2020 has been a tough year for investors to figure out. Just when things looked great, the COVID-19 pandemic came out of nowhere to crush the global economy. Then, when things seemed as dire as could be, markets rebounded just as sharply. Thursday's stock market moves showed the resiliency that investors have, as an early plunge gave way to a steady recovery throughout much of the session. By late afternoon, the Dow Jones Industrials (^DJI -0.77%) and the S&P 500 (^GSPC -1.11%) had largely regained their lost ground, while the Nasdaq Composite (^IXIC -1.49%) finished well off its lows.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
(0.07%) |
(20) |
|
S&P 500 |
(0.15%) |
(5) |
|
Nasdaq Composite |
(0.47%) |
(55) |
Data source: Yahoo! Finance.
Today's moves by the major benchmarks suggest that people are concerned with the health of the market. But when you look at the latest results from financial giants Morgan Stanley (MS -0.99%) and Charles Schwab (SCHW -0.41%), you get a much different picture. Let's take a closer look.
Morgan Stanley has a solid summer
Shares of Morgan Stanley finished higher by more than 1% on Thursday. The banking giant reported its third-quarter results, and investors were generally pleased with what they saw.
Image source: Getty Images.
Morgan Stanley saw significant growth in key financial metrics. Net revenue climbed 16% to $11.7 billion, while net income was higher by 25% compared to year-earlier levels. The company saw revenue gains across the board, with the biggest rise coming from its investment management unit. However, institutional securities and wealth management also performed well for Morgan Stanley.
In particular, Morgan Stanley pointed to solid gains in equity sales and trading revenue, along with a busier slate of investment banking business. Assets under management for both the wealth management and investment management arms were significantly higher as well.
Judging from the numbers, Morgan Stanley is benefiting from healthy financial markets. With many investors more confused than ever, the market for professional investment advice is hot right now, and Morgan Stanley appears to be cashing in.
Schwab's client assets soar
Elsewhere in the financial industry, Charles Schwab saw its stock rise more than 5%. The discount brokerage pioneer reported third-quarter earnings that gave investors a positive surprise.
At first glance, Schwab's numbers didn't look anywhere near as good as Morgan Stanley's. Year-over-year revenue was down 10% for the quarter, and net income took a 22% hit on an adjusted basis. Yet both numbers were better than most investors had expected.
More importantly, Schwab investors seem to have confidence in the staying power of the stock market. Net new assets amounted to $42.7 billion during the third quarter, including a record $20 billion in new assets in September. The fact that ordinary investors put money into the market during what was a very volatile month shows unusual amounts of confidence.
Schwab now has $4.4 trillion in client assets, up 17% year over year. Coming on the heels of the fastest bear market in history, that's a testament to the resiliency of the U.S. stock market and the investors who call it home. That's no guarantee the stock market won't suffer more setbacks in the future, but it's good to see ordinary investors learn to avoid some of the tricks that have taken away potential gains from them in the past.
