(New York)

After years trailing behind its biggest rival, Morgan Stanley’s stock did something it hasn’t for years yesterday—it overtook Goldman Sachs in market cap. After a stock gain yesterday, combined with a GS fall, Morgan Stanley’s valuation is now $86.40 bn, ahead of Goldman’s $85.88. The bank’s fixed income division has been surging of late, boosting sentiment amongst investors. Goldman’s FICC division has been headed in the exact opposite direction, with a steep fall in their most recent quarterly earnings.

FINSUM: James Gorman has done a great job steering Morgan Stanley and boosting their ROI. We like the overall direction of the bank.

(New York)

Bloomberg thinks it is time for markets to accept reality. Despite a lot of effort, the president has overpromised and under delivered when it comes to repealing Obamacare, tax cuts, and infrastructure spending, and at some point soon the market is going to react to that, says Bloomberg. The failure over the Obamacare repeal is not a big deal for markets, but it does signal that Trump will likely not be successful in his other efforts, a troubling realization for investors. This may mean that markets react with stocks moving lower as current valuations cannot be justified, and that yields also move downward as the Treasury would need much less debt than has been anticipated.

FINSUM: The fissure of the Republican party has already been laid bare, so we do not think markets are suddenly going to react. We think a lack of action on taxes and infrastructure are already priced in.

(San Francisco)

The IPO and subsequent few months of trading of SNAP has been an unmitigated disaster, says one analyst. MoffettNathanson analyst Michael Nathanson thinks that SNAP is still overpriced by more than 25% and will fall to just $11 per share, way below its IPO price. The stock has not performed well since its debut, and even Morgan Stanley, its lead underwriter who presumably knows it best, has given up on it, drastically lowering their price target. The competitive environment for advertising is proving difficult for SNAP and it is seeing a seasonable slump in its core business. It also only lasted nine quarters without a slowdown in growth, a short time compared to rivals.

FINSUM: Snap is facing some headwinds, but if it can turn itself around and prove wrong its critics, there are a lot of gains to be had. One thing to worry about is the end of the lockup period for insiders, which is coming soon and could send the stock sharply lower.

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