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Deals flurry and wealth unit offset trading dip at Morgan Stanley

Morgan Stanley became the latest Wall Street bank to report that higher fees from investment banking had helped to up pick some of the slack from a slowdown in trading as it posted an increase in revenues and profits for the second quarter.

The results, which were ahead of analysts’ forecasts, underscored how Wall Street’s biggest banks have pivoted away from trading stocks and bonds towards advising on mergers and acquisitions amid a deluge of pandemic-driven deals.

Earlier this week JPMorgan Chase and Goldman Sachs also reported strong performances at their investment banking divisions as companies took advantage of cheap credit to sign a flurry of deals intended to prepare their businesses for the economic reopening.

Chris Kotowski, a banking analyst at Oppenheimer, said: “Between Covid and the stimulus, you have set in motion forces for the average CFO, CEO and board in all industries to re-examine business models. You had great access to capital. You’ve put all kinds of M&A dialogue on table.”

Column chart of Percentage increase in the second quarter compared to a year earlier showing Wall Street shifts from trading stocks to doing deals

Morgan Stanley’s investment banking revenues for the three months to the end of June came in at $ 2.4bn, 15.8 per cent higher than a year ago and above analyst expectations of $ 2.06bn. JPMorgan and Goldman said earlier this week that second-quarter revenues at their investment banking units had jumped 25 per cent and 36 per cent, respectively, compared with the same period last year.

Shares in Morgan Stanley were up 0.7 per cent in mid-afternoon New York trading.

However, the benefit of higher dealmaking fees on Wall Street has been offset by a drop in trading compared with this time a year ago, when the Covid-19 pandemic prompted a bout of volatility in financial markets.

Like its main Wall Street rivals, Morgan Stanley reported lower quarterly trading revenues, which fell by 20 per cent versus a year ago. Although its equities desk posted an 8 per cent increase in revenues compared with the second quarter of 2020, that was more than offset by a 45 per cent slide in trading bonds and other fixed income instruments.

Although Morgan Stanley’s investment banking gains were outpaced by Goldman and JPMorgan, its wealth management unit — which gives financial advice and makes loans to rich clients — posted a strong performance.

Column chart of Goldman and JPMorgan biggest beneficiaries of financial advisory boom showing Wall Street’s Big Three investment banking mix in Q2

Morgan Stanley said loans to rich clients grew 35 per cent year-on-year to $ 114.7bn from $ 85.2bn. Net revenues at the unit jumped from $ 4.7bn to $ 6.1bn.

Sharon Yeshaya, Morgan Stanley’s chief financial officer, told the Financial Times that loan growth was being propelled by clients taking advantage of booming asset prices to crystallise “some of those gains” and using them to “buy other things”.

Morgan Stanley’s overall second-quarter revenue came in at $ 14.8bn, up 8 per cent from a year earlier and ahead of analysts’ estimates of $ 14bn, according to data compiled by Bloomberg. Net income was $ 3.5bn, up from $ 3.2bn a year ago.

Earnings were flattered by the recent integration of the online trading platform ETrade and the money manager Eaton Vance, which Morgan Stanley acquired last year.

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Austin Police to temporarily suspend motors unit starting in August

Austin Police to temporarily suspend motors unit
by: Jaclyn Ramkissoon, KXAN Staff Posted: May 20, 2021 / 09:13 PM CDT/ Updated: May 20, 2021 / 10:22 PM CDT

AUSTIN (KXAN) — The Austin Police Department confirmed to KXAN Thursday that its motors unit will be temporarily suspended starting Aug. 1.

Officials said traffic enforcement will continue to be the responsibility of all officers.

They add the motor unit’s services, such as police escorts, will be available as needed.

But due to staffing reallocation because of budget changes, APD said it needs to move officers to support patrols.

“The Austin Police Department is committed to ensuring a prompt response to emergency calls to 911. We continue to evaluate our patrol staffing needs and reallocate officers from specialized units to support Patrol operations as needed. Several units have been impacted by this staffing reallocation. As of August 1, the Motors unit will be temporarily suspended, and traffic enforcement will continue to be a responsibility of all APD officers. Services provided by the Motors unit such as escorts will be available, as needed. The safety of the Austin community remains our top priority.”

-Austin Police Department spokesperson

The Reimagining Public Safety Task Force in April suggested using unarmed civilians to do traffic enforcement to prevent minor traffic stops from escalating. This would only be for minor traffic offenses, the task force said, explaining DUIs, stolen cars and speeding would still be handled by police.

Read Also: Google geofencing helps Austin police arrest suspect in food truck robberies

There are currently no plans to implement this idea, but Austin is not the first city to have talked about this.

Berkeley, California implemented a similar plan in 2020. The city is working to form a new transportation department to handle minor traffic stops, like running a stop sign or forgetting to use a turn signal.

Author: Jaclyn Ramkissoon
This post originally appeared on KXAN Austin

Man accused of locking teen in storage unit for 5 days and sexually assaulting her

Man accused of locking teen in storage unit for 5 days and sexually assaulting her
CYPRESS, Texas (KTRK) — Authorities have arrested a 34-year-old man accused of locking a 17-year-old in a Cypress storage unit for days and sexually assaulting her.The teen made the outcry of the incident to authorities on April 8, according to the Harris County Precinct 1 Constable’s Office.

On March 27, the suspect took the teen victim against her will to a storage facility in the 19100 block of FM 529 in Cypress, according to investigators.When at the storage unit, the suspect, identified as Joel Micah Arnold, locked the teen inside and kept her for five days. Authorities said Arnold displayed a firearm to the teen, injected her with drugs and sexually assaulted her. He then released her.

Following the teen’s outcry, Arnold was arrested on April 14. He is charged with aggravated kidnapping, sexual assault and trafficking of a child.In addition to his arrest and charges, investigators believe there could be more victims who Arnold may have previously assaulted. Anyone with information about Arnold or other victims is urged to contact Precinct 1’s human trafficking hotline at 832-927-1650.

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Mycah Hatfield

This article originally appeared on ABC13 RSS Feed