The anticipation around Macquarie Group (MQG) has been palpable all year. But this week's trading update has left many investors wondering whether the rally in the group has been overdone.
The prospect of a recovery in America and Europe – the two areas in which it prematurely took the post crisis plunge as it re-oriented its business and cut loose its satellite infrastructure businesses – has driven the share price relentlessly higher.
Even after Ben Bernanke sent equity investors scurrying for the exits with his May antics, Macquarie only relinquished a portion of the gains it had piled on earlier in the year and within eight weeks had recovered all its lost ground.
From $36 in March, the investment bank topped $50 last week, a little above the half-way mark the group reached before the global financial crisis sparked a run on the company.
The outlook statement this week foreshadowed flat earnings in the first half compared with last year's second half, a result that, while largely expected, may have disappointed some investors who were hoping for something more optimistic.
Described by some as a reality check for a stock that has run too hard in anticipation of an uptick in capital market activity, Macquarie has endured only modest falls since the outlook statement. And that has been against the backdrop of slow trading and an easing in the general market.
Macquarie shares slipped a further 0.4% to $48.87 this morning.
The second half certainly looks stronger, prompting some analysts finally to forecast an end to the downgrade cycle that has afflicted the group, paving the way for what may be almost a return to the glory days.
It has been a long, hard slog for Macquarie since the crisis days of 2008 when its stock price slumped to $15. And much remains to be done.
Its cyclical businesses have yet to put solid runs on the board and the group continues to scale back its investment banking and equities operations, the very businesses that made the group's name in the early part of the century (see Karl Siegling's Working Macquarie's human capital higher).
As ever, Macquarie remains a constantly evolving beast.