Morgan Stanley weakness in FX trading leads to poor Q3 results

Wall Street investment bank Morgan Stanley (NYSE:MS) reported Q3 results which disappointed investors, sending its shares diving about 6% in pre-market trading Monday.

The culprit at Morgan Stanley which most street analysts are pointing to is the company’s 17% drop in Trading Revenue during the quarter, with its clients staying away from the bond, currency and commodity markets. Overall Morgan Stanley saw a 42% drop in profits.

Morgan Stanley CEO James Gorman blamed ‘volatility in global markets in the third-quarter [which] led to a difficult environment…’.

Interestingly, this very same ‘tough’ market environment caused by volatility in the institutional trading sector and led to very good results at some retail forex brokers. We earlier reported that Plus500 saw a 44% YoY rise in Q3 revenues, as heightened volatility brought retail traders to their screens. Binary options exchange Nadex had a 70% jump in trading volumes in Q3 2015.

Morgan Stanley joins its arch rival investment bank Goldman Sachs Group Inc (NYSE:GS) as well as commercial banks Citigroup Inc (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) in reporting fairly poor results for the quarter on both the top and bottom line.

Morgan Stanley’s Q3 results can be seen here.

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