Record-breaking stock trading boosts Morgan Stanley's Q1 impressive performance.

Amid market volatility triggered by Trump's policies, Morgan Stanley's stock trading team delivered a strong quarterly performance, far exceeding analysts' expectations and continuing the strong performance of Wall Street's large investment banks in a turbulent environment. The financial report showed that for the quarter ending on March 31, Morgan Stanley achieved a net profit of $4.3 billion (or $2.60 per share), a significant increase from $3.4 billion (or $2.02 per share) in the same period last year, and also above the average analyst estimate of $2.20 per share. Total revenue increased to $17.7 billion, up from $15.1 billion in the same period last year. The bank's stock trading revenue for the first quarter reached a record $4.13 billion, a 45% year-on-year increase, significantly exceeding market expectations. Meanwhile, the wealth management business, which has been closely watched, also performed excellently with net new assets totaling $93.8 billion, higher than previous forecasts. The financial reports released by Morgan Stanley, JPMorgan Chase, and Wells Fargo & Company on the same day provide investors with a window to observe the early performance of the U.S. economy in the early stages of Trump's second term. However, compared to financial data, the market is more concerned about executives' outlook on the future how companies and consumers will deal with economic uncertainty in the wake of Trump's tariff policies causing significant market turbulence. As of Thursday, Morgan Stanley's stock price had fallen by approximately 15% since the beginning of the year, but after the financial report was announced, it rose slightly by 1% in pre-market trading on Friday. In terms of investment banking business, fee income in the quarter grew by 8%, slightly exceeding expectations, including advisory fees of $563 million, equity underwriting revenue of $319 million, and debt underwriting revenue of $677 million. The company's co-president, Dan Simkowitz, stated last month that due to customers evaluating the impact of Trump's policy changes, merger transactions and initial public offerings are "indeed in a state of suspension." However, he emphasized that "suspension does not mean cancellation" and predicted that trading activity may still be "slightly subdued" until the policy outlook becomes clear. When Trump was elected, he promised tax cuts and deregulation, which initially fueled optimistic expectations for a surge in trading in the market. However, his policy adjustments have instead heightened inflation concerns, leading companies to hold off or cancel some transactions. On the cost side, Morgan Stanley's non-interest expenses for the first quarter reached $12.1 billion, higher than expected, including $144 million in severance costs. The bank cut approximately 2,000 employees in March (or 2% of its total workforce), across various business lines and regions, to control operating costs. This financial report is the first annual performance evaluation since Ted Pick took over as CEO. Pick is known for revitalizing Morgan Stanley's equity business after the financial crisis and officially succeeded James Gorman as chairman of the board earlier this year, after Gorman had been CEO for over a decade.