Increased trading activity has helped the broker dealers exchange traded fund outperform the broader financial sector.
The iShares US Broker-Dealers & Securities Exchanges ETF (NYSEArca: IAI) increased 9.5% over the past three months while the S&P 500 Financial Sector rose 2.0%.
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The ongoing earnings season has revealed rising trading activity among big Wall Street banks, potentially signalling a end to a multi-year slump in fixed-income activity. Last week, Citigroup (NYSE: C) announced fixed-income revenue surged 35% to $3.47 billion in the third quarter and J.P. Morgan & Chase (NYSE: JPM) posted $4.33 billion from the business, Bloomberg reported.
“It was a situation where we were firing on all cylinders,” Marianne Lake, JPMorgan’s chief financial officer, said. “There were a number of catalysts in the market, not just Brexit, but also central-bank actions, money-market reforms, and we had good conditions to monetize the flow and clients motivated to act.”
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On Monday, Bank of America (NYSE: BAC) revealed its best third quarter for fixed-income trading in five years after a 39% jump in the business driven by rates trading and benefits from debt-underwriting, reports Laura J Keller for Bloomberg.