Jefferies Group posted a 33% drop in quarterly bond-trading revenue, signaling weakness in a business that’s been a strength for Wall Street in the past year. Investment banking jumped on gains in debt underwriting.
Bloomberg News reports that fixed-income revenue in the fiscal second quarter ended May 31 fell to $158.6 million, the New York-based company said Tuesday in a statement. The decline snapped a four-quarter streak of increases. Total trading declined 6.9% to $430.1 million.
“Lower volumes and lower volatility prevailed throughout much of the quarter,” CEO Richard Handler and Brian Friedman, chairman of the executive committee, said in the statement.
Investors closely watch Jefferies for clues about how bigger investment banks might fare when they report results for quarters that end a month later. The firm’s fixed-income decline was more severe than several Wall Street competitors projected for their results, which will be announced in July. JPMorgan Chase, Bank of America and Citigroup said trading would drop at least 10 percent, with fixed-income the main culprit.
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