Morgan Stanley (NYSE: MS) became the latest big bank to trounce analysts' estimates. It posted earnings of 99 cents a share for the first quarter, including earnings from discontinued operations. Analysts on average expected just 57 cents a share. So this qualifies as yet another massive upside surprise, which, I repeat, is not making the analysts look good.

But shareholders are certainly happy. Like other top banks, fixed-income trading was a big driver. Revenue from debt and currency trading more than doubled from a year ago to $2.7 billion in the quarter. CNN notes that the six biggest bank holding companies--Bank of America (NYSE: BAC), JPMorgan Chase (NYSE: JPM), Citigroup (NYSE: C), Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS) and Morgan Stanley raked in $18.7 billion in profits in the first quarter--more than six times as much as they earned in the fourth quarter of 2009 "and their biggest haul since the financial crisis of 2008."

While there are some favorable trends, the big driver of this is the trading of fixed income products and you have to wonder how long this will last. Unfortunately, the good earnings news has been overshadowed by the uncertainty surrounding the SEC's (SEC news)complaint against Goldman Sachs. The stocks of the top nine banks have really tanked.  

For more:
- here's a CNN article

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