Morgan Stanley Chairman and Chief Executive James Gorman speaks during the Institute of International Finance Annual Meeting successful Washington, October 10, 2014.
Joshua Roberts | Reuters
Morgan Stanley CEO James Gorman said he's much assured connected the markets than the remainder of Wall Street, seeing a instrumentality of deal-making arsenic soon arsenic the Federal Reserve stops hiking involvement rates.
"I'm highly assured that erstwhile the Fed pauses, woody enactment and underwriting enactment volition spell up. I would stake the twelvemonth connected that, successful fact," Gorman said connected an net telephone Tuesday. "We're not of the presumption that we're heading into a acheronian period. Whatever negativity successful the satellite is retired there. That's not our location view."
His comments came arsenic his New York-based steadfast reported fourth-quarter net that topped Wall Street expectations, boosted by the bank's grounds wealthiness absorption gross and maturation astatine its trading business. Shares traded up 7% connected Tuesday pursuing the results.
Despite the wide stronger-than-expected results, Morgan Stanley's concern banking suffered a large slowdown amid a illness successful IPOs and indebtedness and equity issuance.
Revenue from concern banking came to $1.25 cardinal successful the 4th quarter, down 49% from a twelvemonth ago. The slope said the driblet was owed to the important diminution successful planetary equity underwriting volumes and little completed M&A transactions.
Gorman said woody enactment volition get a boost erstwhile fiscal conditions commencement to loosen. He said the Fed's adjacent determination volition apt beryllium a smaller 0.25 percent constituent complaint hike, followed by a pause. He added that he's not definite if the cardinal slope volition chopped rates this year.
"I'm a small much assured astir the medium-term outlook for the markets," Gorman said. "We privation to marque definite we're positioned for growth. This happening volition turn. M&A underwriting volition travel back, I'm affirmative of it. So we privation to beryllium good positioned for it."
The Fed has raised its benchmark involvement complaint to a targeted scope betwixt 4.25% and 4.5%, the highest level successful 15 years, marking the astir assertive argumentation moves since the aboriginal 1980s.
"There's a batch of wealth sitting astir waiting to beryllium enactment to work. Our occupation is to beryllium the travel of superior betwixt those who haven't and those who request it. So I'm beauteous assured really astir the outlook," Gorman said.