Morgan Stanley Joins Wall Street Rivals’ Stock-Trading Boon

Summary

Bloomberg Intelligence Podcast Summary

Episode: Morgan Stanley Joins Wall Street Rivals’ Stock-Trading Boon
Date: July 15, 2026
Hosts: Paul Sweeney & Scarlet Fu
Guest: Neil Sipes, Bloomberg Intelligence U.S. Financials Analyst
Main Theme:
A deep dive into the latest Wall Street big bank earnings, with a focus on Morgan Stanley and BlackRock, and the surge in stock-trading revenue across the industry.

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Episode Overview

This episode zeroes in on the impressive Q2 earnings reported by the largest U.S. banks, highlighting a stunning surge in stock-trading revenues. The hosts dissect Morgan Stanley’s standout results and their powerhouse wealth management business. Parallelly, BlackRock’s achievements and shifts in business strategy are explored. Investment banking pipelines, equity trading environments, and evolving trends in asset management also feature prominently.

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Key Discussion Points & Insights

1. Wall Street’s Blowout Trading Revenues (01:38–03:22)

• Unprecedented Trading Gains:

  • All major banks reported eye-popping beats in trading revenues, with results “in the billions of dollars in beats, not numbers we’re used to seeing.”
    “A lot of people have been using eye-popping numbers, right? I mean beats that are in the billions of dollars in beats, not numbers we’re used to seeing.” — Neil Sipes (02:02)
  • The standout performance was largely driven by equity markets, including a rapid V-shaped recovery after geopolitical tensions in the Middle East subsided.

• Capital Market Drivers:

  • SpaceX’s IPO and similar high-profile deals generated considerable market activity.
  • Themes like Asia-focused investments and the expanding role of artificial intelligence further fueled the equities boom.

• Transience of Trading Boons:

  • While trading revenue surges are impressive, they are often fickle and subject to macro sentiment and market swings.

2. Resurgence of Investment Banking Pipelines (03:22–04:18)

• Revived Deal Pipelines:
  • Pipelines for investment banking are robust, with Goldman Sachs posting its “best fees since 2021” and claiming pipelines “higher than they have been in the past five years.”
  • The future looks promising, but Sipes cautions that all can change rapidly if sentiment shifts:
    “You snap your fingers and markets go against you, all that can sort of ice over for at least a couple of weeks, if not longer.” — Neil Sipes (03:56)

3. Morgan Stanley’s Dominant Wealth Management Business (04:18–05:29)

• Centerpiece of Earnings:

  • Wealth management is now “over half of earnings” for Morgan Stanley and acts as a steadying force to offset the volatility of capital markets.
  • The business is “firing”—reaching 30% margins and 8% organic growth.

• IPO-Driven Asset Flows:

  • Almost half of the $150B in net new assets for Morgan Stanley’s wealth management in Q2 “was derived from IPOs in the quarter that Morgan Stanley was involved in.” “Almost half of the $150 billion of flows was derived from IPOs in the quarter that Morgan Stanley was involved in. So you think about that flywheel. Yeah, I mean that’s Morgan Stanley in a nutshell.” — Neil Sipes (05:09)

• Unprecedented Scale:

  • Hosts and analysts express astonishment at the sheer scale:
    “$150 billion in net new assets in its wealth management business in a three-month period. That’s kind of nuts.” — Bloomberg Analyst (05:23)

4. BlackRock’s Shifting Growth Engine (05:29–06:45)

• Massive Scale with Subtle Shifts:

  • BlackRock now manages a staggering $15.3 trillion in assets.
    “The BlackRock numbers are just dumb. The assets under management are what now?” — Host (05:38)
    “15 trillion.” — Neil Sipes (05:44)

• Growing Beyond Passive:

  • While passive investments (iShares ETFs) remain a powerhouse, recent growth is coming from higher-fee products—active ETFs and private market offerings.

  • BlackRock’s latest alternative investments are performing well, ensuring growth even at this astronomical scale.

    “Impressively, the growth at BlackRock has started to shift a little bit more and be more consistent in those non ultra low beta type funds and into things that are more lucrative, which is obviously positive to the business.” — Neil Sipes (06:00)

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Notable Quotes & Memorable Moments

• “A lot of people have been using eye-popping numbers, right? I mean beats that are in the billions of dollars in beats, not numbers we’re used to seeing.” — Neil Sipes (02:02)
• “The pipeline is actually higher than it has been in the past five years.” — Neil Sipes on Goldman Sachs (03:01)
• “You snap your fingers and markets go against you, all that can sort of ice over for at least a couple of weeks, if not longer.” — Neil Sipes (03:56)
• “Almost half of the $150 billion of flows was derived from IPOs in the quarter that Morgan Stanley was involved in. So you think about that flywheel. Yeah, I mean that’s Morgan Stanley in a nutshell.” — Neil Sipes (05:09)
• “$150 billion in net new assets in its wealth management business in a three-month period. That’s kind of nuts.” — Bloomberg Analyst (05:23)
• “The BlackRock numbers are just dumb. The assets under management are what now?” — Host (05:38)
• “Impressively, the growth at BlackRock has started to shift a little bit more and be more consistent in those non ultra low beta type funds and into things that are more lucrative, which is obviously positive to the business.” — Neil Sipes (06:00)

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Timestamps for Key Segments

• 01:38 – Big bank earnings overview; Morgan Stanley reporting
• 02:02 – Trading revenue “eye-popping” results and drivers
• 03:22 – The reliability and risks of investment banking pipelines
• 04:18 – Morgan Stanley's wealth management business analysis
• 05:09 – Impact of IPOs on wealth management asset inflows
• 05:38 – BlackRock’s assets under management and business evolution

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Tone & Language:
The conversation is analytical yet accessible, marked by genuine surprise at the scale of numbers and thoughtful caution about the sustainability of current market conditions.

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Summary Takeaway:
The episode highlights a record-setting quarter for Wall Street banks spearheaded by trading revenues and robust investment banking pipelines. Morgan Stanley stands out with a wealth management business turbocharged by IPO-driven flows, while BlackRock continues its global dominance with a subtle but significant shift toward higher-margin products, confirming strong prospects for large-scale asset managers in a dynamic market.

Transcript

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[Bloomberg Financial Analyst]

It is all about the big bank earnings. Yesterday we got a bonanza, five of them. Today we get the last of the big six banks and that is Morgan Stanley. Blackrock also reported as well. So let's bring in Neil Sipes. He is Bloomberg Intelligence U.S. financials analyst. Neil, the takeaway from the big bank's results yesterday was that trading revenue is gone, has gone gangbusters. And I think we got more proof of that today from Morgan Stanley.

[Neil Sipes]

Yeah, we sure did. And I think you've seen it across all the names that have reported so far. Pretty. I think a lot of people have been using eye popping numbers, right? I mean beats that are in the billions of dollars in beats, not numbers were used to seeing, we'll put it that way. And I think, you know, again the trading business, I think where we stand today, we, we've seen really strong equity markets, particularly in the second quarter where you had sort of a V shaped recovery really at the beginning. Around the Middle east tensions Sort of easing off of a cliff. And then you had, of course, SpaceX IPO. There's rumors of more coming either in the second half, maybe they get pushed into 2027. So there's, there's tailwinds there that have been driving this activity. There's themes like Asia, there's themes like AI. All of this is sort of fueling particularly equities trading. Again, when you think about the trading business, it's kind of fickle. Right. So the repetitiveness of something like the second quarter that we saw, I think that's what people are asking is, you know, is there more to come on the investment banking side? I think the answer is yes there. Right. Because we see really strong pipelines. We see Goldman posting the best fees since 2021 and saying the pipeline is actually higher than it has been in the past five years, which by the way was 2021. So it feels like second half even better. In that business, how much can you

[Bloomberg Financial Analyst]

count on the pipelines to deliver? I mean, you know, it's stuff that's in progress but has not been finalized or completed. So is that basically as good as it gets?

[Neil Sipes]

Yeah, and to be fair, the pipelines are, there's always optimism in the pipelines, even when things are not that great. I think so I think that's, that's where we stand is you have to have the inputs to execute on that pipeline and the biggest inputs are really the markets. Broader sentiment makes sense, macro conditions, all of that sort of feeds into, okay, are these deals actually going to come to market? Are, you know, capital issuers and capital, you know, providers all willing to meet at the same time and you know, the conditions have generally been there, you know, aside from a couple brief moments in the past couple of years. And the expectation is for more of that to come. But, you know, you snap your fingers and markets go against you. All that can sort of ice over for at least a couple of weeks, if not longer.

[Host]

What's. When I think of Morgan Stanley and I think a lot of investors, they want to get a sense of the private wealth business and because they, they're such, it's such a big part of their business and they're so good at it. What are they saying about that, that business?

[Neil Sipes]

Yeah, so it's, you know, it's over half of earnings now for Morgan Stanley. So it is really the, the driver of the franchise. Again. The headlines are generated by capital markets because it can swing so much the, through the cycle. Ballast is wealth management. And I think, you know, that Business again, market dependent. It's firing. Right. We got margins at 30%, which is the target. Organic growth at 8%. I think an interesting component here in the second quarter was the sort of windfall of flows coming from the IPOs that we saw in the second quarter. So you think, you think about all the wealth that's tied up, you know, within employees and early investors in something like Space X. Almost half of the $150 billion of flows was derived from IPOs in the quarter that Morgan Stanley was involved in. So you think about that flywheel. Yeah, I mean that's Morgan Stanley in a nutshell.

[Bloomberg Financial Analyst]

That number is so big it's kind of hard to believe.

[Host]

Never heard something like that.

[Bloomberg Financial Analyst]

$150 billion in net new assets in its wealth management business in a three month period. That's kind of nuts.

[Neil Sipes]

Yeah, I think the only one that comes to mind right off the hop is something like a blackrock who's producing numbers like that, who also reported this morning with also stellar results.

[Host]

So now these are the dumb numbers. The BlackRock numbers are just dumb. The assets under management are what now?

[Neil Sipes]

15 trillion.

[Host]

Trillion.

[Neil Sipes]

15 3.

[Host]

Again, is that incredible?

[Bloomberg Financial Analyst]

But so much of it is in passive investments. Right? I mean it's, you know, put it there and forget about it.

[Neil Sipes]

It is. But I think the story with blackrock now is a little bit of a shift underneath the surface. So yeah, we initially think of iShares and that's been the powerhouse for BlackRock. But increasingly the growth is coming from the higher fee buckets. Now we have active ETFs that are really taking off. You have things like private markets. So impressively, the growth at blackrock has started to shift a little bit more and be more consistent in those non ultra low beta type funds and into things that are more lucrative, which is obviously positive to the business. So you know, they did a handful of alternative transactions in the past couple of years. Those look like they're bearing fruit. And yeah, I mean the growth remains pretty stellar, which by the way, the growth is, tends to be harder to come by once you reach 15 trillion. But they keep putting up the numbers and I think it's getting rewarded for that.

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