The U.S. stock market has been on a losing streak lately, ending last week with its ninth consecutive down day, the longest string of daily declines since 1980.
Wouldn't it be nice to have a method of making money even when the market is sliding, way to guarantee profits.
Why does the market keep falling? The latest economic numbers were good.
The answer may be the U.S. presidential election, which is close. Even if Republican presidential candidate Donald Trump loses Tuesday, as most expect, his constant complaint that the system is "rigged" could lead to civil disorder, with the potential to disrupt the world's largest economy.
Although the market averages themselves are down in the short term, the big banks have been enjoying record profits. In the third quarter, Bank of America, Citigroup and JPMorgan Chase all beat earnings expectations.
Morgan Stanley (MS) may have done the best of all and remains a solid bet on a thriving financial services sector. Shares of the stock rose 3.71% in Monday trading. Investors should grab shares.
Morgan Stanley's success was broad-based, as all three of the bank's divisions, Institutional Securities, Wealth Management, and Investment Management, beat expectations.
Overall, the firm reported net revenues of $8.9 billion for the quarter that ended Sept. 30, compared with $7.8 billion a year ago -- a more than 14% gain. Earnings per share jumped from 48 cents to 81 cents, year over year (most analysts expected 63 cents).
Chief Executive James Gorman said, "While the environment was more challenging for our equity underwriting and asset management businesses, our expense initiatives remain on track. Overall the results reflect steady progress against our long term strategic goals."
The New York-based investment firm has handled some of the biggest deals of recent years. It should benefit from its role in Microsoft's acquisition of LinkedIn earlier this year and from AT&T's recently announced purchase of Time Warner. According to Thomson Reuters, if that merger goes through, it will vault Morgan Stanley into the top position for M&S activity in 2016.
Morgan Stanley's Institutional Securities has been the most reliable division for the company in recent years. This segment raises capital and also provides institutions with financial advisory services, including corporate lending, mergers and acquisitions, and real estate finance.
Morgan Stanley operates in 24 countries and has more than 1300 offices and 60,000 employees. The company has about $2 trillion of assets under management. That number is likely to continue rising.
Although the company's headquarters remains in New York, it also has substantial operations in Hong Kong, London, and Tokyo. With its well-known brand and global reach, the price-earnings ratio of around 12 is reasonable.
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