t stopped markets from rallying.

“While it wouldn’t be herculean to suggest volatility rises a bit from here, barring anything that comes out of left field, we don’t envision a strong advance,” said Bryan Reilly, a senior investment analyst at CIBC Atlantic Trust.

A broad shift by investors away from actively managed funds to passive, index strategies is exacerbating the problem, Reilly says, by reducing the amount of portfolio turnover that would give bank trading desks something to do.

Last year’s strong third quarter isn’t going to make comparisons to this year easy, either.

For JPMorgan, the third quarter of 2016 was a blowout, with about $1 billion more in trading revenue than the average of the previous five years. “I’d like to remind you third quarter of 2016 market revenue was also a record since 2010,” Lake told analysts on Friday. “So while that isn’t guidance, it is context as this quarter has felt quite more like prior years.”

Glenn Schorr, an analyst at Evercore ISI, said he has factored the comparison with last year’s big numbers into his estimates for the rest of the year but notes “trading has a tendency to turn on a dime.”

The environment is complacent, he said in telephone interview. “If everyone feels the market is not too hot, not too cold” and there’s not a lot of volatility “that makes trading not great.”

Wall Street banks react to weakness in various business lines by adjusting the amount of money they set aside for compensation. At JPMorgan’s investment bank, compensation expense in the second quarter was down 12 percent from the first quarter.

But what does it matter, anyway? JPMorgan’s CEO Jamie Dimon expressed frustration that the media and the public focus too much on the short-term. On a conference call with reporters Friday morning he reacted to a question about the bond market. “Who cares about fixed income trading in the last two weeks of June, honestly?”

Source: Investment Cnbc
Bond, stock trading revenues drop on sleepy Wall Street

Comments are closed.