Morgan Stanley (NYSE:MS) stock rose 3.95% (As on July 15, 11:22:38 AM UTC-4, Source: Google Finance) after the company misses analysts’ expectations for both topline & bottom line, led by weakness in the investment banking business. The quarterly results come as Wall Street’s top firms have faced headwinds like soaring inflation, uncertain markets, and war in Ukraine. Investors are also increasingly anticipating a US recession. Earlier this year, Gorman warned that there’s a 50% chance of a recession. Net income applicable to Morgan Stanley was $2.5 billion, compared with net income of $3.5 billion for the same period a year ago. Institutional Securities reported net revenues for the current quarter of $6.1 billion compared with $7.1 billion a year ago. Investment Banking revenues down 55% from a year ago. Advisory revenues decreased from a year ago driven by lower levels of completed M&A transactions. Equity underwriting revenues significantly decreased from a year ago on lower issuances given uncertainty in the markets. Fixed income underwriting revenues decreased from a year ago as macroeconomic conditions contributed to lower issuances. Equity net revenues up 5% from a year ago on the back of continued strong client engagement and elevated market volatility, with particular strength in derivatives products and prime brokerage. Fixed Income net revenues up 49% from a year ago, reflecting strength in our macro businesses and in commodities on increased client activity and volatility in the markets.

Moreover, Wealth Management reported net revenues of $5.7 billion compared with $6.1 billion a year ago. Pre-tax income was $1.5 billion compared with $1.6 billion a year ago. Asset management revenues increased 2% reflecting higher asset levels driven by continued positive fee-based flows, partially offset by lower market levels compared to a year ago. Transactional revenues13 decreased 17% excluding the impact of mark-to-market losses on investments associated with certain employee deferred compensation plans. The decrease was driven by lower client activity from a strong prior year period. Investment Management reported net revenues of $1.4 billion compared with $1.7 billion a year ago. Pre-tax income was $249 million compared with $430 million a year ago.

MS in the second quarter of FY 22 has reported the adjusted earnings per share of $1.39, missing the analysts’ estimates for the adjusted earnings per share of $1.53. The company had reported 11 percent fall in the adjusted revenue to $13.13 billion in the second quarter of FY 22, missing the analysts’ estimates for revenue of $13.48 billion.