. Morgan Stanley Profits Decline: Insights & Analysis

Morgan Stanley Profits Decline: Insights & Analysis

17 Jan 2024

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.

TRADE SUGGESTION- LIMIT SELL– 85.42, TAKE PROFIT AT- 80.86, SL AT- 88.61.