Wall Street profits climb 80% in the first half of 2024 compared with last year, report says
The Wall Street bulls have been on a tear.
The pre-tax profits of securities firms in New York City rose nearly 80% in the first half of this year compared with the same period in 2023, state Comptroller Thomas P. DiNapoli reported on Wednesday.
Profits for the January-June period totaled $23.2 billion and may end the year as high as $47.1 billion. They totaled $26.3 billion last year, according to a 14-page report from his office.
"The fact that the [national] employment numbers are still strong, and the interest rate cut will have a favorable impact on economic activity augurs well for there being a very strong end-of-year number in terms of profits," DiNapoli said in an interview.
The profits of broker/dealer firms help to determine the year-end bonuses paid to their employees, nearly 12,000 of whom commute from Long Island. Spending by bonus recipients is a key driver of Nassau County's economy and East End real estate.
In addition, taxes on those bonuses represent 19% of the state's total tax collections, or $19.4 billion in the fiscal year ended March 30, said DiNapoli, of Great Neck Plaza.
"Wall Street makes a very significant contribution to state revenue that benefits all New Yorkers [by helping to fund] programs for education, health care and other needs," he said.
News of the higher profits being reaped by securities firms can bolster the confidence of investors because it's an indication of the strong performance of stocks, according to economists.
"Wall Street doing well means the stock market has done well, and that means 401(k)s are doing well," said John A. Rizzo, an economist and Stony Brook University professor, referring to retirement savings accounts. "That's important to a lot of workers. It also has a psychological impact because [people] feel wealthier, they feel more confident."
The pre-tax profit data released on Wednesday covers 131 stock brokerages that are members of the New York Stock Exchange. The profits are derived from supervisory fees, securities trading and underwriting.
The securities industry throughout the city employed 198,500 people last year, the most since 2000. About 6% of those workers were Long Islanders, while 16% came from New Jersey, 4% from Westchester County and 3% from Connecticut, according to the comptroller's report.
The city accounted for nearly 90% of the 214,900 securities jobs in the state — and New York remains the industry’s capital.
But DiNapoli said California, Texas, Florida, Illinois and other rivals are all adding jobs. New York is home to 17.4% of the industry’s jobs, down from one third in 1990.
"There are other states in the country that are growing these jobs more so than we are," he told Newsday. "My hope is that at a minimum, we’re going to retain the jobs that we have."
In terms of 2023 salaries, securities firms in Suffolk County paid their employees an average of $539,300, or the second highest in the country after four employees in Madison County, Montana, who earned an average of $835,920.
Islandwide, industry salaries were $376,710, on average, and in New York City, $471,370, based on the report.
Pay in the city dropped last year compared with 2022 due to smaller bonuses, and in Suffolk, due to the performance of Renaissance Technologies and other hedge funds based in the county, the report shows.
Still, DiNapoli said pay in the securities industry far outpaced all other industries. For example, securities employees in New York City earned nearly five times as much as the $98,700 paid in the rest of the private sector last year, on average.
"Forty-one percent of the Long Islanders who work in the securities industry [in the city] earned more than $250,000," he said. "That’s a generous income to have to spend on Long Island — and it supports the local economy."
The Wall Street bulls have been on a tear.
The pre-tax profits of securities firms in New York City rose nearly 80% in the first half of this year compared with the same period in 2023, state Comptroller Thomas P. DiNapoli reported on Wednesday.
Profits for the January-June period totaled $23.2 billion and may end the year as high as $47.1 billion. They totaled $26.3 billion last year, according to a 14-page report from his office.
"The fact that the [national] employment numbers are still strong, and the interest rate cut will have a favorable impact on economic activity augurs well for there being a very strong end-of-year number in terms of profits," DiNapoli said in an interview.
The profits of broker/dealer firms help to determine the year-end bonuses paid to their employees, nearly 12,000 of whom commute from Long Island. Spending by bonus recipients is a key driver of Nassau County's economy and East End real estate.
In addition, taxes on those bonuses represent 19% of the state's total tax collections, or $19.4 billion in the fiscal year ended March 30, said DiNapoli, of Great Neck Plaza.
"Wall Street makes a very significant contribution to state revenue that benefits all New Yorkers [by helping to fund] programs for education, health care and other needs," he said.
News of the higher profits being reaped by securities firms can bolster the confidence of investors because it's an indication of the strong performance of stocks, according to economists.
"Wall Street doing well means the stock market has done well, and that means 401(k)s are doing well," said John A. Rizzo, an economist and Stony Brook University professor, referring to retirement savings accounts. "That's important to a lot of workers. It also has a psychological impact because [people] feel wealthier, they feel more confident."
The pre-tax profit data released on Wednesday covers 131 stock brokerages that are members of the New York Stock Exchange. The profits are derived from supervisory fees, securities trading and underwriting.
The securities industry throughout the city employed 198,500 people last year, the most since 2000. About 6% of those workers were Long Islanders, while 16% came from New Jersey, 4% from Westchester County and 3% from Connecticut, according to the comptroller's report.
The city accounted for nearly 90% of the 214,900 securities jobs in the state — and New York remains the industry’s capital.
But DiNapoli said California, Texas, Florida, Illinois and other rivals are all adding jobs. New York is home to 17.4% of the industry’s jobs, down from one third in 1990.
"There are other states in the country that are growing these jobs more so than we are," he told Newsday. "My hope is that at a minimum, we’re going to retain the jobs that we have."
In terms of 2023 salaries, securities firms in Suffolk County paid their employees an average of $539,300, or the second highest in the country after four employees in Madison County, Montana, who earned an average of $835,920.
Islandwide, industry salaries were $376,710, on average, and in New York City, $471,370, based on the report.
Pay in the city dropped last year compared with 2022 due to smaller bonuses, and in Suffolk, due to the performance of Renaissance Technologies and other hedge funds based in the county, the report shows.
Still, DiNapoli said pay in the securities industry far outpaced all other industries. For example, securities employees in New York City earned nearly five times as much as the $98,700 paid in the rest of the private sector last year, on average.
"Forty-one percent of the Long Islanders who work in the securities industry [in the city] earned more than $250,000," he said. "That’s a generous income to have to spend on Long Island — and it supports the local economy."
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
