Morgan Stanley, Bank of America Beat Earnings on Investment Banking and Trading Rebound

Morgan Stanley and Bank of America beat Q1 earnings expectations, surpassing estimates for revenue and adjusted EPS.

The overarching theme is a "resurgence in capital markets" with investment banking, wealth management, and trading doing much better.

Lending businesses and net interest income have "faced some struggles" with anemic loan growth.

The capital markets upturn should be durable with a strong pipeline for advisory revenues as announced deals close later this year.

There is pent-up IPO demand after 2 years of sluggish activity, aided by near record market valuations.