There's no way to whip up a rosy narrative around the banking sector right now, between uncertainty they face internally ranging from FICC trading to plummeting M&A revenues, and external pressures like mounting loan losses. Morgan Stanley stock is down 25%, and tracing the market's losses after its April 15 earnings report, but there may be some silver linings in the bank's alternative data - as well as that coming from its transformative M&A deal.
As other big banks - particularly consumer banks - pare down job postings, Morgan Stanley (NYSE:MS) has only reduced job postings by roughly 6.5%. It's bigger competitor, Goldman Sachs, is cutting far. more job postings, an interesting contrast between the two white-shoe Wall Street powerhouses.
There's the argument to be made, that Morgan Stanley's March decision to gobble up online trading behemoth E*Trade in an $11 billion deal, could have been timed slightly better from a market perspective. But, on the other hand, it was an all-stock deal, so Morgan Stanley's cost has been adjusted down by the market. The chart above tracks E*Trade Apple ($AAPL) Store ratings, which have grown to 111,000 - far more than any Morgan Stanley digital product has earned, illustrating the scale of the digital deal.
On top of that, Morgan Stanley's digital upstart Robinhood picked the worst possible times to suffer trading network outages, which resulted first in a flood of new followers (few of them, happy) and then app store downgrades from cheesed-off day-traders who missed major upside during the app's nap. These may all be reasons why James Gorman is out, in spite of the crisis, talking up the M&A deal.
There's no shortage of legacy banks looking to make waves in app stores, and because many consumer banks have to hold off on hiring, stealthy competitors like Goldman and Morgan Stanley have a short-term opportunity where they can make inroads to new lines of business, for which they were very recently at a disadvantage.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
Further Reading:
- JPMorgan Chase job postings tumble as Wall Street braces for recession
- Bank of America job postings fall and app engagement rises before earnings
- Goldman Sachs' Marcus app should terrify consumer banks and digital disruptors
