For some years now, life on Wall Street trading desks has been a bit slow. Boring, really. Not much to do and—worse—not much money to make. In spite of his promise, President Donald Trump has just not been able to inject much volatility into this quiet-ass market. Until now: Low-vol products are blowing up! The market drivers are cratering (Thanks, Mr. President)! There’s a trade war a-brewin’! People are desperately selling everything! The good times are again here at last. Enjoy them while you can.
While no one is expecting a new peak in trading like the ones that occurred in 2009 and shortly before the financial crisis, the trading desks of the biggest U.S. banks are expected report revenue as much as 5% higher than a year ago, say analysts at Credit Suisse…. Stock-trading desks in particular are expected to report strong results, up more than 10% at the biggest firms, analysts at Goldman Sachs estimate….
“We’ve obviously had a pickup in revenues from a very depressed fourth quarter,” Morgan Stanley President Colm Kelleher told analysts in late March. “The withdrawal from [quantitative easing] is long-term good for the market and for investors. The pickup in [volatility] is long-term good.”