MS - Morgan Stanley

NYSE - NYSE Delayed Price. Currency in USD
42.53
+0.28 (+0.66%)
At close: 4:01PM EDT

42.70 +0.17 (0.40%)
After hours: 7:41PM EDT

Stock chart is not supported by your current browser
Previous Close 42.25
Open 42.39
Bid 42.56 x 800
Ask 42.72 x 1000
Day's Range 41.90 - 42.92
52 Week Range 36.74 - 48.67
Volume 9,326,452
Avg. Volume 9,911,533
Market Cap 70.292B
Beta (3Y Monthly) 1.30
PE Ratio (TTM) 9.29
EPS (TTM) 4.58
Earnings Date Oct 17, 2019
Forward Dividend & Yield 1.40 (3.31%)
Ex-Dividend Date 2019-07-30
1y Target Est 52.77
Trade prices are not sourced from all markets
  • Trading, Global Woes to Mar Morgan Stanley (MS) Q3 Earnings
    Zacks

    Trading, Global Woes to Mar Morgan Stanley (MS) Q3 Earnings

    Morgan Stanley's (MS) Q3 results are likely to reflect adverse impact from slump in trading activities, weak investment banking and lower interest rates.

  • Wells Fargo's (WFC) Q3 Earnings Disappoint on Lower NII
    Zacks

    Wells Fargo's (WFC) Q3 Earnings Disappoint on Lower NII

    Wells Fargo's (WFC) Q3 results reflect higher expenses and reduced net interest income, partly offset by elevated fee income.

  • Goldman (GS) Q3 Earnings Miss, Revenues & Costs Disappoint
    Zacks

    Goldman (GS) Q3 Earnings Miss, Revenues & Costs Disappoint

    Goldman Sachs' (GS) Q3 results reflect disappointing investing and lending revenues, underwriting business and higher expenses, partly offset by fixed income trading activities outperformance.

  • Financial Times

    China inflation hits six-year high as pork prices surge

    Pork prices continue to soar in China adding to worries for the country’s leadership, which is already grappling with declining exports and sluggish economic growth as the trade war with the US takes its toll. The price of pork, the most popular meat in China, jumped by 69.3 per cent compared with September last year, the National Bureau of Statistics said on Tuesday, after African swine fever forced farmers to cull livestock. The outbreak of swine fever has cut China’s pig population by 39 per cent.

  • Barrons.com

    E*Trade Could Be a Takeover Target. Why the Big Brokers Might Pass.

    Discount brokers have cut their commissions to zero, and that is sending their stocks lower. One analyst is now speculating about whether it makes sense for larger established brokers to buy one player on the cheap.

  • Don’t get too excited about progress on Trump’s ‘greatest and biggest deal ever’
    MarketWatch

    Don’t get too excited about progress on Trump’s ‘greatest and biggest deal ever’

    “The greatest and biggest deal ever made for our Great Patriot Farmers in the history of our Country,” as President Trump described it, triggered a broad rally in U.S. stocks on Friday. The Dow and S&P closed off session highs, and buyers are looking wary to start the week.

  • Hong Kong’s Top Securities Regulator Alder to Leave in 2020
    Bloomberg

    Hong Kong’s Top Securities Regulator Alder to Leave in 2020

    (Bloomberg) -- Ashley Alder, chief executive officer of Hong Kong’s Securities and Futures Commission,​ will step down at the end of his contract in September 2020.The watchdog’s head announced his decision Monday in internal communications, according to people with knowledge of the matter, who asked not to be identified because they’re not authorized to speak publicly. The government will begin a global search for Alder’s replacement, the people said.Alder has spent eight years overseeing one of the world’s biggest stock markets, a financial hub which over that period has cemented itself as the global gateway to China. His tenure included the start of trading links with the mainland as well as the controversial introduction of dual-class shares. In recent years, his agency has focused on trying to root out bad behavior among the city’s small-cap companies.Under Alder, the SFC has “pursued a set of intensive policy and operational reforms to tackle market risks as well as setting itself as a tough, competent and effective market regulator,” the commission said in a statement. It was Alder’s decision to leave, it said.Also the chairman of the International Organization of Securities Commissions, Alder became known for his hard-line stance toward misbehaving firms, fining HSBC Holdings Plc a record HK$400 million ($51 million) over the sales of structured products linked to Lehman Brothers Holdings Inc. in Hong Kong.In 2013, the SFC changed its rules to make underwriters more explicitly accountable for the quality of initial public offerings in the city, and it warned firms that they could be held criminally liable for the accuracy of share-sale prospectuses. The regulator also asked banks to improve underwriting standards and ask tougher questions when examining the accounts of would-be applicants.Earlier this year a number of international banks including UBS Group AG and Morgan Stanley agreed to pay a combined HK$787 million to settle cases related to their IPO work. UBS was also banned from sponsoring IPOs in the city for 12 months.Notable SFC fines​“Alder did a very good job not only in the local market but, owing to his role at IOSCO, to raise Hong Kong’s status and credibility in the international arena,” said Clement Chan, a non-executive SFC director and managing director of assurance at BDO Ltd.Alder started his career as a London-based lawyer in ​1984, before moving to Hong Kong. In an earlier stint at the SFC he oversaw the agency’s corporate finance division from 2001 to 2004. Prior to taking his current role he was head of Asia at the U.K. law firm then called Herbert Smith LLP.During his time in charge of the SFC, Alder also revamped the commission’s internal team structure, including the establishment of ICE -- Intermediaries, Corporates, Enforcement -- a cross-divisional working group intended to tackle corporate misconduct and protect investors. That put him at odds with much of the industry, with brokers adorning an image of his face with devil’s horns for a mass rally three years ago.Hong Kong’s financial secretary will chair a selection panel with SFC chairman Tim Lui and other senior officials to identify a new CEO, a spokesman said.As economic ties between Hong Kong and mainland China increase, the commission’s next head will need to navigate political relations, and balance regulation with market innovation.\--With assistance from Daniel Taub.To contact the reporter on this story: Kiuyan Wong in Hong Kong at kwong739@bloomberg.netTo contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Sam Mamudi, Benjamin RobertsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Investing.com

    Asian Markets Rise Amid Positive Trade Talks Progress

    Investing.com - Asian markets in morning trade on Monday after the U.S. and China agreed on a “phase one” trade deal over the weekend, although some analysts voiced skepticism about the accord.

  • Trade war pause, retail sales, bank earnings – What to know in the week ahead
    Yahoo Finance

    Trade war pause, retail sales, bank earnings – What to know in the week ahead

    The coming week’s docket of economic reports and earnings releases comes just following the Trump administration’s announcement of a partial trade deal with China late last week.

  • Financial Times

    Brexit, US third-quarter earnings, Chinese economic data

    This will be a key week for Brexit because Boris Johnson will need to ask Brussels for an extension on the UK’s withdrawal from the EU under the terms of the Benn Act if parliament has not approved either a deal or no-deal exit by Saturday. The European Council meets in Brussels on Thursday and Friday, where any deal reached will need to be signed off. Mr Johnson’s team is believed to be drawing up plans to fudge the most controversial issue dogging negotiations with Brussels: whether Northern Ireland should be part of the EU customs union to avoid the need for a hard border with the Irish Republic.

  • Top Research Reports for Toyota, Amgen & TJX
    Zacks

    Top Research Reports for Toyota, Amgen & TJX

    Top Research Reports for Toyota, Amgen & TJX

  • Earnings Preview: Morgan Stanley (MS) Q3 Earnings Expected to Decline
    Zacks

    Earnings Preview: Morgan Stanley (MS) Q3 Earnings Expected to Decline

    Morgan Stanley (MS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

  • Banks to Get Respite After Fed Approves Simpler Volcker Rule
    Zacks

    Banks to Get Respite After Fed Approves Simpler Volcker Rule

    The changes in Volcker Rule are expected to support banks' financials amid a challenging operating environment and lower interest rates.

  • Bloomberg

    Morgan Stanley Unit in $330 Million Deal for Wind Farm Operator

    (Bloomberg) -- Morgan Stanley’s infrastructure arm agreed to buy German wind farm operator PNE Wind AG for 300 million euros ($331 million), highlighting investor appetite for renewable energy.PNE Wind’s board accepted a bid of 4 euros a share from Morgan Stanley Infrastructure Partners, which intends to delist the stock, according to a statement Thursday that confirms an earlier Bloomberg News report.Demand for renewable energy is rising amid falling prices and an investor push to curb emissions and fight climate change. Honda Motor Co. agreed last month to buy 320 megawatts of electricity from wind and solar farms in Texas and Oklahoma, the biggest ever clean-power purchase by an automaker.The PNE deal still needs to meet a minimum acceptance threshold of 50% of the shares plus one to become final, and not all investors are in favor.“Based on the strong planning and development pipeline, the proposed offer fundamentally undervalues the company,” Enkraft Capital Managing Director Benedikt Kormaier said in an email. The investor earlier threatened an audit of the sale if PNE couldn’t show that a the company had run a standard auction.It’s “distressing to see the management and supervisory boards trying to enable MSIP to acquire a large stake in the company below market value and attempting to force shareholders out of the company by threatening to delist shares,” he said in the email.PNE rose as much as 5.8% in Frankfurt. The shares have gained 65% this year.To contact the reporters on this story: Eyk Henning in Frankfurt at ehenning1@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.netTo contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net, John Lauerman, Marthe FourcadeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Hedge Funds Have Never Been More Bullish On Morgan Stanley (MS)
    Insider Monkey

    Hedge Funds Have Never Been More Bullish On Morgan Stanley (MS)

    Is Morgan Stanley (NYSE:MS) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting […]

  • GuruFocus.com

    Wall Street Analysts Divided as Earnings Season Looms

    Goldman Sachs says all is well, but Morgan Stanley sees potential disaster ahead Continue reading...

  • Barrons.com

    Morgan Stanley Tool Helps Advisors Tackle Daily Risks

    The wirehouse is working on a digital tool that will help its financial advisors quickly assess the impact of news and other information on client portfolios.

  • Emerging-Market Investors Don’t Expect an Olive Branch in Trade Talks
    Bloomberg

    Emerging-Market Investors Don’t Expect an Olive Branch in Trade Talks

    (Bloomberg) -- Trade war-hardened emerging-market investors aren’t counting on any breakthrough in trade negotiations as talks between the U.S. and China are set to resume Thursday in Washington.BNP Paribas Asset Management has been reducing its exposure in junk-rated debt, while Union Investments Privatfonds GmbH is favoring investment-grade rated bonds over high-yield debt. And in case any breakdown in discussions triggers a flight to safety, Aviva Investors has been been buying the yen.“We expect another empty-handshake meeting,” said Bryan Carter, London-based head of emerging-market fixed-income at BNP Paribas Asset. Ultimately, no substantive agreement will be reached, he said.Emerging-market stocks rebounded 2.2% since an early September low, when China and the U.S. announced they would hold face-to-face negotiations once again. The rally has since petered out after President Donald Trump said he won’t seek an interim agreement and global growth showed further signs of deterioration as the year-long trade war dragged on. Impeachment proceedings have also spurred concern that it may hinder Trump’s hand in the negotiations.Below are comments from investors and analysts:Maddi Dessner, multi-asset strategist at JP Morgan Asset Management in New York, tells Bloomberg Television:Bar is much lower for U.S.-China trade talks this week than it has been in previous negotiations“Investors are much more conservatively positioned than they were even six months ago,” so there’s not as much of a negative riskTo have exposure to equities, investors can buy futures, stocks or upside calls, which allow them to gain upside in rallies and lose equity risk in their portfolio when market draws downBrendan McKenna, a currency strategist at Wells Fargo in New York:“Trade relations between the U.S. and China will probably get worse before they get better”No trade truce or breakthrough this week, and Trump will probably move forward with plans to increase and impose more tariffsEscalations will hurt EM currencies broadly, especially emerging Asia’s IDR, INR and PHP; High-beta currencies TRY, ZAR, MXN and BRL likely to also come under pressureExpect more downside in the renminbi and more risk-sensitive currencies such as the AUD, NZD, KRWJim Caron, global head of macro strategies at Morgan Stanley Investment Management in New York:Trade tensions put a damper on global growth, and expectations are for continued talks“I don’t think that anybody really expected there to be a grand bargain this week with China”Alejandro Cuadrado, a senior BBVA strategist in New York:Likes being “defensive (USD biased) with a preference for hedging through CLP” ahead of trade talks“Our expectations are low as we don’t see the incentives fully lined up”Prefers hedging through options in LatAm crosses given region’s sensitivity to global trade, lower levels and higher costsSergey Dergachev, senior portfolio manager at Union Investment in Frankfurt:Expectations for a breakthrough are “very low,” though it will be important to see how the meeting will end and the mood during the meetingFuture steps are also crucial, such as when the next round of talks will beDergachev said he’s positioned “mildly defensive,” and is focusing on the credit quality of his holdingsWerner Gey van Pittius, co-head of emerging-market fixed income at Investec Asset Management in London:The trade war will last longer than what the market is hoping because it’s not just about trade. There’s an element in the U.S. that is afraid of “the geopolitical rise of China” and that is much bigger than just trade right nowChina is preparing for the next decade and trying to reduce the impact of the trade war by opening up their markets, attracting capital, and moving away from U.S. influence by selling Treasuries and buying gold. Their time horizon is beyond the U.S. electionsHe is taking a long duration strategy in his bond portfolio as the trade war raises the risk of a recessionCarter at BNP Paribas Asset:Politics are driving the negotiations, and not economicsThe upcoming 2020 presidential election, and impeachment investigations in the House, are the dominant context for the trade meetingCarter said he plans to continue cutting exposure to junk-rated bonds even if there was a positive outcome from the meeting. That’s because the firm doesn’t expect any comprehensive agreement will be reached that would reverse the negative economic effects of the trade warMark Haefele, global chief investment officer at UBS Global Wealth Management in Zurich, tells Bloomberg Television:Base case is for tensions to neither worsen or improve much, with the U.S. to go ahead with the announced additional tariffsUBS Global is underweight equities globally at this time; the trade impact will be felt hardest in Europe and emerging markets, while the S&P will probably be range-boundStuart Ritson, emerging-market bond fund manager at Aviva Investors in Singapore:It is hard to be too optimistic on the outcome of trade talks given the narrow scope of the discussionsThe firm’s local-currency bond portfolio is “relatively defensive” at the moment, given the weak global growth backdrop. It is also positioned for further easing by EM policy makers and has increased exposure to the yen, given its anti-cyclical properties, and still attractive valuationsRobert Carnell, chief economist for Asia Pacific at ING Groep NV in Singapore, writes in a note:China may see it as advantageous to keep the trade war alive, but under control, pending political developments in the U.S.For the U.S., the benefits of fighting China on trade may now be outweighed by the short-term hit to the economy, in terms of popular support and potential votes for Trump at next year’s presidential electionStephen Innes, an Asia-Pacific market strategist at AxiTrader, writes in a report:In the absence of a significant catalyst, Asian currencies will continue to track the yuan, which remains the best global barometer for trade war riskHeadline risk will continue to influence trading flows in the Chinese currency(Updates with analyst comments throughout)\--With assistance from Sydney Maki, Aline Oyamada, Chester Yung, Netty Ismail and Carolina Wilson.To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.netTo contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net, Karl Lester M. YapFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    PayPal’s Exit From Libra May Trigger Fresh Hearings, Cowen Says

    (Bloomberg) -- PayPal Holdings Inc.’s decision to pull out of the Libra Association may lead to more congressional hearings from critics seeking to press the payments company for more details on why it walked away, according to Cowen.A push for hearings may intensify further if Libra -- Facebook Inc.’s effort to develop a digital currency -- were to lose other members, analyst Jaret Seiberg wrote. Not only has Facebook failed to win Washington’s “buy in,” it’s also lost support and the “messaging war,” he said. And Seiberg warned that other backers may join PayPal in retreating rather than “risk getting pulled into the policy fights over privacy and private currencies.”PayPal pared losses of as much as 2% as Facebook declined as much as much as 1.1%. Meanwhile other Libra backers -- Visa Inc. and Mastercard Inc. -- both fell more than 1.7% before paring some of the drop. Financials declined across the board, along with the broader market, as analysts fretted about banks’ prospects and trade tensions flared.On Monday, Morgan Stanley analyst James Faucette described PayPal’s decision as wise. “While we believe it made sense for PayPal, Visa, and Mastercard to initially participate in Libra to defend their flanks and maintain optionality, the amount of political attention Libra has received has made the opportunity less attractive,” Faucette wrote.Cowen’s Seiberg has consistently doubted Facebook’s ability to secure the necessary regulatory approvals as the social media company is “framing Libra as an independent entity that will control the transaction data of users.” Big partners exiting may mean it will be “harder to convince policymakers that Libra is independent of Facebook.” He expects Facebook will stay in the spotlight and will face mounting scrutiny as the 2020 election approaches.Separately, Height Capital Markets in a note said that “one withdrawal does not doom Libra, but if there is a cascade of departures the Libra project may collapse before it can launch.” The firm also saw regulators’ focus on financial stability as “overstated,” as Libra won’t be issuing any country’s currency or debt, but will convert a given currency into Libra currency, and Libra will be “backed by a basket of short term debt instruments issued by sovereign nations.”Earlier, Loop Capital analyst Alan Gould wrote that Libra “will likely take much longer than initially anticipated” and more government regulation and fines could be on the way.\--With assistance from Cristin Flanagan.To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.netTo contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will DaleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Bond-Trading Bots on Verge of Becoming Masters of the Universe

    (Bloomberg) -- They were the “golden crumbs,” those bits of money that fall off as bonds get traded around the world.Those crumbs were enough to make bond traders the Masters of the Universe in Tom Wolfe’s 1987 novel “The Bonfire of the Vanities.” But those days are long gone.AllianceBernstein Holding LP has introduced a robot to execute corporate-bond trades directly with bots at dealer counterparties. The $587 billion asset manager used the system in August to complete three trades with similar digital assistants at Citigroup Inc., Morgan Stanley and Royal Bank of Canada.“We’ve taken a traditional human-to-human interaction and augmented it to allow a machine to meet another machine,” said Maryanne Richter, global head of credit electronic trading strategy at Morgan Stanley in New York.While computers have already transformed equities trading, the corporate bond market has been one of the last holdouts in finance’s digital revolution. Firms are slowly stepping up their use of artificial intelligence and crunching reams of data to get ahead as electronic bond trading becomes more prevalent.Automation is making inroads on trading desks, such as at UBS Group AG and HSBC Holdings Plc, where robots are making bond  sales more efficient. More than 40% of capital market participants that took part in a Greenwich Associates survey earlier this year said that their firms are using AI for trading. Another 17% said they will introduce it within the next two years.Still, this is the first time that bots have traded with other bots in corporate bonds, according to AllianceBernstein.The robot is an extension of the asset manager’s virtual assistant, named  Abbie, which pores through data and identifies for traders the best bonds to buy or sell. AllianceBernstein gathers about 4 million data points a day to work out the best ways to trade including bid and offer prices from dealers and electronic trading venues.“Right now they aren’t replacing traders, they’re really just helping us trade”Executing trades involves a number of manual steps. Currently it can take traders up to 20 minutes to negotiate the size, price and precise maturity of a trade with a counterparty on the other end of the phone or instant message. With bots that could become almost instantaneous.“Machines are helping us to make smarter decisions and be more efficient,” said James Switzer, global head of fixed-income trading at AllianceBerstein. “I guess we could look out 5 or 10 years and start anticipating what would happen, but right now they aren’t replacing traders, they’re really just helping us trade.”The robot is designed to save traders time and beat competitors, a meaningful edge in a secondary market starved of liquidity. It could also be developed using AI to remember the best counterparties for certain trades and target them first in future, a system known as smart order routing, according to Switzer.In the test cases, AllianceBernstein made three separate trades in investment-grade U.S. corporate bonds with each of the three banks and the firm expects to expand that to more dealers in the coming months. The bots agreed to the transactions on the signal of a human trader.“The master is telling the dog to fetch and bring the stick back,” said Switzer.In the future, AllianceBernstein expects the bot to spot the best prices within parameters previously set by a trader and execute automatically. That would mean it would no longer need a human to give the execute command, although to be sure, the firm will still have human checks and balances including compliance.Citi and Morgan Stanley both expect their trading algorithms to be able to directly handle requests to trade and execute without human command, depending on the nature of the transaction. A spokesman for RBC Capital Markets declined to comment on the trade with AllianceBernstein.“We’re automating parts of a very manual process,” said Kevin Foley, head of markets electronification at Citi in New York. “Phase two is fully-automated straight-through processing.”It’s surely a world Bonfire’s bond trader Sherman McCoy would have no place in as the crumbs disintegrate.“Just imagine that a bond is a slice of cake, and you didn’t bake the cake, but every time you hand somebody a slice of the cake a tiny little bit comes off, like a little crumb, and you can keep that,” Wolfe wrote in his novel.(Updates with reference to electronic trading in fifth paragraph. An earlier version of this story corrected assets under management for AllianceBernstein in third paragraph.)To contact the author of this story: Katie Linsell in London at klinsell@bloomberg.netTo contact the editor responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, James HertlingFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • 10% Growth? Earnings Are About to Meet Reality
    Bloomberg

    10% Growth? Earnings Are About to Meet Reality

    (Bloomberg Opinion) -- Earnings season unofficially kicks off next week, when the big money-center banks start reporting their results for the third quarter. Expectations are low, with analysts projecting U.S. companies to say profits fell 3% from a year earlier. What’s more important, though, is what companies say about the future, and in that regard, this earnings season could make or break the stock market.Although analysts have been trimming their 2019 forecasts all year – they took down their third-quarter estimates, for example, from a previous call for a 5.3% gain to the current expected drop –  they have inexplicably kept their 2020 projections largely unchanged, calling for earnings growth of 10% next year. That’s even as a Duke University/CFO Global Business Outlook released last month showed that more than half of U.S. chief financial officers anticipate the economy will be in a recession within a year, with optimism at its weakest point since 2016. “The number of CFOs growing more pessimistic outnumbers those growing more optimistic by a five-to-one margin,” Duke finance professor John Graham, who authored the report, said in a video.So, do analysts really still believe earnings growth of 10% is achievable? We’ll soon know the answer to that question, because – as the folks at DataTrek research point out – now is the time when companies, investors and analysts start focusing on the year ahead. The unpredictability of the U.S.-China trade war has made it next to impossible for companies to effectively predict where earnings may be the next quarter, let alone in 2020. But as of now, it’s hard to say where earnings growth might come from.The Institute for Supply Management said last week that its index measuring activity in the manufacturing sector fell to its lowest level since 2009, below even the level that it fell to when earnings growth stalled between late 2014 and mid-2016. Perhaps more troubling, the ISM’s gauge of activity in the services sector, by far the largest part of the economy, tumbled to its lowest since 2016.For all the bad news on the domestic front, the international picture isn’t any better. This is important because members of the S&P 500 now generate as much of 40% of their revenue outside the U.S. When the OECD last month updated its global gross domestic product forecasts, it cut its 2019 estimate for U.S. growth by 0.3 percentage point to 2%, while slashing its estimate for the Group of 20 economies as a whole by 0.4 percentage point to 3.2%. Its 2.9% estimate for global growth this year would mark the world economy’s worst performance since the global financial crisis. Where things get interesting is when you compare the earnings outlook for the S&P 500 to those indexes tracking smaller companies that aren’t as exposed to the broader global slowdown as their larger, multinational peers. Morgan Stanley’s chief U.S. equity strategist, Michael Wilson, pointed out in a research note last week that analysts’ forecasts for earnings per share among members of the S&P MidCap 400 over the next 12 months have come down 3.7%, while EPS estimates for members of the Russell 2000 Index have been reduced by 6.3%. The implication is that it’s only a matter of time before the estimates for the S&P 500 members come down, too.There’s a danger for the stock market in all of this because it seems investors are buying in to analysts’ current optimistic 2020 forecasts. The S&P 500 is trading at 16 times next year’s expected earnings. That’s up from a little over 14 times back in January, when profits were still expected to advance in 2019. It’s also about to turn higher than the average during the 2014-2016 earnings recession.The lack of earnings growth means that the stock market is increasingly beholden to the Federal Reserve and continued interest-rate cuts to support lofty valuations. Earnings season “seems unlikely to provide the punch necessary to stimulate excitement about the outlook,” Bloomberg Intelligence equity strategists Gina Martin Adams and Michael Casper, wrote in an Oct. 3 research note. “Sadly, it may come down to policy makers to offer risk-tolerance a shot in the arm.” That sums it up about right.To contact the author of this story: Robert Burgess at bburgess@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Robert Burgess is an editor for Bloomberg Opinion. He is the former global executive editor in charge of financial markets for Bloomberg News. As managing editor, he led the company’s news coverage of credit markets during the global financial crisis.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • SoftBank’s Damage From Uber, WeWork Could Exceed $5 Billion
    Bloomberg

    SoftBank’s Damage From Uber, WeWork Could Exceed $5 Billion

    (Bloomberg) -- Masayoshi Son’s startups have had a rough few months, from a botched initial public offering by WeWork to a sharp decline in shares of Uber Technologies Inc. Now analysts are beginning to calculate that the damage for Son’s SoftBank Group Corp. will likely reach into the billions of dollars.Mitsubishi UFJ Morgan Stanley Securities Co. cut its profit estimate for SoftBank’s Vision Fund, its main investment vehicle, by 580 billion yen ($5.4 billion) to an operating loss of 367.6 billion yen for the September quarter, citing declines in the stock prices of Uber and Slack Technologies Inc. and the withdrawn WeWork IPO. Sanford C. Bernstein & Co. estimates that Vision Fund’s writedown alone could be as much as $5.93 billion, with another $1.24 billion drop for the portion of WeWork owned by SoftBank Group.Son is going through a particularly rocky stretch after repositioning SoftBank from a telecom operator into an investment conglomerate, with stakes in scores of startups around the world. He built a personal fortune of about $14 billion with strategic bets on companies such as China e-commerce giant Alibaba Group Holding Ltd. But the recent troubles have weighed on SoftBank’s shares, pushing them down about 30% from their peak earlier this year as investors grow skittish about startup valuations.“Profits in the [SoftBank Vision Fund] segment may still see considerable volatility ahead,” Mitsubishi UFJ analyst Hideaki Tanaka wrote.Uber’s share price drop was the main culprit for Vision Fund’s poor performance in the second quarter, Tanaka wrote. He also reduced SoftBank Group’s fiscal year operating profit to 1.01 trillion yen, from 1.59 trillion yen.SoftBank may book a $3.54 billion drop in the value of its Uber stake, a $750 million decline for Guardant Health Inc. and take a $350 million hit for Slack, according to Chris Lane, an analyst at Sanford C. Bernstein. Lane said the combined writedown for WeWork may be as much as $2.82 billion, assuming a slide in the company’s valuation to $15 billion from $24 billion, but remains uncertain. He said his estimates represent a worst-case scenario and may be offset by gains from other unlisted companies.In an interview with the Nikkei Business magazine, Son said he is unhappy with how far short his accomplishments to date have fallen of his goals.“The results still have a long way to go and that makes me embarrassed and impatient,” Son said. “I used to envy the scale of the markets in the U.S. and China, but now you see red-hot growth companies coming out of small markets like in Southeast Asia. There is just no excuse for entrepreneurs in Japan, myself included.”“It only just began and I feel there is tremendous potential there,” Son told Nikkei Business. The strategy is to invest in companies that share his vision of a world being reshaped by artificial intelligence, he said.SoftBank Gives ‘Very Public Lesson’ to Founders in WeWork OusterWeWork and Uber may be losing money now, but they will be substantially profitable in 10 years’ time, Son said in the interview. At a private retreat for portfolio companies late last month he had a different message: become profitable soon. At the gathering, held at the five-star Langham resort in Pasadena, California, Son also stressed the importance of good governance. Just days later, SoftBank led the ouster of WeWork’s controversial co-founder Adam Neumann.(Updates with Sanford C. Bernstein’s projections from second paragraph)To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    UPDATE 1-Longtime Morgan Stanley prime brokerage exec to retire -memo

    Alex Ehrlich, co-head of the prime brokerage business at Morgan Stanley, plans to retire at the end of 2019, according to an internal memo seen by Reuters and confirmed by a spokesman. Ben Walker, who also co-heads the business, will become the sole chief of the unit, the Oct. 7 memo said. Ehrlich joined Morgan Stanley in 2009 after roles at UBS AG and Goldman Sachs in a career spanning 40 years.