(Bloomberg) -- Morgan Stanley wrapped up a week of wins for Wall Street trading desks, capitalizing on the Federal Reserve’s extraordinary rescue measures with record profit.Fixed-income trading revenue almost tripled, driving a 73% jump in total trading that surged past expectations. That spurred firmwide revenue and earnings to an all-time high amid wild market swings caused by the coronavirus pandemic.“Our decade long business transformation was intended to provide stability during times of serious stress,” Chief Executive Officer James Gorman said Thursday in a statement. “The second quarter tested the model and we performed exceedingly well, delivering record results.”The gains brought the overall trading haul total for the five biggest U.S. investment banks to $33 billion, a windfall that helped all of them survive the brunt of the coronavirus pandemic with profits intact.As the Covid-19 outbreak intensified earlier this year, the Fed cleared the way for companies to access desperately needed cash with programs that effectively served as credit backstops, allowing markets to thaw. That, in turn, spurred demand for Wall Street’s trading and underwriting services.Morgan Stanley’s trading gains come at a critical juncture for the bank, which is leaning on the business to shore up earnings as it makes a bigger pivot toward managing money for others. The bank’s pact to purchase E*Trade Financial Corp. in February is set to be the biggest acquisition by a top U.S. bank since the financial crisis, and a sign of Gorman doubling down on the success of his firm’s Smith Barney purchase a decade ago.Fixed-income trading revenue at Morgan Stanley came in at $3.03 billion, compared with the $1.81 billion analysts were predicting, based on estimates compiled by Bloomberg. Equities trading revenue rose to $2.62 billion, higher than the $2.27 billion average estimate.Morgan Stanley’s stock is little changed since the start of the year, the best performance among the top five banks and a show of resilience that kept its market capitalization above that of Goldman Sachs Group Inc. -- a perennial rival -- for much of the year. Shares of the company rose 0.9% at 7:26 a.m. in early trading in New York.Investment bankers at the firm posted revenue of $2.05 billion on the strength of a 64% jump in underwriting revenue, as the firm took its share of the surge in new stock and debt issuance by corporate America.Wealth-management revenue, which typically accounts for about half of Morgan Stanley’s total, rose 6% to $4.68 billion.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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