Perrin Long, a veteran securities industry analyst, and private consultant to investment firms, said: "The results for most of the companies have been very favourable compared to results ending June 1995."
However, he warned that the first half could be followed by a gloomier final six months of the year. First-half results were boosted by a booming stock market as more than $115bnpoured into equity mutual funds, and US corporates embarked on a mergers and acquisitions frenzy.
"The primary strength was in equity underwriting, and mergers and acquisitions activity, which made up for a pull-back in fixed income underwriting," said Sally Krawcheck, securities industry analyst at Sanford C Bernstein in New York.
However, analysts also argue that the stock market correction in the first weeks of July radically changed the equity underwriting picture. "With the stock market so volatile, along with the uncertainty about interest rates, I feel that the [equity] underwriting pipeline has gone for the moment. We could see significant drops in quarter-on-quarter earnings. If the stock market calms down, we may see strong earnings in the second half, " Ms Krawcheck said.
If the market stabilises, Wall Street could see a record full-year, pre-tax earnings level of $9.5bn in 1996, according to forecasts by Perrin Long.Reuse content