A definitive breakdown of the gloomy state of Wall Street

Wall street trader sadSpencer Platt/Getty ImagesA man outside the New York Stock Exchange on January 15 in New York City.

Don’t be fooled by the third quarter rebound in Wall Street trading revenues. Investment banks are still on course for a lousy year.

While third-quarter revenues were up 14% from the year-ago period, according to new data from Coalition, year-to-date performance was down 7%, and full year 2016 revenues are expected to decrease for the fourth year in a row.

One bright spot is fixed income, currencies, and commodities revenues, which were up 36% in the third quarter, 2% year-to-date, and are expected to be up 5% total by the end of the year.

Have a look:

Total revenue numbers aren't all that bad for the third quarter. While equities revenues fell 11% from the year-ago quarter, banking revenues were up 7% and fixed income, currencies, and commodities, or FICC, revenues were up 36%. Full-year performance is still expected to decline 5%, however.


Within FICC, the strong third-quarter recovery was driven by credit-linked products. G10 rates also saw continued strength, according to Coalition. Meanwhile, G10 FX, EM Macro, Securitization, and Commodities all underperformed.


Equities continued to underperform in the third quarter. Derivatives and Cash continued to be weak, while prime services declined for the first time since 2010, according to Coalition. Futures and options revenues were supported by outperformance from Americas fixed income futures.


Investment banking revenues declined sharply thanks largely to a drop in equity capital markets revenues. M&A was also down, while debt capital markets' decline, driven by decreasing loan issuance, was offset slightly by strong investment grade issuance volumes.


Headcount was also down year-over-year for the first nine months of the year. FICC headcount declined 8% and equities headcount dropped 4%, while investment banking headcount remained flat.


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