Goldman and Morgan Stanley and 'a full-scale rout'

Pair Of Scissors

Goldman Sachs and Morgan Stanley had their earnings estimates lowered by Brad Hintz, a Sanford C. Bernstein analyst, amid a decline in trading he called 'a full-scale rout'.

Bloomberg reports that Hintz cut Goldman Sachs’s third-quarter per-share earnings estimate by 15% to $2.62 and the full-year estimate by 8.6% to $15.59 per share, according to a note last week about the two firms.

Morgan Stanley’s per-share third-quarter estimate was decreased 20% to 41 cents, and the 2013 figure dropped 4.8% to $1.98.

'While the third quarter is typically seasonally soft, Q3 2013 appears to be turning into a full-scale rout in trading as weak activity and limited risk-taking constrained performance', Hintz wrote. Fixed-income trading volume could decline 20% to 25% on average in the three months ended 30th September, he wrote.

Analysts have been reducing their third-quarter earnings estimates for the biggest U.S. banks. JPMorgan said trading revenue will probably fall this period and Jefferies said revenue from fixed-income trading plunged 88% in its fiscal third quarter, which ended 31st August, compared with a year earlier.

To access the complete Bloomberg article hit the link below

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