Analysts may have sounded the third quarter earnings alarm a bit prematurely. Wall Street banks likely grinded out a tidy profit in Q3 despite all the gloomy forecasts dominated by talk of soft trading estimates and lousy mortgage numbers.
The six largest U.S. banks are expected to post a combined third quarter profit of $8.64 billion, a 14% jump year-over-year, according to new estimates compiled by Bloomberg. Original estimates filed in September called for just a 6% earnings increase across Wall Street.
One big takeaway from the report involves Goldman Sachs, which is expected to report a softer rise in earnings than its key rivals. For the first time in two full years, Morgan Stanley is expected to generate more revenue than Goldman. Such news would certainly lend some credence to Morgan Stanley CEO James Gorman’s decision to focus less on fixed income trading and more on its brokerage business. Goldman, which relies heavily on trading to generate revenue, appears more affected by the current environment than some other large banks.
Unfortunately for Wall Street’s workforce, much of the profit gains can be attributed to cost savings, not revenue gains. Returns on equity for the six largest U.S. banks averaged above 20% pre-crisis. Wells Fargo led the group with a pedestrian 14% ROE during the first half of the year. Indeed, it will be job cuts and compensation rollbacks that will be key factors in the final earnings numbers.
Rookie Mistakes and How to Fix Them (eFinancialCareers)
Traditional job hunting rules don’t apply to entry-level candidates. If you’re right out of school and have little or no professional experience, you need to build your resume in an alternative fashion. You also must be meticulous with your interview preparation to ensure that you don’t make rookie mistakes.
E&Y Books Solid 2013 (The Telegraph)
Big Four accounting firm Ernst & Young saw its revenue rise nearly 6% in the year ended in June, marking the company’s fastest rate of growth in five years. As we reported last week, E&Y plans to make more than 10,000 hires in 2014.
Consulting vs. Investment Banking (eFinancialCareers)
Whether you work at a top strategic consulting firm or a prestigious investment bank, you likely complain about the same things: the hours and the arrogance.
No More Excuses (WSJ)
The Tweeter/Twitter stock symbol mix-up that caused traders to mistakenly buy millions of shares in the once bankrupt home entertainment store shouldn’t see a repeat. Tweeter changed its stock symbol on Tuesday.
Gains Lost (Bloomberg)
An alternative investment called managed futures doesn’t appear to help investors do much managing of their future. The investment vehicle, utilized heavily by Morgan Stanley in recent years, does little but put money in the pockets of banks and fund managers.
Take it or Leave It (FT)
SAC Capital has until November to accept a $1.8 billion offer to settle insider trading charges or risk the penalty rising. The hedge fund appears reluctant.
Mutual Risk (WSJ)
Big banks are heavily regulated in large part due to their broader impact on the overall financial system. A new groundbreaking report from the Treasury Department’s Office of Financial Research finds that asset management firms hold the same risk and should be equally regulated. Shockingly, they don’t agree.
Buzz Around the Office
Sealing Your Fate (NY Daily News)
If you are ever caught face-to-face with a Great White shark, try balancing on his nose. It worked out for this one seal.
List of the Day: Resume Tips
Here are three ways to differentiate your resume from the pack.
- Include links to your social media profiles.
- Use as many facts, figures and numbers as you can.
- Include your volunteer work.
(Source: The Daily Muse)