Wall Street's first-half profits rocketed 82% to their highest since 2009
- New York's securities industry notched its largest first-half profit since 2009 due to sharp increases in trading and underwriting activity, New York State Comptroller Thomas DiNapoli said in a Thursday report.
- Pretax profits through the first six months of the year surged 82% to $27.6 billion. Underwriting revenues hit a record of $10.4 billion in the second quarter.
- The first-half performance suggests the securities industry "will be markedly profitable for the year, barring any further unforeseen events," DiNapoli said.
- Still, Wall Street's success can't offset all of the lingering damage on Main Street, the comptroller said, adding that Congress should quickly pass new fiscal stimulus.
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New York's securities industry posted its largest first-half profit since 2009 on the back of Federal Reserve easing and unprecedented fiscal stimulus.
Pretax profits over the first six months of 2020 surged 82% from the year-ago period to $27.6 billion, New York State Comptroller Thomas DiNapoli said in a Thursday report. The sum nearly surpassed the industry's entire 2019 profit, and was mainly driven by increased trading and underwriting activity. Near-zero interest rates also aided firms, according to the report.
The government's policy response to the coronavirus spurred the highest average daily volume on the New York Stock Exchange since 2008, DiNapoli said. Commission and trading income leaped 22% for NYSE member firms to a first-half total of $28.8 billion.
Underwriting revenues totaled $10.7 billion in the second quarter, the strongest quarterly performance on record and up 40% from the year-ago period. In all, first-half underwriting revenues reached $17.3 billion.
New York City hasn't since April updated its revenue forecast, which calls for a $6.4 billion loss this year. The first-half performance suggests the securities industry "will be markedly profitable for the year, barring any further unforeseen events," DiNapoli said.
The comptroller joined the many calls for fresh fiscal stimulus, saying that "Wall Street's growth can only be sustained if there is a broad economic recovery." The securities industry's profits provided "an outsized source of revenue" for the state and city governments, DiNapoli said in a statement. Yet Wall Street's gains can't permanently offset the economist damage lingering on Main Street, he added.
Wall Street largely agrees. Bank executives repeatedly urged Congress to pass new stimulus in recent earnings calls. Fresh aid "would move us further" in the economic recovery, Bank of America CEO Brian Moynihan said.
"We'll probably see delinquencies tick up" if businesses continue without new fiscal support, JPMorgan Chief Financial Officer Jennifer Piepszak said.
House Speaker Nancy Pelosi said Thursday that Democrats and the White House are "just about there" on reaching a stimulus compromise. Still, with the election looming and Senate Republicans opposing the measure's size, hurdles to passing new aid remain.