Retail Investors' Bullish Sentiment Fuels Rally In Brokerage Stocks: Standout Performers Of Q2 Earnings Season

Major U.S. brokerage firms are currently experiencing a favorable market momentum, bolstered by a spectacular rally in U.S. stocks and a strong risk appetite among small investors.

According to the latest survey by the American Association of Individual Investors (AAII), bullish sentiment has remained above its historical average of 37.5% for the sixth consecutive week, marking the longest positive streak since June and July 2021.

On Tuesday, the iShares U.S. Broker-Dealer & Securities Exchange ETF IAI, the largest exchange traded fund tracking financial stocks involved in the business of broker-dealing and securities exchanges, rose 3.6% on the day, marking the strongest session since November 2022.

The recent quarterly results reported by companies in the capital market industry have shown growth and positive prospects from the trading business.

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How Did Major U.S. Brokerage Firms Report In Q2?

• Charles Schwab Corp. SCHW: Q2 earnings per share of $0.75 beat expectations by 6%, with quarterly revenues at $4.66 billion, exceeding the expected $4.1 billion. The company gathered $52 billion in core net new assets during the quarter, $180 billion since the start of the year, attracting almost 1 million new brokerage accounts. Shares surged 15% after Q2 results.
  
• Morgan Stanley‘s MS E*TRADE: Q2 earnings of $1.24 per share and revenues of $13.5 billion both outperformed estimates. Wealth and Investment Management added $100 billion in net new assets. Trading revenues reached $3.8 billion, up 6% from the previous year. Shares rose 8% after Q2 results.

• Interactive Brokers Group, Inc. IBKR: IBKR missed both profits and revenues expectations in Q2, reporting EPS of $1.32 and revenues of $1 billion. Customer accounts increased 19% YoY to 2.29 million, and customer equity grew 24% to $365.0 billion. Shares fell 1.5% after Q2 results.

Who Has Yet To Report?

The brokerage firms that are yet to report their Q2 earnings are:

1. Raymond James Financial, Inc. RJF – Reporting on July 26 with expected EPS of $2.14 and revenues of $2.91 billion.
2. LPL Financial Holdings Inc. LPLA – Reporting on July 27 with expected EPS of $3.86 and revenues of $2.44 billion.
3. Tradeweb Markets Inc. TW – Reporting on July 27 with expected EPS of $0.50 and revenues of $309 million.
4. Robinhood Markets, Inc. HOOD – Reporting on Aug. 2 with an expected EPS of $-0.014 and revenues of $471 million.

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