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A number of major banks reported Friday morning, including JPMorgan Chase (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC). So what does the result reveal about Goldman Sachs and Morgan Stanley’s earnings, which the companies will report on Tuesday, January 16th?
Ken Leon, director of equity research at CFRA, joins Yahoo Finance Live to take a look at the report and what to expect from other banks scheduled to report in the coming days. Leung said there is a “huge backlog” in investment banking and expects Goldman Sachs (GS) and Morgan Stanley (MS) to benefit, while asset and wealth management businesses I expect it to “shine.”
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by Ike Ntekim
video transcript
– Okay, so what do you think of today’s results, considering the numbers that came out this morning and looking ahead to what we’re going to get next week with Morgan Stanley and Goldman Sachs, what does that mean for us? Will it bring perspective? Will we know the results next Tuesday and Wednesday?
Ken Leung: They’ll actually move more forward, but the first quarter, the first half, won’t be V-shaped. In investment banking, there are significant balances, particularly from private equity firms that want to monetize their investments in funds, either through M&A or underwriting. So Goldman and Morgan Stanley stand to benefit.
The durable business of wealth and wealth management will really shine next week. And I think the story of the investment banking industry is that it reached the trough of the economic cycle last year. We will see improvement this year. Unless there are other unexpected events or dark swans, it will be a pretty good picture. The concern, of course, is increased regulation, and increased regulation of capital requirements, which is of primary concern to investors.
– Ken Leon, Research Director, CFRA Equity Research. Ken, thank you so much for taking the time this morning to explain more about bank earnings.
Ken Leung: thank you.
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