Morgan Stanley reports a decline in quarterly profits, attributed to a decrease in income from investment banking.
FUNDAMENTAL OVERVIEW:
In the fourth quarter, Morgan Stanley’s profits dropped by nearly 30%, with a 9% increase in expenses. This rise was influenced, in part, by various one-time charges, including a legal settlement associated with its trading business.
The net profit margin of its investment bank, indicating the portion of sales converted into income after expenses, dropped to 8%, down from 21% in the third quarter and 16% a year ago. Despite the lackluster performance of the investment bank, the institution mentioned a raise in discretionary pay for its dealmakers.
Overall, Morgan Stanley’s net income for the fourth quarter declined to $1.5 billion, compared to $2.2 billion in the corresponding period the previous year. Profits for the entire year saw an 18% decrease, amounting to $9.1 billion.
Morgan Stanley’s performance was negatively impacted by a $249 million settlement reached with regulators last week, resolving a prolonged investigation into its block trading business.
Morgan Stanley’s shares were down nearly 4% by midday.
MORGAN STANLEY TECHNICAL ANALYSIS DAILY CHART:
Technical Overview:
Morgan Stanley is currently trading within a down channel.
Morgan Stanley is positioned below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.
Immediate Resistance level: 86.37
Immediate support level: 83.70
HOW TO TRADE MORGAN STANLEY
Following a substantial rise, Morgan Stanley faced resistance, leading to a sharp decline. Currently, it is on a trajectory toward a significant support zone, and a breach of this zone could potentially result in further downside, further, we can expect to sell on the rise.