Some of Wall Street’s biggest firms signaled optimism in October after posting their worst trading and investment-banking period since the financial crisis. Now, analysts say the fourth quarter may have been worse.
Fixed-income trading revenue at U.S. banks may fall 12 percent from the third quarter, minus accounting adjustments, while equities drop 10 percent and investment-bank revenue will probably be unchanged, David Trone, an analyst at JMP Securities, wrote in a Dec. 16 report.
Some analysts had expected a rebound after the third quarter was the worst for trading and investment banking since 2008, when the collapse of real estate markets contributed to a worldwide credit crunch. Now many are looking ahead to 2012 after investors stayed on the sidelines amid concern that the European debt crisis would lead to a global slowdown.
“We’re in a difficult environment,” Brad Hintz, an analyst at Sanford C. Bernstein & Co., said yesterday on Bloomberg Television’s “In The Loop” program. “I really don’t think anyone’s going to be focusing on the earnings of these firms. They’re really going to be focusing forward.” Hintz is a former Morgan Stanley treasurer.
Twelve analysts cut earnings estimates (GS) for Goldman Sachs Group Inc. in the past four weeks and 14 trimmed theirs for JPMorgan Chase & Co. (JPM), according to data compiled by Bloomberg. Goldman Sachs, which gets the majority of its revenue from trading, may post its lowest annual net income after preferred dividends since 1998 and the least revenue since 2005, Roger Freeman, a Barclays Capital analyst, said in a note titled “Another Year to Forget.”
http://www.bloomberg.com/news/2011-12-21/wall-street-trading-revenue-to-decline-as-year-to-forget-comes-to-an-end.html
Fixed-income trading revenue at U.S. banks may fall 12 percent from the third quarter, minus accounting adjustments, while equities drop 10 percent and investment-bank revenue will probably be unchanged, David Trone, an analyst at JMP Securities, wrote in a Dec. 16 report.
Some analysts had expected a rebound after the third quarter was the worst for trading and investment banking since 2008, when the collapse of real estate markets contributed to a worldwide credit crunch. Now many are looking ahead to 2012 after investors stayed on the sidelines amid concern that the European debt crisis would lead to a global slowdown.
“We’re in a difficult environment,” Brad Hintz, an analyst at Sanford C. Bernstein & Co., said yesterday on Bloomberg Television’s “In The Loop” program. “I really don’t think anyone’s going to be focusing on the earnings of these firms. They’re really going to be focusing forward.” Hintz is a former Morgan Stanley treasurer.
Twelve analysts cut earnings estimates (GS) for Goldman Sachs Group Inc. in the past four weeks and 14 trimmed theirs for JPMorgan Chase & Co. (JPM), according to data compiled by Bloomberg. Goldman Sachs, which gets the majority of its revenue from trading, may post its lowest annual net income after preferred dividends since 1998 and the least revenue since 2005, Roger Freeman, a Barclays Capital analyst, said in a note titled “Another Year to Forget.”
http://www.bloomberg.com/news/2011-12-21/wall-street-trading-revenue-to-decline-as-year-to-forget-comes-to-an-end.html
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