Morgan Stanley (NYSE:MS) has benefited from red-hot IPO and SPAC markets over the past couple of months, which has offset the negative impact of low interest rates on its revenues. However, because the market is expected to witness a correction in the near term, will MS’ stock be able to maintain its upward trajectory? Read more to find out.Morgan Stanley (MS) is one of the largest financial institutions in the world, with approximately $1.52 trillion of assets under management (as of June 30). Shares of MS have gained 87% over the past year and 38% year-to-date.
However, MS has witnessed a significant decline in its interest income since last year, owing largely to continued dovish monetary policy. Though the Fed forecasts two interest rate hikes in 2023, the current deceleration in economic growth due to concerns over the spread of the COVID-19 Delta variant might push that timeline back further.
Furthermore, recent concerns regarding a potential market correction coupled with a rising crackdown by China on ADRs of Chinese companies are expected to reduce the number of IPOs and SPAC deals in the near term. Consequently, MS’ revenues from its investment banking segment are expected to decline.