What is bad for some is not bad for others. Or at least that’s how we can point out with respect to the statements of the director of Morgan StanleyTed Pickwho said that Higher rates for longer are good for business according to David Hollerith at Yahoo Finance.
“I think it’s really good for our business, because we’ve spent a lot of time refining the strategy,” Pick said at a financial services conference hosted by Morgan Stanley Research.
Central bank policymakers have been warning investors to expect rates to remain elevated following a series of difficult inflation readings in the first quarter and surprisingly strong economic data.
This Wednesday the Federal Reserve is expected to keep rates at 23-year highs and reduce the number of cuts expected for the remainder of 2024.
The current trajectory of rates presents an enigma for many banks that depend largely on the spread between what they pay for deposits and what they earn on their loans and the banks that are highly exposed to certain types of troubled borrowers.
But Pick said the Strategy developed by his predecessor, James Gorman, protects Morgan Stanley from the risks of a high rate environment.
“We know that We do not provide unsecured credit in emerging markets, credit cards through a loan cycle“added Pick. “These are big businesses, but we know what we’re doing and that’s why it’s so important the discipline that James crystallized“.
Pick became CEO earlier this year after Gorman announced his decision to retiremaking it clear that Gorman’s plan would remain in effect.
“While there has been a change in leadership, there is no change in strategy,” he wrote in his 2024 letter to shareholders.
Since then, Morgan Stanley shares are up just 3%, lagging its big Wall Street rivals. His shares were virtually stable on Monday.
The Last-quarter earnings rose more than analysts expected from the same period a year earlier thanks to increases in investment banking, trading and asset management fees.
The Investment banking commissions increased 19% compared to the previous yeardriven largely by more equity and fixed income subscription transactions for work on IPOs and corporate bond issues.
Pick on Monday pointed out a better integration of investment banking, trading, wealth and asset management of Morgan Stanley as the key place for the future growth of the company.
He highlighted the Morgan Stanley stock plan administration business for corporate clients as a way to interact with other divisions of the company, such as investment banking.
Pick also analyzed how the Artificial intelligence would boost the income of Morgan Stanley’s investment bank.
“There is enormous activity,” Pick indicated, pointing to customers in the manufacturing sectors. utilities, telecommunications, real estate and technology that will face increased demand as the trend takes off.
Morgan Stanley has a set of artificial intelligence products that it offers to its clients within its asset and wealth management division known as AI at Morgan Stanley (AIMS). According to Pick, some of the company’s products can already save your financial advisors 10 to 15 hours per week.
Morgan Stanley and other big banks are waiting this year for a final decision on new capital requirements that were initially proposed almost a year ago.
Executives now anticipate that Final requirements will be less onerous than the initial proposal. That may mean that banks will have more freedom to return to shareholders some of the excess capital they currently hold.
Without saying what the company plans to do, Pick admitted that he They loved dividends as a way to reward shareholders.
“I really care about the dividend as a shareholder… I think it’s emblematic of our strength, our stability… so that’s sacrosanct,” Pick noted, adding that the investments to grow the company along with share buybacks they were also possible uses of excess capital.
Morgan Stanley It closed Monday’s session lower at $22.61. The 70-period moving average remains below the latest candles, RSI is down at 49 points and the MACD lines are above the zero level.
The price is below medium and long-term supports. Meanwhile, Ei indicators are mixed.
