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Pro Analysis

Breakingviews: Morgan Stanley positioned for Fed-fueled liftoff

Pigeons sit on a traffic light in front of the Morgan Stanley headquarters in New York.
Victor J. Blue | Bloomberg | Getty Images
Pigeons sit on a traffic light in front of the Morgan Stanley headquarters in New York.

Morgan Stanley is positioned for a liftoff–but timing is in the hands of the U.S. Federal Reserve. Solid trading and cost cuts left the Wall Street bank earning $1.5 billion, 62 percent higher than the same period last year. That put annualized return on equity just shy of 9 percent, the lower end of Chief Executive James Gorman's target for 2017. Some help from America's central-bank-cum-industry regulator could boost the ROE towards 11 percent, a figure that would rival Goldman Sachs.