Third Quarter 2025 Earnings Results - Firm compensation expenses excluding DCP, which represents a non-GAAP financial measure, were: 3Q25: $7,142 million, 2Q25: $6,819 million, 3Q24: $6,457 million, 3Q25 YTD: $21,484 million, 3Q24 YTD: $19,309 million. - The End Notes are an integral part of this presentation. See pages 12 - 17 for Definition of U.S. GAAP to Non-GAAP Measures, Definitions of Performance Metrics and Terms, Supplemental Quantitative Details and Calculations, and Legal Notice. Consolidated Fin ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Core Insights - Morgan Stanley's profit exceeded market expectations in Q3, driven by a significant increase in dealmaking and record revenue [1][2] - The investment banking pipeline is at "all-time highs," with potential for breaking 2021 deal volume records next year [1][3] Financial Performance - The bank's profit surged to $4.6 billion, or $2.80 per share, surpassing expectations of $2.10 per share [7] - Total quarterly revenue reached a record $18.2 billion, exceeding expectations of $16.7 billion [7] - Investment banking revenue increased by 44% to $2.11 billion compared to the previous year [8] Wealth Management - Wealth management assets under management reached $8.9 trillion, approaching the goal of $10 trillion, with a pre-tax margin of 30.3% [2][6] - A strong wealth management business is expected to support ongoing investment banking activities [6] Market Conditions - Global mergers and acquisitions activity surpassed $3 trillion this year, fueled by a resilient U.S. economy and favorable market conditions [3] - The CFO noted improved GDP expectations and lower debt costs for companies, alongside a resumption of the Federal Reserve's rate-cutting cycle [4] Stock Performance - Morgan Stanley shares rose 4.1% in premarket trading and have gained 23.6% year-to-date [5]

Core Insights - Morgan Stanley reported a significant increase in third-quarter equity trading revenue, rising by 35% to $4.116 billion, surpassing Goldman Sachs' $3.74 billion for the same period [1] Financial Performance - Third-quarter equity trading revenue for Morgan Stanley reached $4.116 billion, marking a 35% increase compared to previous periods [1] - Goldman Sachs reported equity trading revenue of $3.74 billion in the same quarter, indicating Morgan Stanley's stronger performance in this segment [1]

Group 1: Market Overview - U.S. stock index futures rose before the market opened, with Dow Jones futures up 0.56%, S&P 500 futures up 0.79%, and Nasdaq 100 futures up 1.05% [1] - Chip stocks showed strength, with Nvidia, Broadcom, and AMD rising over 2%, while ASML and TSMC increased by more than 4% [1] - Major tech stocks like Apple, Tesla, Oracle, Palantir, and Intel rose over 1%, with Alibaba increasing by more than 3% [1] Group 2: Company Earnings - Bank of America reported third-quarter earnings and revenue that exceeded market expectations, driven by strong investment banking performance, leading to a pre-market stock increase of about 4% [1] - Morgan Stanley also reported better-than-expected earnings, with stock rising over 4% [1] - Morgan Stanley's third-quarter net revenue was $18.22 billion, surpassing the forecast of $16.64 billion, with wealth management net revenue at $8.23 billion, exceeding the expected $7.78 billion [5] Group 3: Technology Developments - ASML is expected to achieve sales growth driven by strong demand for extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography equipment, with a revenue target of €44-60 billion by 2030 [4] - Nscale plans to build a large AI data center for Microsoft in Texas, with a power capacity of up to 240 MW, set to be operational by Q3 2026 [6][7] - Ericsson signed a $3 billion cooperation agreement with the Canadian Export Development Corporation to enhance investment in Canadian R&D and accelerate next-generation technology development, including 5G and AI [9] Group 4: Strategic Investments - Coinbase announced an investment in the leading cryptocurrency exchange CoinDCX in India and the Middle East, following previous investments through Coinbase Ventures [8] - HSBC raised Nvidia's target price from $200 to $320, indicating a potential market capitalization increase to $7.78 trillion [10]

Core Insights - Morgan Stanley's stock trading business significantly outperformed expectations in Q3, driven by market volatility and active trading due to President Trump's policies [1][4] - The bank reported Q3 revenue of $18.22 billion, a year-over-year increase of 18.5%, with earnings per share of $2.80, surpassing market expectations [1][5] - The stock trading revenue surged 35% to $4.12 billion, exceeding analysts' growth expectations of 6.6% and outperforming Goldman Sachs' $3.74 billion in the same segment [1][5] Revenue and Earnings - The investment banking revenue increased by 44%, contributing to the overall strong performance [1] - Wealth management generated $8.2 billion in revenue, exceeding expectations, and attracted $81 billion in new assets with a 30% pre-tax profit margin [1][5] - Total trading revenue reached $6.29 billion, significantly above the analyst forecast of $5.5 billion, with fixed income revenue growing by 8% [5] Cost and Capital Management - Total expenses for the quarter included $7.44 billion in compensation, raising non-interest expenses to $12.2 billion, a 10% year-over-year increase, higher than the expected 6.8% [5] - Morgan Stanley reported zero loan loss provisions for Q3, a decrease from $79 million in the same quarter last year and $196 million in Q2, attributed to improved macroeconomic conditions [6]

Group 1: Bank Earnings and Market Reactions - Bank of America reported better-than-expected earnings with an incredibly low level of charge-offs, while Wells Fargo also set aside less money for losses, raising questions about potential bad corporate loans in the sector [1] - Following strong quarterly results for Bank of America and Morgan Stanley, there is a shift in focus from net interest income to earnings growth, which could lead to higher price-to-earnings ratios for banks, with both stocks rising over 3% [2][3] Group 2: Company-Specific Developments - Salesforce's CEO indicated that Agentforce is now integral to the company, but concerns remain about its impact on earnings, despite notable clients like Williams-Sonoma and Dell using the tool [3] - Abbott Labs reported a solid quarter but narrowed its earnings per share guidance due to tariffs, resulting in a stock decline of over 3% [4] - Apollo Global has made another bid for Papa John's, suggesting that restaurant valuations are low, while Texas Roadhouse faces margin pressure from rising cattle prices [5] Group 3: Technology and Semiconductor Sector - ASML reported a strong quarter, highlighting its unique semiconductor equipment that Chinese companies cannot replicate, although it anticipates a decline in sales to China [6] Group 4: Investment Activity and Ratings - An investor group including BlackRock and Nvidia plans to acquire Aligned Data Centers for $40 billion, indicating ongoing activity in the data center sector [8] - Morgan Stanley raised its price target for Johnson & Johnson from $178 to $190, following a strong quarter and positive outlook, including plans to spin off its orthopedics business [9] - BTIG initiated coverage of Nike with a buy rating and a $100 price target, recognizing progress in its turnaround strategy [10]

Market Overview - US stock index futures are all up, with Dow futures rising by 0.56%, S&P 500 futures up by 0.76%, and Nasdaq futures increasing by 0.99% [1] - European indices show mixed results, with Germany's DAX up by 0.02%, UK's FTSE 100 down by 0.38%, France's CAC40 up by 2.30%, and the Euro Stoxx 50 up by 1.28% [2][3] - WTI crude oil prices increased by 0.73% to $59.13 per barrel, while Brent crude rose by 0.51% to $62.71 per barrel [3][4] Federal Reserve Insights - Federal Reserve Chairman Jerome Powell hinted at a potential 25 basis point rate cut later this month, despite the government shutdown affecting economic assessments [5] - Powell emphasized ongoing risks in the labor market, noting a slowdown in hiring that could worsen [5] Commodity Market Reactions - Following Powell's dovish remarks, copper prices rebounded, with industry insiders predicting prices could reach $12,000 per ton [5] Economic Data Concerns - The ongoing government shutdown raises concerns about the accuracy of the upcoming October Consumer Price Index (CPI) data, as the Labor Statistics Bureau has been unable to collect new price information since the shutdown began [6] - Morgan Stanley's David Kelly warned that the US is "slowly heading towards bankruptcy," with national debt exceeding $37.8 trillion and interest payments surpassing $1.2 trillion [6] Company Earnings Reports - Morgan Stanley reported Q3 net revenue of $18.22 billion, an 18% year-over-year increase, exceeding expectations [7] - Abbott's Q3 revenue was approximately $11.37 billion, slightly below analyst expectations due to weak performance in its diagnostics and nutrition segments [7] - Dollar Tree projected a 12-15% annual growth in earnings per share over the next three years, with a near 20% growth expected in FY2026 [8] - Bank of America reported Q3 earnings exceeding expectations, driven by a resurgence in merger and acquisition activity, with net interest income also surpassing forecasts [9] - ASML's Q3 orders exceeded expectations, driven by strong demand in the AI infrastructure sector, with orders reaching €5.4 billion (approximately $6.3 billion) [9] - Apple's Q3 shipments in China grew by 0.6% year-over-year, reaching 10.8 million units, despite a declining overall smartphone market [10] - Eli Lilly's oral weight-loss drug orforglipron showed promising results in clinical trials, with plans to apply for market approval next year [11]

Core Insights - Morgan Stanley reported Q3 net revenues of $18.22 billion, an 18% year-over-year increase, exceeding the forecast of $16.64 billion [3][4] - Earnings per share for Q3 reached $2.80, with a return on equity of 18%, surpassing the expected 13.4% [3][4] Business Segment Performance - Investment Banking revenues grew by 44% year-over-year to $2.11 billion, driven by strong advisory and underwriting activities [6][5] - Wealth Management net revenues were $8.23 billion, exceeding the forecast of $7.78 billion, with a 12% increase in net interest income [8][11] - Institutional Securities segment reported net revenues of $8.52 billion, a 25% increase year-over-year, primarily due to strong performance in equity and investment banking [6][5] Cost Efficiency - The expense efficiency ratio improved to 67%, down from 72% in the previous year, indicating better cost management [9] - Total compensation expenses were $7.44 billion, reflecting a 10% increase, aligning with revenue growth [9] Market Dynamics - The strong performance in investment banking was attributed to a rebound in IPOs and convertible bond issuances, indicating a recovery in market risk appetite [6][10] - The fixed income business showed modest growth of 8% year-over-year, with revenues of $2.17 billion, primarily driven by credit and commodity trading [7] Strategic Outlook - The integrated investment banking model has proven effective, amplifying gains in favorable market conditions while providing a buffer during downturns [10] - Regulatory approval for a reduction in capital buffer from 5.1% to 4.3% allows Morgan Stanley to return more capital to shareholders through buybacks and dividends [10]

Morgan Stanley reported its Q3 earnings on Wednesday and posted a solid quarter, surpassing Wall Street estimates with earnings per share of $2.80 and revenue of $18.22 billion. During the third quart... ...