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Breakingviews: Wall Street's earnings struggle

Friday, October 17, 2014 - 03:26

Goldman Sachs and Morgan Stanley both beat Q3 estimates. But as Rob Cox and Antony Currie explain, they're a long way from providing shareholders with returns worth getting excited about.

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So we have Morgan Stanley's results came out today yesterday we had Goldman Sachs. Actually carry what does it tell us about Wall Street these two results body tells us they're trying as much as they can sit -- that shell was a little bit more -- that. Goldman Sachs yesterday for example. The things by a wide margin but largely because snow was expected to company compensation -- to revenue nine. Quite as much as they did they -- and a 35% of the top line but they can always -- that in the -- absolutely right what they knew we Tuesday. They keep it behind that's obviously 43% this year and then. In the full putting normally reject it but at the close to three years based on doing a bit more on. If you strip that out that the -- it would've been. Just a little bit below the cost of capital site. Not -- thing to do is just one night seem to have to do you or just to make him so what's so what is it if you adjusted fourth just under 10% so -- under 10% return on equity yet. Which and that the company's trading at about book value its -- to a just a bit about right so basically it's not that's not very exciting. Cut it to make your -- capital and that's that's the problem -- -- -- look across the banking earnings this week in Morgan Stanley is a great example -- if you look at the top one Manning's attempt sentence on equity. Extra pass not to -- an eight cent which means that just getting place right at socket that James Coleman is set to reach by and next which is -- to spend. Marriage is not great -- is basically saying it will make sure you have enough money in efforts and shareholders to justify. What having not left in the bank coming come -- it's well it's I guess it justifies trading at book value. Yes that's which it's which is as big improvement since 2007. Restaurant is take is a long time to get that right I think. What you can Waco -- Wendell thanks treating it just about the value it does for a very often for most things they showed that. Finally believing there's enough consistency of the innings to keep the most get and keep them at that level. But the next stage for all these banks is what you -- she can't get a great to have revenue threat in the sixteen country we get revenue -- -- -- -- penetrating. As much as he used to because you'll do much -- an because of all the happily that I hope to run on other ways Goldman doesn't have as many. What he's saying is Morgan Stanley which categories and has the equities business -- dwelling on the finals as well -- I mean so by the -- private wealth management Wright which which Adam Goldman doesn't have in the same way Melissa is making a big play getting more innings out of it's break in the regular bank and gas pump like unit. Which could be signs popping more consistent earnings as long as that in screw around with lending and how much they they practically shipment to. Was still looking at yes to these three years of biffle what -- sends a gritty stuff posting it to be good attendance and if interest rates Taylor Jordan universal -- by JP you'll. We'll sitting there you go even longer to wait so basically people on Wall Street are are looking at sort of votes and no growth. In both their top lines and well there's a lot of guts to -- opposite Jason gross right but it's on my system if they don't -- yes they had a nice big gain. From selling mobilize the the people -- -- it helps us. They've had a good game you can't really look at that's -- threats that -- might get some very scared that we you know getting stellar -- -- not going through. Enough to the bottom line to make these sons of really really really attack okay thanks Anthony appreciate that. And will be back tomorrow breaking -- next week.

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Breakingviews: Wall Street's earnings struggle

Friday, October 17, 2014 - 03:26