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Morgan Stanley is winning a Wall Street grudge match

lloyd blankfein james gorman
lloyd blankfein james gorman

(Goldman Sachs CEO Lloyd Blankfein and Morgan Stanley CEO James Gorman.Reuters)

Morgan Stanley is pulling away from archrival Goldman Sachs in a key business.

The US bank on Wednesday reported second-quarter earnings that beat expectations. That followed Goldman Sachs reporting its earnings on Tuesday.

And a comparison of the two banks in a key business line — equities sales and trading — shows that Morgan Stanley is getting one over on its rival.

Morgan Stanley reported equity sales and trading net revenues of $2.1 billion, down from $2.3 billion a year ago.

The bank said the drop reflected "reduced volumes and levels of activity in Asia, partially offset by better performance in Europe and the US."

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At Goldman Sachs, equities revenues came in at $1.75 billion, down 12% from a year ago.

That means that Morgan Stanley generated close to $400 million more in equities than Goldman Sachs — a sizable gap.

It's also the most ground the firm has gained over Goldman Sachs since the first quarter of 2015, when the roles were reversed and Goldman's equities revenues slightly surpassed those of Morgan Stanley.

gs vs ms equities
gs vs ms equities

(Andy Kiersz)

Of course, results can vary from quarter to quarter, and it may be too soon to say whether a real trend is taking place.

But Morgan Stanley has been open about the fact that equities is the firm's number-one franchise. Ted Pick, who had been running the business, was promoted to oversee the entire sales and trading division, including fixed income, last year.

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