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Expand chart
Data: FactSet; Chart: Axios Visuals

JPMorgan, Goldman Sachs and Morgan Stanley all saw trading revenue rise more than 20% in the third quarter, with Morgan Stanley's earnings report Thursday showing profits jumped 25% from a year earlier to $2.72 billion and a 16% increase in revenue, which rose to $11.7 billion.

The big picture: Even after lackluster headline earnings from Bank of America and Wells Fargo, the five biggest U.S. investment banks are on pace to rake in $100 billion in trading revenue this year.

  • The trend follows Q2's record for modern Wall Street’s trading and dealmaking units.
  • They’ve already generated almost $84 billion, more than any full year since 2010, per Financial Advisor.
  • The finance sector’s current earnings decline of 10.5% is less than half the 23.1% decline expected before the banks started reporting results last week.

Yes, but: The banks remain unloved on the stock market. State Street's financial sector ETF is down nearly 20% year to date and its bank-specific ETF, KBE, is down 30%.

  • Even after its searing earnings results on Wednesday, Goldman gave back all of its stock gains and then some yesterday.

Go deeper

Banks cash in as Wall Street blows out Main Street

Illustration: Aïda Amer/Axios

America’s big banks capped off a winning year, led by soaring Wall Street-facing business lines.

Why it matters: Banks cashed in on the white-hot IPO market, record debt issuance, and sky-high trading volume — all of which played out as economic peril softened the consumer side of their businesses.

Felix Salmon, author of Capital
Jan 21, 2021 - Economy & Business

How high-risk traders are using Reddit and TikTok to scalp huge profits

Illustration: Sarah Grillo/Axios

One of the most high-risk, high-return trading strategies of the moment is also the most democratic: Buying the stocks being pumped up on Reddit and TikTok, and then selling them for a huge short-term profit.

The intrigue: While most active trading strategies require expensive professional-grade software, this is a strategy that’s accessible to anybody who's Extremely Online.

Fed revamps rules for officials, restricts trades after controversies

Federal Reserve Chairman Jerome Powell. Photo: Kevin Dietsch/Getty Images

The Federal Reserve on Thursday announced significant changes to its rules regulating officials' financial activities following controversy last month over some officials' past trading practices.

Why it matters: The rule revamp is a coda on the biggest scandal to hit the Fed in recent memory.