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Morgan Stanley overtakes arch-rival Goldman Sachs in equities trading

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Morgan Stanley overtakes arch-rival Goldman Sachs in equities trading

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Morgan Stanley overtook arch-rival Goldman Sachs in equities trading in the third quarter for the first time since 2022, helping the investment bank’s profits jump by almost half.

Morgan Stanley said on Wednesday that net income for the three months to the end of September was $4.6bn, more than $1bn better than analysts had expected.

The core Wall Street businesses of investment banking and trading have powered forecast-beating results across America’s biggest banks.

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Goldman, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo have all surpassed expectations in the past two days on the strength of their investment banks.

In equities trading, Morgan Stanley generated revenues of $4.1bn, up 35 per cent from a year ago and ahead of the $3.7bn reported by Goldman on Tuesday.

Equities trading has been a key point of rivalry between the two investment banks, and this quarter marked the first time that Morgan Stanley had out-earned Goldman in the business since the final quarter of 2022. 

Morgan Stanley was traditionally the dominant force on Wall Street in stock trading.

But it ceded that position to Goldman after it sustained heavy losses tied to investment firm Archegos Capital Management, and it has made a concerted effort to regain its top position under chief executive Ted Pick, who took over from James Gorman at the start of 2024. 

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“We’re trying to create a more durable business,” Morgan Stanley chief financial officer Sharon Yeshaya told the Financial Times.

“Part of that comes from the lending and the prime brokerage business associated with equities. And some of it comes from the relationships that we continue to build on the corporate side.”

Investment banking generated $2.1bn in revenues, a 44 per cent improvement on the same quarter last year, which was in line with Goldman.

Goldman reported a 43 per cent increase in investment banking revenues to $2.7bn on Tuesday, while JPMorgan could only manage more modest gains of 16 per cent to $2.6bn and Citigroup reported a 17 per cent rise to $1.2bn.

Yeshaya said the bank was at “record levels when you look at the pipeline and the backlog” of potential deals.

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Morgan Stanley’s wealth management business also performed far better than expected, drawing in net new assets of $81bn in the quarter compared with the $67bn investors were looking for.

The figure is followed closely by investors as a gauge of the business’s growth trajectory, with Morgan Stanley’s revenues split relatively evenly between its investment bank and wealth management divisions.

Morgan Stanley’s earnings came on the same day as Bank of America, which also trounced expectations for its investment bank. BofA reported a 43 per cent rise in investment banking fees to just over $2bn. Analysts had only expected the business to bring in $1.6bn.

BofA also reported an 11 per cent rise in revenues in its markets division to $6.2bn, helping lift the bank’s profits by almost a quarter from a year ago to $8.5bn.

Morgan Stanley and BofA shares were both up more than 4 per cent in pre-market trading.

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This article has been updated since publication to correct the revenue in BofA’s markets division.

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How Each House Member Voted on the Iran War Powers Resolution

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How Each House Member Voted on the Iran War Powers Resolution

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Measure passed with 215 “yes” votes to 208 “no” votes.
Vote Total Democrats Republicans Bar chart of total votes
215 211 4
208 0 208

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Note: Representative Kevin Kiley of California is an independent who caucuses with the Republicans.

The House on Wednesday passed a measure to direct President Trump withdraw U.S. forces from Iran or win congressional approval to continue military operations there. The vote was the fourth of its kind in the chamber since the war began, the previous three having failed.

A vote on this measure was originally scheduled for last month but was pulled by House Republican leaders after it became clear they lacked the votes at the time to defeat it because of several members’ absences. Several Republicans were also absent on Wednesday, but party leaders were unable to delay the vote any longer.

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Votes fell mostly along party lines, with the exception of four Republicans, who voted with Democrats to pass the measure. Representative Jared Golden, Democrat of Maine, who had previously voted with Republicans, flipped and voted with his party.

Republicans who voted against their party

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The House vote came after four Senate Republicans last month broke from their party to advance a measure to assert the legislature’s role in authorizing the war. The Senate had rejected seven other similar measures, but Republicans in both chambers have expressed increased uneasiness with the conflict as it wears on.

Even if a war powers resolution passed in both the House and Senate, it would be subject to an all-but-certain veto by Mr. Trump, which would need a two-thirds majority in both chambers to override. Beyond that, the president and his senior aides have frequently dismissed efforts by Congress to rein in his war powers, saying they are unconstitutional.

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How Every Member Voted

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House votes to rein in Trump on Iran as war loses GOP support

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House votes to rein in Trump on Iran as war loses GOP support

Washington — The House on Wednesday passed a measure that would force President Trump to end the war with Iran without congressional authorization, marking the first time the lower chamber has defied the White House on the conflict. 

The House voted 215 to 208 to approve the war powers resolution with the help of four Republicans. Democratic Rep. Jared Golden of Maine, who has voted against the three previous failed attempts, also dropped his opposition and voted for the measure, giving his party unanimity on the issue.

Republican Reps. Thomas Massie of Kentucky, Brian Fitzpatrick of Pennsylvania, Tom Barrett of Michigan and Warren Davidson of Ohio voted with Democrats in favor of the measure.

Democrats in the chamber erupted in applause after passage.

The vote was supposed to take place before lawmakers left for the Memorial Day recess, but House GOP leaders abruptly pulled the vote when it became clear they did not have the numbers to block it. Several Republicans were absent and others were expected to support it. 

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The Senate advanced a similar measure in May to rein in Mr. Trump on Iran after four Republicans joined all but one Democrat to push it forward. Three Republican absences also helped deliver the breakthrough after seven previous unsuccessful votes. 

But the Senate’s procedural vote was just the first step on the way to potential passage, and Republicans will have another opportunity to block it in the coming days.

It’s unclear when they plan to vote on the House version. In a statement, House Democratic leaders called on Senate Republicans “to do the right thing.” 

Support for the war from some Republicans waned after the conflict passed a statutory 60-day deadline under the War Powers Resolution of 1973, which says the president must remove armed forces from hostilities if Congress has not authorized the war. The war passed the deadline on May 1, but the administration has argued that a fragile ceasefire stopped the clock in early April, though both sides have carried out attacks since then.

The Trump administration has also argued the War Powers Resolution of 1973 is unconstitutional, though that theory has never been tested in court.

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Republicans who have voted in favor of limiting Mr. Trump’s military powers in Iran have been uncomfortable with the lack of congressional authorization on the war and a strategy to end it. Some fear the war’s unpopularity and the economic fallout could harm the GOP’s chances at keeping control of Congress after the midterm elections in November. 

GOP Rep. Ashley Hinson of Iowa, who is running for Senate, said in a private exchange at a campaign stop last week that the war could be a “political liability” if it continues beyond “the next couple of weeks,” according to audio obtained by CBS News. 

But Mr. Trump said last month he was in “no hurry” to make a deal with Iran ahead of the midterms. 

“Everybody’s saying, ‘Oh, the midterms, I’m in a hurry.’ I’m in no hurry,” he said. 

The resolution approved Wednesday was introduced in April by Rep. Gregory Meeks of New York, the top Democrat on the House Foreign Affairs Committee. It directs the president “to remove United States Armed Forces from hostilities with Iran,” unless Congress declares war or authorizes the use of military force. 

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Rep. Brian Mast of Florida, the Republican chairman of the House Foreign Affairs Committee, earlier Wednesday called it a “stupid political vote” that “weakens the president’s hands as he’s negotiating with Iran.” 

After the vote, Meeks brushed off the assertion that the war powers votes have undercut the president during negotiations with Iran. When asked whether Democrats would keep forcing votes to end the Iran war, Meeks told reporters, “You can expect us to continue to do our jobs.” 

“We’re going to continue to do our constitutional responsibilities,” he said. 

Fitzpatrick, who also voted in favor of a war powers resolution in May, said, “The law is the law.” 

“We have to follow the law. There’s a law on the books,” Fitzpatrick said. “So you have two choices: You either follow the law or you change the law. You can’t violate the law. That’s not an option.” 

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During floor debate on the measure on May 20, Democrats questioned why Republicans haven’t held a vote on an authorization for military force to provide Mr. Trump with legal guardrails for attacking Iran. 

“If my Republican colleagues believe this is justified, they should bring an AUMF to the floor,” Meeks said.

There’s been little momentum so far behind an AUMF introduced by Barrett earlier in May. 

Rep. Kevin Kiley of California, an independent who caucuses with Republicans, argued there are “better tools” for Congress to assert its authority. 

“We actually have the ability to provide direction as to how funds should be used,” Kiley said, referring to Congress’ power of the purse. “I understand why people want to use whatever tools are available, but I believe that Congress should use those tools of congressional oversight and the powers we have under Article I that really have teeth here.” 

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Map: 5.1-Magnitude Earthquake Strikes off the Coast of California

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Map: 5.1-Magnitude Earthquake Strikes off the Coast of California

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Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

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A moderately strong, 5.1-magnitude earthquake struck in the North Pacific Ocean on Wednesday, according to the United States Geological Survey.

The temblor happened at 5:45 a.m. Pacific time about 40 miles west of Petrolia, Calif., data from the agency shows.

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As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

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Aftershocks detected

Subsequent quakes have been reported in the same area. Such temblors are typically aftershocks caused by minor adjustments along the portion of a fault that slipped at the time of the initial earthquake.

Quakes and aftershocks within 100 miles

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Aftershocks can occur days, weeks or even years after the first earthquake. These events can be of equal or larger magnitude to the initial earthquake, and they can continue to affect already damaged locations.

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When quakes and aftershocks occurred

 All times are Pacific time. The New York Times

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Sources: United States Geological Survey (epicenter, aftershocks, shake intensity); LandScan via Oak Ridge National Laboratory (population density) | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Wednesday, June 3 at 6:03 a.m. Pacific time. Aftershocks data is as of Wednesday, June 3 at 8:01 a.m. Pacific time.

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