GS - The Goldman Sachs Group, Inc.

NYSE - NYSE Delayed price. Currency in USD
249.46
-0.26 (-0.10%)
At close: 4:00PM EST
Stock chart is not supported by your current browser
Previous close249.72
Open250.23
Bid248.46 x 4000
Ask249.45 x 900
Day's range248.00 - 250.46
52-week range180.73 - 250.46
Volume2,917,172
Avg. volume2,379,712
Market cap88.331B
Beta (5Y monthly)1.37
PE ratio (TTM)11.86
EPS (TTM)21.03
Earnings date12 Apr 2020 - 16 Apr 2020
Forward dividend & yield5.00 (2.00%)
Ex-dividend date27 Nov 2019
1y target est262.48
  • Strong bank earnings boosted by the American consumer — and heavy buybacks
    Yahoo Finance

    Strong bank earnings boosted by the American consumer — and heavy buybacks

    The big U.S. banks reported earnings for the fourth-quarter of 2019, seeing decent top-line growth as a result of a strong U.S. consumer. But the bottom line earnings were helped by share buybacks.

  • The Goldman Sachs Group, Inc. Yearly Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
    Simply Wall St.

    The Goldman Sachs Group, Inc. Yearly Results Just Came Out: Here's What Analysts Are Forecasting For Next Year

    Investors in The Goldman Sachs Group, Inc. (NYSE:GS) had a good week, as its shares rose 3.0% to close at US$249...

  • Top STock Analyst Reports for Microsoft, American Express & Others
    Zacks

    Top STock Analyst Reports for Microsoft, American Express & Others

    Top STock Analyst Reports for Microsoft, American Express & Others

  • Bloomberg

    U.S. Firms Could Win Lucrative Job of Cleaning Up China's Bad Debt

    (Bloomberg) -- One surprising part of the trade deal struck between U.S. President Donald Trump and Beijing is that U.S. investors won a direct shot at the potentially lucrative job of helping China clean up its heap of bad debt.China is embracing foreign capital as it grapples with a tide of soured debt. Some estimate it to have topped $1 trillion as the trade war weighed on economic growth and a long crackdown on shadow banking choked off liquidity.The Communist Party-ruled nation is trying to instill more discipline in the market as corporate defaults have hit records for two straight years and its vast regional banking network struggles to cope. Growing participation by foreign investors could relieve pressure on the mainly state-owned firms that so far have been the front-line in dealing with the bad debt problem. It could also result in a more market-driven pricing of soured borrowings.U.S. firms including Oaktree Capital Group and Bain Capital Credit have already been pushing into one of the world’s biggest distressed debt market. The trade deal will allow financial services companies from the U.S. to apply for licenses to buy non-performing loans, or NPLs, directly from banks, cutting out the middle man they have to go through now.“China’s NPL market is large and growing, and opportunities for deeply discounted investments are enticing foreign firms with NPL experience in other markets,” said Brock Silvers, managing director at Adamas Asset Management in Hong Kong.Gaining access is one thing, but succeeding is another. Top-down run China can be an arbitrary place to do business, and local knowledge and contacts are required in the 1.4 billion person nation. Foreign firms have often grappled with unpredictable courts, fraud and challenges of sourcing bad loans. A web of local enterprises are often closely connected to regional banks and the local government, making it hard to navigate.The market has grown significantly in recent years. But lack of experience has been an obstacle and many firms that stuck their toe in eventually pulled back because of difficulties in working out bad loans in China’s system, according to Benjamin Fanger, a managing partner at ShoreVest Partners, a distressed debt firm.“Some foreign investors are still continuing to push forward to try to learn and this new agreement opening to direct deals with banks might add more interest again,” he said. “But doing Chinese NPLs requires a very significant commitment of time and resources to build up local sourcing, underwriting and servicing/exit capability.”The sheer pace in the buildup in soured debt is proving a potent lure. Bad debt held by commercial banks jumped almost 20% in the first nine months of last year to 2.4 trillion yuan, according to the China Banking and Insurance Regulatory Commission.Data shows that overseas purchases of bad loan portfolios nearly tripled in 2018 to 30 billion yuan, Savills has said in a report. Active international players include Oaktree, Loan Star, Goldman Sachs, Bain, PAG and CarVal, according to the real estate and research firm.Savills said the overseas investors typically target loan books as large as $100 million, compared with domestic investors who seek to buy small batches of about $30 million. Targeted returns are usually 12-15%, unleveraged, or 17-22%, with leverage.China’s recent financial tightening has also led to opportunities for some foreign investors since some local investors are struggling to conclude deals, according to Savills.While the trade deal applies to U.S. financial services firms, the government could potentially broaden the scope to include European firms in time, according John Xu, a Shanghai-based partner at Linklaters that advises international funds on buying nonperforming loans.“The challenge is that there is a quota on the licenses per province, so there may not be sufficient licenses in some of the main provinces,” said Xu.ShoreVest Partners wasted no time in moving ahead and is in talks “with several provincial and municipal governments” about the new agreement and what the first steps would be toward obtaining an asset management company license, according to Fanger, a China bad debt veteran who speaks fluent Mandarin.But further steps will be needed to tame the unpredictability of the Chinese market.“If Beijing is to eventually get a handle on China’s over-indebtedness, it will have to allow for a predictable, rule-based nonperforming loan enforcement process,” said Silvers at Adamas in Hong Kong.\--With assistance from Alfred Liu and Emma Dong.To contact Bloomberg News staff for this story: Denise Wee in Hong Kong at dwee10@bloomberg.net;Tongjian Dong in Shanghai at tdong28@bloomberg.netTo contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net, ;Andrew Monahan at amonahan@bloomberg.net, Jonas BergmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Wall Street M&A fees drop by more than $500m in 2019

    Top Wall Street banks suffered a $558m drop in fees from advising on mergers and acquisitions in 2019, as a fall in overall dealmaking and lucrative cross-border transactions ate into their revenues. Bank of America, Citi, Goldman Sachs, JPMorgan Chase and Morgan Stanley generated $10.28bn in advisory revenues last year, down 5 per cent from the $10.84bn they reported the previous year, disclosures this week from the five banks showed.

  • Financial Times

    Bonuses at risk as M&A fees slide

    The drinks are still flowing at Le Bernardin and The Grill in Manhattan, but the bankers spending lavishly there may soon notice that their wallets are not being refilled as rapidly as their glasses. Bonus pools are expected to be lower at some of Wall Street’s top banks after merger and acquisition advisory fees dropped $558m last year, several top dealmakers tell DD.

  • Toshiba Touts Algorithm That’s Faster Than a Supercomputer
    Bloomberg

    Toshiba Touts Algorithm That’s Faster Than a Supercomputer

    (Bloomberg) -- Follow Bloomberg on Telegram for all the investment news and analysis you need.It’s a tantalizing prospect for traders whose success often hinges on microseconds: a desktop PC algorithm that crunches market data faster than today’s most advanced supercomputers.Japan’s Toshiba Corp. says it has the technology to make such rapid-fire calculations a reality -- not quite quantum computing, but perhaps the next best thing. The claim is being met with a mix of intrigue and skepticism at financial firms in Tokyo and around the world.Toshiba’s “Simulated Bifurcation Algorithm” is designed to harness the principles behind quantum computers without requiring the use of such machines, which currently have limited applications and can cost millions of dollars to build and keep near absolute zero temperature. Toshiba says its technology, which may also have uses outside finance, runs on PCs made from off-the-shelf components.“You can just plug it into a server and run it at room temperature,” Kosuke Tatsumura, a senior research scientist at Toshiba’s Computer & Network Systems Laboratory, said in an interview. The Tokyo-based conglomerate, while best known for its consumer electronics and nuclear reactors, has long conducted research into advanced technologies.Toshiba has said it needs a partner to adopt the algorithm for real-world use, and financial firms have taken notice as they grapple for an edge in markets increasingly dominated by machines. Banks, brokerages and asset managers have all been experimenting with quantum computing, although viable applications are generally considered to be some time away.Why Quantum Computers Will Be Super Awesome, Someday: QuickTakeArbitrage OpportunitiesToshiba said its system is capable of calculating arbitrage opportunities for currencies in microseconds. The company has hired financial professionals to work on the project and aims to complete a real-world trial by March 2021.“Finance is the most familiar application,” Toshiba Chief Executive Officer Nobuaki Kurumatani said in an interview. “But there are so many uses. This is a technology with real potential.”Toshiba’s algorithm seems to outperform rival approaches on mathematical benchmarks, but how it will perform on real-world problems is anyone’s guess. Access to the company’s backtesting in currency trading and portfolio optimization isn’t publicly available and adopting the technology to a new problem would likely require rebuilding the algorithm from scratch.“There is a lot of talk about applications of quantum computing in finance, but it’s not very clear where it would be all that necessary,” said Takanobu Mizuta, a fund manager and senior researcher at Sparx Group Co. Optimizing a portfolio is not something that needs to be done in microseconds and calculations involved in high-frequency trading, where speed counts, are not very complicated, Mizuta said.Toshiba may choose to use the algorithm for areas outside finance. Other applications could include things like plotting complex shipping and logistics routes and developing new drugs with molecular precision, according to the company.First IdeaThe idea first arose in 2015, when senior research scientist Hayato Goto was exploring how the qualities of some complex systems can suddenly change with additional input, a phenomenon he describes as bifurcation. But it took him two years, he said, to realize the discovery could be used to craft algorithms that can efficiently sift through a huge number of possibilities -- like a quantum computer without the onerous requirements to run one.Goto partnered with Tatsumura, whose semiconductor expertise was crucial in making the calculations work on multiple processors in parallel.“We will see some ideas for specific applications of quantum computing coming out over the next five years,” said Masayuki Ohzeki, an associate professor at Tohoku University whose research focuses on the technology. “But real implementation will depend on when there is a good match between improvement in performance and techniques that simplify the calculations.”Toshiba revealed its Simulated Bifurcation Algorithm in April, initially garnering little attention outside the scientific community. In October, the company announced that its model had identified potential arbitrage opportunities in currency trading in just 30 microseconds -- fast enough, it claimed, to give it a 90% chance of making profitable trades. That triggered inquiries from financial institutions in Japan and abroad, Toshiba said.Quantum ComputingInvestment banks are already eyeing quantum computing as an opportunity and a threat. Goldman Sachs Group Inc. has been building an in-house research team and late last year joined forces with startup WC Ware to speed up the search for a “quantum advantage.” Japan’s Nomura Holdings Inc. has partnered with Ohzeki’s lab at Tohoku University to explore applications in asset management using a machine made by Canada’s D-Wave Systems Inc.“Right now, what you can do with it is still hypothetical,” said Kazuyuki Takeda, a general manager at Mizuho-DL Financial Technology Co., a research arm of one of Japan’s biggest financial groups. “It will take quite a bit of time before we have practical uses of quantum computing. At least 10 years or so.”Alphabet Inc.’s Google claimed in October that its quantum computer -- built on a custom processor with bespoke cryogenic cooling -- could perform a task in 200 seconds that would take today’s fastest supercomputer 10,000 years. Researchers at IBM have countered, saying that their supercomputer can match Google’s Sycamore processor “in a matter of days.” But that cluster of machines occupies an area the size of two basketball courts inside the Oak Ridge National Laboratory. In either case, the cost of quantum-like computational capability appears to still be prohibitively high for most applications.In the meantime, Toshiba is hoping it will succeed in commercializing its new algorithms -- whether in finance or elsewhere -- by delivering a computational edge with existing technology.“We give ourselves about a one-year lead for the stuff that we release publicly,” Goto said. “The more cutting-edge knowledge we have internally gives us confidence that we won’t be easily caught up with.”(Updates with expert comment and latest developments in quantum computing.)\--With assistance from Michael Patterson.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Grace Huang in Tokyo at xhuang66@bloomberg.net;Shoko Oda in Tokyo at soda13@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad Savov, Tom RedmondFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Will Dow ETFs Continue to Surge as Q4 Earnings Unfold?
    Zacks

    Will Dow ETFs Continue to Surge as Q4 Earnings Unfold?

    With most blue-chip companies' earnings scheduled over the coming weeks and sentiments being mixed, investors should closely monitor the movement of the Dow ETF.

  • Bloomberg

    Morgan Stanley’s 126% Bond-Trading Surge Is Electric

    (Bloomberg Opinion) -- Wall Street’s bond traders deserve a lot of credit for an impressive earnings season for the biggest U.S. banks. After all, fixed-income trading revenue easily blew past analysts’ estimates across the board.But shareholders might want to show some respect to the machines, too.Consider Morgan Stanley, which reported earnings on Thursday that were so impressive that its shares soared 7.6% when the stock market opened, the biggest intraday gain since November 2016. The bank, with a smaller fixed-income, currency and commodities desk than the likes of Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc., posted a whopping 126% increase in FICC trading revenue in the fourth quarter, the biggest of any of the companies reporting this week. Even before Morgan Stanley’s release, Wall Street was looking at the largest surge in fixed-income trading revenue in more than eight years.Now, an important part of the fixed-income trading story is that at this time a year ago, banks were reeling from sharp declines in FICC revenue — Morgan Stanley most of all. So a comeback was hardly unexpected. Still, the fact that bond traders raced past estimates, building upon a third quarter in which they looked like the MVPs of Wall Street, suggests there could be something more sustainable afoot, particularly given that volatility in U.S. Treasuries did nothing but decline in the final three months of 2019 while credit spreads only squeezed tighter.The secret sauce might very well be a continued push toward “electronification” in fixed income. It’s become something of a buzzword for Morgan Stanley’s leadership, though analysts on Thursday’s conference call didn’t bring it up. For example, here’s Chief Executive Officer James Gorman in June:“There's clearly more electronification going on within fixed income. It's becoming a more efficient platform for us. And there's a lot of share moving around the world right now. There's a lot of available share and we've picked up some of that.”And here’s Daniel Simkowitz, head of investment management at Morgan Stanley, at the Bank of America Merrill Lynch Future of Financials Conference in November:“Morgan Stanley is a real leader in electronification. If you go back to the equity markets, we're now applying that into the fixed income trading markets. So we have capabilities here to really help us maybe be a leapfrog player in quant in fixed income.”It’s not just Morgan Stanley, either. Stephen Scherr, chief financial officer at Goldman Sachs, noted in an earnings call a year ago that in fixed income, “there’s an element of platform electronification as a means of which you can drive higher volumes” as bid-offer spreads narrow. And he added that “as we progress the initiative to build out those platforms, we’ll realize greater margin.” Overall, electronification in bond trading is going to be a “big story we’re going to see more of in 2020,” Bloomberg Intelligence senior analyst Alison Williams said.A Greenwich Associates report this week put some numbers to the narrative. It showed that electronic trading in investment-grade corporate bonds rose to 34.4% of daily volume in November, from 24.7% just 10 months earlier. On the one hand, that’s still a relatively modest slice of the market. On the other hand, that suggests more room to run. And more than half of it study participants executed a so-called credit portfolio trade, a strategy pioneered by Goldman Sachs.“The slow and steady change that has occurred over the past decade will ultimately be seen for the revolution that it brought about,” wrote Kevin McPartland, head of research in Greenwich Associates’ market structure and technology group. “Market uncertainty in 2020 should only help this train accelerate.”The trend runs parallel to the view of Wells Fargo analyst Mike Mayo, who has been wearing hoodies during television appearances as a way of drawing attention to banks’ investments in technology. Usually, though, he and others are thinking about digital banking and electronic payments.Fixed-income trading, though, can seem at times to be about as slow to adapt to technological changes as an average retail bank customer. At a U.S. Treasury market conference in September, for instance, panelists including Amherst Pierpont’s Paul Murphy, Cantor Fitzgerald CEO Howard Lutnick, Citadel Securities’s Paul Hamill and Guggenheim Partners CIO Scott Minerd robustly debated whether direct price streaming in bonds was good or bad for the market. My takeaway was that there’s still a feeling among longtime denizens of the bond market that nothing is broken, so nothing needs to change.The big U.S. banks might feel differently. It’s no secret that investors are scrutinizing the companies’ efficiency goals and how they’re balancing crucial investments with cost containment. To the extent that the banks can squeeze more out of fixed-income trading with electronification — a well that’s effectively run dry in equities — I’d expect they’re going to go for it.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Morgan Stanley (MS) Q4 Earnings Top on Trading, Underwriting
    Zacks

    Morgan Stanley (MS) Q4 Earnings Top on Trading, Underwriting

    Improvement in trading and investment banking performance, and decent loan growth support Morgan Stanley's (MS) Q4 earnings.

  • Company News for Jan 16, 2020
    Zacks

    Company News for Jan 16, 2020

    Companies In The News Are: BLK, AA, UNH, GS.

  • Zacks Earnings Trends Highlights: JPMorgan, Wells Fargo, Bank of America, Citigroup and Goldman Sachs
    Zacks

    Zacks Earnings Trends Highlights: JPMorgan, Wells Fargo, Bank of America, Citigroup and Goldman Sachs

    Zacks Earnings Trends Highlights: JPMorgan, Wells Fargo, Bank of America, Citigroup and Goldman Sachs

  • Oil Climbs the Most in Two Weeks as Trade Deals Boost Optimism
    Bloomberg

    Oil Climbs the Most in Two Weeks as Trade Deals Boost Optimism

    (Bloomberg) -- Oil posted its largest gain in almost two weeks, swept along in a broader equities rally as the preliminary U.S.-China trade truce and an accord between America, Canada and Mexico fueled optimism about economic growth.Futures settled 1.2% higher Thursday, as stocks hit record highs. Under the initial settlement between the world’s largest economies, China pledged to increase purchases of U.S. commodities. Also, the Senate approved President Trump’s U.S.-Mexico-Canada (USMCA) trade accord that revamps the 1994 NAFTA agreement.“The China-U.S. agreement and the Senate passing of USMCA,” will help to boost the economy, said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Winchester, Massachusetts. “After 3 years, here is the first two bits of good news for the economy.”Prices bounced back after sinking to a six-week low Wednesday when the Energy Information Administration reported domestic petroleum stocks had expanded to the highest levels in four months.The market would have appeared to have risen more Wednesday if price hadn’t fallen sharply before the U.S.-China trade signing, said Lynch. “The market had worked harder to get prices off that low.”The Paris-based International Energy Agency in a report forecast China’s oil demand would average 14.1 million barrels a day this year, compared with 13.6 million last year. “China was a source of worry, and concerns were that its demand would slow. But that doesn’t appear to have been the case,” Lynch said.West Texas Intermediate crude for February delivery rose 71 cents to settle at $58.52 a barrel on the New York Mercantile Exchange after earlier rising the most since Jan. 8.Brent for March settlement rose 62 cents to $64.62 on the ICE Futures Europe exchange. The global benchmark crude traded at a $6.09 premium to WTI for the same month.See also: Commodity Markets Shrug at China’s $95 Billion Purchase Pledge\--With assistance from James Thornhill, Elizabeth Low and Grant Smith.To contact the reporter on this story: Sheela Tobben in New York at vtobben@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine TraywickFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • U.S.-China Pact Leaves Currency Watchers Mostly Unimpressed
    Bloomberg

    U.S.-China Pact Leaves Currency Watchers Mostly Unimpressed

    (Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. The U.S.-China trade deal includes a foreign-exchange agreement that reaffirms the nations’ commitments to avoid competitive devaluations. Currency watchers were mostly unimpressed.The two-page currency chapter of the broader accord signed in Washington on Wednesday lays out an enforcement mechanism if either side fails to adhere to International Monetary Fund and Group-of-20 commitments.The U.S. and China agreed to publicly disclose data including foreign-exchange reserves and figures on imports and exports as proof that neither side is manipulating exchange rates. But the general take from most analysts was that it offered little news on the currency front.“It still remains to be seen on enforcement of the exchange-rate component and the deal overall,” said Torsten Slok, chief economist at Deutsche Bank AG. “So we have to stay tuned with regard to the yuan.”In what analysts saw as a concession to China before the signing, the U.S. Treasury on Monday said China is no longer a currency manipulator. At President Donald Trump’s direction, Treasury Secretary Steven Mnuchin in August made an unusual move to name China a currency cheat as trade tensions rose, before removing the tag this week.A commitment from the Americans to make a public promise to remove that label at a later date was rejected by the Chinese, according to one person familiar with the matter.“Nothing new on disclosure, that’s disappointing,” said Brad Setser, who worked at Treasury during the Obama administration and is now at the Council on Foreign Relations. “The rest is mostly a reiteration of China’s existing IMF and G-20 commitments.”Optimism ahead of the agreement signing and after Treasury’s removal of China from its currency watch list drove the yuan on Tuesday to its strongest since July. The offshore yuan was little changed after the signing, at 6.88 per dollar.Treasury’s foreign-exchange policy report released Monday said China “needs to take the necessary steps to avoid a persistently weak currency.”If issues arise between the two countries and there’s a failure to arrive at a resolution, either may request the IMF to undertake “rigorous surveillance” of the policies agreed to, or initiate formal consultations and provide input, according to Wednesday’s deal.Yuan MovesThe onshore yuan is likely to stay just below 7 per dollar following the trade pact, according to Raymond Lee, a money manager at Kapstream Capital in Sydney. “With this deal that’s been done and China telling the U.S. that they’ll watch their currency, I don’t think they’ll allow it to get above 7.25,” he said.Mark Sobel, a former Treasury and IMF official, said the agreement does appear to give the U.S. administration a way to penalize China if it doesn’t follow the mandates.“What is new involves the relationship between the currency chapter and the bilateral dispute resolution mechanism,” he said. “In essence, the text indicates that if the U.S is unhappy over some aspect of FX policy, it can unilaterally make recourse to the provisions of that mechanism, including tariffs.”Currency policy has emerged as a tool for Trump to rewrite global trade rules that he says have hurt American businesses and consumers. Foreign-exchange policy is a key piece of trade pacts with Mexico, Canada and South Korea.The Trump administration has considered measures to counter the dollar’s strength, including direct intervention, though at one point last year officials said that step had been ruled out. Still, Trump has continued to lament the greenback’s strength, which is a drag on U.S. companies’ overseas earnings.Less SubstanceFor Michael Cahill at Goldman Sachs Group Inc., the accord has less substance on exchange rates than the U.S. trade deal with Mexico and Canada.“I don’t see a lot new here and it’s less relative to what’s in the United States-Mexico-Canada Agreement, particularly given there is no agreement to publish intervention data,” said the strategist. “There’s nothing in it that significantly alters our outlook for the yuan. We see the currency moving to 6.85 in three months -- so close to flat.”The signing of the long-awaited deal might have helped the market mood on the fringes but UBS Wealth Management cautions that the agreement still has its limitations. The disruptions to business investment and supply chains inflicted by tariff wars are unlikely to be undone any time soon, according to Mark Haefele, the global chief investment officer at UBS Wealth.“We see the deal as representing a partial calming rather than an end to trade tensions,” Haefele said in a client note on Thursday. “This should be sufficient to allow risk assets to advance, and we are overweight emerging-market equities and U.S. dollar-denominated sovereign bonds. Looking past a phase-one deal, we cannot rule out that U.S.-China tensions flare up again.”(Adds UBS Wealth comment in last two paragraphs)\--With assistance from Ruth Carson and Anooja Debnath.To contact the reporters on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net;Liz Capo McCormick in New York at emccormick7@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, ;Alex Wayne at awayne3@bloomberg.net, Mark TannenbaumFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Why Goldman Sachs is playing catch-up with JPMorgan

    When JPMorgan Chase posted dramatically better quarterly results this week than Goldman Sachs, it illustrated just why Goldman boss David Solomon is planning to make his company more JPMorgan-like. JPMorgan, the biggest US bank by assets, on Tuesday boasted the highest ever annual earnings of a bank anywhere, after increasing net income by 21 per cent in the final three months of last year. With annual profits of more than $36bn, JPMorgan would have enough earnings to buy Goldman’s entire share capital in less than three years, at least at its current market capitalisation.

  • Banks Provide Mixed Start to Q4 Earnings Season
    Zacks

    Banks Provide Mixed Start to Q4 Earnings Season

    Banks Provide Mixed Start to Q4 Earnings Season

  • Bloomberg

    Global Insider-Trading Probe Lands Conviction of U.S. Leaker

    (Bloomberg) -- The son of a pharmaceutical-company director was convicted of leaking company secrets to a close friend who prosecutors say was part of a global insider-trading network.Telemaque Lavidas, 39, was the first U.S. defendant tried in connection with an insider scheme that generated tens of millions of dollars on illegal tips about drug companies from investment bankers and corporate insiders. Though Lavidas played a small role in the plot, his trial in New York shed light on how a corrupt Swiss trader and others exploited contacts on three continents for market-moving information.Lavidas was found guilty Wednesday on all seven charges, including wire fraud, securities fraud and conspiracy, after leaking information about Ariad Pharmaceuticals Inc. that he got from his father, who sat on the board. The jury found Lavidas tipped off Georgios Nikas, a Greek businessman with property and restaurants in New York. Nikas used the secrets to make $4.7 million in trading profits, according to the government.Lavidas got less in return, prosecutors said. He passed the tips out of friendship with Nikas and in exchange for a $500,000 investment by Nikas’s wife in his startup nutrition-bar business, Mediterra Inc., they said.U.S. District Judge Denise Cote said she’ll sentence Lavidas on April 17. He faces as long as eight years in prison. The judge refused a request by Lavidas to be sentenced before the end of February.Lavidas has been confined since his October arrest in Manhattan’s Metropolitan Correctional Center, after Cote denied his proposed $26 million bail package before the trial. Lavidas would likely serve his sentence in a less restrictive prison than the MCC, the federal lockup where accused sex trafficker Jeffrey Epstein hanged himself in August while awaiting trial.“It is a difficult place for a person like him to be,” Lavidas’s lawyer, Jonathan Streeter, told the judge.Star WitnessFamily members wept in court on Wednesday as Lavidas removed his suit jacket, belt and tie in preparation to be moved back to the MCC.The jury deliberated for less than a day at the end of a one-week trial. The government’s star witness against Lavidas was a former Swiss trader, Marc Demane Debih, who said he participated in the network and made about $70 million on insider trades.Demane Debih pleaded guilty to 38 counts and agreed to cooperate with prosecutors in hopes of leniency when he’s sentenced. He also agreed to forfeit $49 million in illegal profit. A former Goldman Sachs Group Inc. banker, Bryan Cohen, accused of leaking tips to Demane Debih, pleaded guilty to conspiracy on Jan. 7, a day after the Lavidas trial began.The Swiss trader testified that he got profitable tips about Ariad from Nikas, who said he had access to the company’s board through Lavidas and his father, Athanase Lavidas, who isn’t charged. The elder Lavidas, who is no longer on the Ariad board, is the chief executive officer of Lavipharm SA, a family-owned drug company based in Greece. Demane Debih said he met Telemaque Lavidas once, in 2011, and never witnessed him passing confidential information.Read More: The Motley Crew Accused of Insider TradingThe evidence against Lavidas was mostly circumstantial, with prosecutors focusing on a timeline that showed when market-moving news was provided to Ariad’s board, when Lavidas called his father and Nikas and when Nikas made big, profitable bets on Ariad stock. Nikas is in Greece and considered a fugitive by the U.S.Defense lawyers argued that the Ariad tips came to Nikas from from an investment banker at Centerview Partners who was part of the ring, and that Lavidas never passed any company secrets.Demane Debih, who has been in custody since his arrest in Serbia in 2018, testified that he had a safe filled with cash in his apartment and paid $12 million to a French art collector, John Dodelande, for tips he got from investment banker sources.Dodelande, who isn’t charged, got information from investment bankers including Darina Windsor, the former Centerview banker, and Benjamin Taylor, who worked at Moelis & Co., according to prosecutors. Windsor and Taylor, who shared a London apartment, face criminal charges but are not in U.S. custody. Windsor had access to information about Ariad through her work at Centerview, the defense team said.Evidence showed that Taylor and Windsor sometimes communicated in code, using the pet names “Pops” and “Popsy” in emails. They’re charged with providing inside information on 22 companies.The case is U.S. v. Lavidas, 19-cr-716, U.S. District Court, Southern District of New York (Manhattan).(Updates with reaction to verdict.)To contact the reporter on this story: Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.netTo contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Steve StrothFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Banks’ Debt Trading Surge Rolls on With Goldman Joining Party
    Bloomberg

    Banks’ Debt Trading Surge Rolls on With Goldman Joining Party

    (Bloomberg) -- Whether it was juicy spreads in repo lending or a rally in junk bonds, the fourth quarter broke all the right ways for Wall Street’s trading desks.Goldman Sachs Group Inc. and Bank of America Corp. on Wednesday joined the trend of surging past expectations for fixed-income trading in the period. The four largest Wall Street firms posted a collective 56% jump in that business, the biggest leap in more than eight years.That offered relief for major Wall Street trading desks after a year that began with their weakest revenue in a decade. As more trading moves to electronic platforms, the biggest banks are betting that the scale of operations will help them gain market share.“Investors are more willing to trade in this environment,” KBW analyst Brian Kleinhanzl said in an interview. “What we’re seeing still is the overall wallet still has pressure on it, and the banks are fighting aggressively to take market share in their respective strengths.”Wednesday’s results follow earnings from JPMorgan Chase & Co. and Citigroup Inc. that surpassed expectations on Tuesday. JPMorgan’s staggering 87% climb in debt trading revenue for the quarter helped drive annual profit to a record. Citigroup’s 56% fixed-income gain signaled a rebound after the firm set out to eliminate 400 people in the trading division last year following weak results.Goldman Sachs’s bond traders also posted a comeback quarter, with revenue surging 63% from a year earlier. Chief Financial Officer Stephen Scherr said Wednesday that four of its five major market-making businesses were up from the prior year. Rates performed “particularly well,” and currencies benefited from “a better geopolitical backdrop, despite lower volatility,” Scherr said.A number of banks cited the rates business as an area of strength as traders reacted to the gap between two-year and 10-year Treasury yields swinging from negative in August to its widest level of 2019 by the end of December. Banks also benefited from being able to capture profits lending in the repo market knowing the central bank was serving as a backstop.Repo rates stabilized in the fourth-quarter, largely due to the Federal Reserve’s liquidity injections that have calmed the markets since September. These operations have allowed the central bank’s primary dealers, which include some of the largest U.S. banks, to borrow from the Fed at lower rates and force others to pay a higher rate.“Over the course of 2019 we deployed balance sheet by example against repo where there was demand for liquidity, particularly in the context of the various uncertainty that existed in the repo market,” Scherr said.The firms’ credit businesses got a boost from rallies across markets. U.S. corporate high-yield bonds had their best quarter since the first three months of the year, while the investment-grade index reached a record high, according to Bloomberg Barclays indices.Trading revenue at Bank of America climbed 13% in the fourth quarter -- more than analysts were expecting, but paling in comparison to gains at its competitors. BofA shares slipped as much as 2.8%, while Goldman joined Citi and JPMorgan in rallying after results.Equity trading at Goldman Sachs and Bank of America both fell short of estimates, bucking the trend set Tuesday by JPMorgan’s and Citigroup’s beats.The rebound in banks’ trading desks helped the Wall Street sides of the business match the retail units that have helped drive profit to new heights. The biggest banks have also reaped billions from lower tax rates, allowing them to ramp up buybacks and dividends.“What we’re seeing is a steady, stable, consistent group with not nearly as much volatility in the fundamentals as what the stock prices have shown over the last two years,” Marty Mosby, an analyst at Vining Sparks, said in a Bloomberg Television interview.\--With assistance from Alexandra Harris, Sridhar Natarajan, Lananh Nguyen, Yalman Onaran and Michelle F. Davis.To contact the reporter on this story: Hannah Levitt in New York at hlevitt@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Dan ReichlFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Dow Hits 29,000 for the Second Time: 5 Stocks Driving the ETF
    Zacks

    Dow Hits 29,000 for the Second Time: 5 Stocks Driving the ETF

    Extending its last year's rally, Dow Jones touched 29,000 for the second time in three days, suggesting strong complacency in the market.

  • Goldman Reassures on Expenses After $1 Billion Litigation Charge
    Bloomberg

    Goldman Reassures on Expenses After $1 Billion Litigation Charge

    (Bloomberg) -- Goldman Sachs Group Inc.’s comeback quarter for trading was marred by a $1.09 billion legal charge as the firm gets closer to a settlement of the 1MDB scandal.Profit dropped 24% in the fourth quarter and fell short of analysts’ estimates as the bank bolstered its litigation reserves by the most in four years. That offset a strong showing by Goldman Sachs’s fixed-income traders, who posted a 63% jump in revenue, according to a statement Wednesday that debuted the firm’s new reporting structure.Company executives reassured analysts on a conference call that the firm will be able to keep costs under control. Shares of Goldman Sachs reversed earlier declines after the comments, rising 0.9% to $247.77 at 11:10 a.m. in New York.The 1MDB affair has been hanging over the New York-based bank since at least 2016. The global scandal involves claims of embezzlement and money laundering that triggered investigations in the U.S., Singapore, Switzerland and beyond. Goldman Sachs has been under scrutiny for years over its role in raising money for state-owned investment fund 1Malaysia Development Bhd and for the money it made on the deals -- about $600 million.The legal charge helped fuel a 6% jump in 2019 expenses. The firm said it will provide an expense target later this month at its inaugural investor day. The trading division, Goldman’s biggest, beat some analysts’ estimates on the strength of gains in fixed income. The figures included derivatives related to advisory and underwriting businesses that used to be recorded in the investment-banking unit.JPMorgan Chase & Co. set a high bar for industry earnings reports on Tuesday, walloping estimates for its trading division by $1 billion. Bank of America Corp. joined in Wednesday with a 13% gain in trading revenue that also topped estimates. Investors had been expecting the industry’s biggest trading desks to rebound from 2018’s disastrous finish, and the big banks have so far more than lived up to the hype.Goldman Sachs’s new presentation breaks fixed-income trading into its revenue from market-making efforts and from financing clients. The former provided the biggest boost, as the $1.38 billion from those activities was 83% higher than a year earlier, when markets were in turmoil.Goldman Sachs revamped its reporting structure to inject more visibility into how the firm makes money, responding to calls for more clarity. The firm nixed its so-called investing & lending reporting line, often its most profitable segment in periods of rising markets but one that also drew complaints about transparency.The changes outlined earlier this month will spread the interest income Goldman receives from its lending efforts across all four of the new segments and make the firm’s divisions more comparable to its competitors. Equity investments made with the firm’s own capital will be housed in a renamed asset-management unit. The bank has said it’s looking to move away from taking stakes with its own money and is trying to raise more client funds.One standout from the fourth quarter was gains the firm made on equity investments, which are now recorded in the asset-management unit. They totaled $1.87 billion, accounting for the majority of money made in the retooled division. The company said on a call with analysts that it exited its position in Uber Technologies Inc. after a lockup period expired.Goldman Sachs also broke out its consumer-banking results, offering more granularity in its much-hyped foray into banking for the masses. The consumer unit had revenue of $228 million in the last quarter of 2019, the first full quarter since the company rolled out a credit card partnership with Apple Inc.Other HighlightsNet income dropped 24% to $1.92 billion, or $4.69 a share for the quarter.Total revenue for the year dropped 0.2% to $36.5 billion.Provision for credit losses jumped 51% to $336 million in the quarter, higher than analysts’ expectations.Investment-banking revenue dropped 7% to $7.6 billion in 2019 compared to a year earlier.To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve DicksonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Even at Goldman Sachs, $1 Billion Leaves a Mark

    (Bloomberg Opinion) -- Goldman Sachs Group Inc.’s fourth-quarter earnings were always going to be somewhat messy after the bank announced last week that it would shake up the way it breaks down results by division. The move makes sense for the long term, but more immediately it forces analysts to rethink how they measure the bank’s performance.To further complicate matters, Goldman on Wednesday disclosed a $1.09 billion legal charge, up from $516 million in the fourth quarter of 2018, as it closes in on a settlement of the so-called 1MDB scandal. That was a chief reason overall expenses reached $7.3 billion, easily exceeding analysts’ $5.422 billion estimate in a Bloomberg survey. That carried over to the headline numbers, which can’t be disguised or attributed to the new reporting structure: Profit dropped 24%, and earnings per share of $4.69 missed analysts’ estimates for $5.52. It was the first back-to-back EPS misses since mid-2011.Clearly, not even a Wall Street powerhouse can easily offset such a huge buildup in litigation reserves. But that’s not to say it didn’t try.Aside from the legal charge, Goldman largely followed the trend of its earlier-reporting competitors. Fixed-income trading revenue beat expectations by soaring by 63% from a year earlier, an increase that topped Citigroup Inc.’s 49% but fell short of JPMorgan Chase & Co.’s 86%. It remained at the top of the rankings for global mergers and acquisitions and equity offerings. The consumer and wealth management division beat analysts’ revenue estimates. Investment banking revenue wasn’t spectacular, but it wasn’t all that much better at the other big U.S. banks.The temptation, then, is to simply look past Goldman’s role in raising money for state-owned investment fund 1Malaysia Development Bhd and the scrutiny the bank has come under for making some $600 million on the deals. Indeed, some analysts have done just that already. After adjusting for litigation and the 21% effective tax rate that Goldman sees for 2020, core EPS actually came in at $6.49, ahead of an estimate of $5.94, Wolfe Research’s Steven Chubak wrote. “We believe front-loading of investments and higher litigation accrual positions the firm well to drive improved efficiency/returns in 2020 and beyond.”Along a similar line of thought: “If people feel like they have a handle on what 1MDB will cost Goldman, they will say: ‘Now I know what this is, and the other parts of the business are doing well,’” Sarah Hunt, a portfolio manager at Alpine Woods Capital Investors, said on Bloomberg TV.It’s understandable why investors and analysts make this argument, even if it feels a little crass. Sure, Goldman was caught up in a global scandal involving embezzlement and money laundering, the thinking goes, but at least there’s a more definitive price tag now.To be fair, Goldman Chief Executive Officer David Solomon has apologized to the people of Malaysia for the bank’s role in the fraud. And he reiterated in a conference call on Wednesday that the company has been “self-critical” in recent years and that “this is not representative of our longstanding values.”But that doesn’t mean the company and its shareholders aren’t ready to get the bill and move on, given that this has been looming over the bank since at least 2016. “We are working hard to bring closure,” Solomon said.Goldman’s revamped reporting structure only further demonstrates its longer-term focus. As Bloomberg News’s Sridhar Natarajan reported, the changes came in response to calls for more clarity from the bank. It did away with its so-called investing and lending reporting line, which was often its most profitable during periods of strong market performance. It will spread interest income across all four of the new segments and create more apples-to-apples comparisons to competitors. It breaks out asset management and consumer banking, two growth areas that diversify the bank away from its usual make-or-break trading and investment banking businesses.I’ve written before about how Solomon sees the bank “on an evolutionary path” and why it’s going to be a long road ahead. The consumer bank, for instance, brought in $228 million in final three months of 2019. That’s up 23% from the prior year but just a 5% increase from the third quarter. In asset management, net revenue was little changed last year relative to 2018 as an increase in average assets under supervision was offset by lower average fees. Both are on the right track, of course, but the growth is hardly exciting when compared with blockbuster fixed-income trading figures.Add it all up and Goldman seems committed to playing the long game. It now has the Apple Card fully up and running and has its consumer bank, Marcus, offering a suite of savings options. It has the new reporting structure. And it will hold its first-ever investor day on Jan. 29, which Bloomberg News’s Jenny Surane noted is something of a watershed moment for a company that has been publicly traded for more than two decades. Solomon said the bank would give its financial targets and goals at the investor presentation.This vision most likely makes the continuing 1MDB saga all the more frustrating for Goldman’s leadership. Until the bank reaches some sort of settlement, it’s bound to be an albatross each quarterly earnings season.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Trade Deal, PPI, Empire State & More Bank Earnings: GS, BAC
    Zacks

    Trade Deal, PPI, Empire State & More Bank Earnings: GS, BAC

    Today marks the somewhat momentous occasion whereby a trade deal with China is expected to be signed at the White House.

  • Goldman Sachs (GS) Q4 Earnings Disappoint, Expenses Flare Up
    Zacks

    Goldman Sachs (GS) Q4 Earnings Disappoint, Expenses Flare Up

    Goldman Sachs (GS) Q4 results reflect dismal financial advisory and corporate lending business, and high expenses and provisions, partly muted by fixed income and underwriting revenue outperformance.

  • Economic Data Deluge and Q4 Bank Earnings
    Zacks

    Economic Data Deluge and Q4 Bank Earnings

    Economic Data Deluge and Q4 Bank Earnings

  • Goldman Says It Sold Out of Uber Stake After IPO Lockup Expired
    Bloomberg

    Goldman Says It Sold Out of Uber Stake After IPO Lockup Expired

    (Bloomberg) -- Goldman Sachs Group Inc. has sold off its stake in Uber Technologies Inc. after the ride-hailing startup’s disappointing initial public offering in 2019.Chief Financial Officer Stephen Scherr said on the bank’s earnings call Wednesday that it closed its position in Uber in the fourth quarter last year.Goldman owned about 10 million shares of Uber at the time of the IPO, turning a $5 million wager using the firm’s own money back in 2011 into a major windfall. The bank recognized a gain in the second quarter, but took a hit in the third quarter as Uber’s shares plunged. Like other investors, Goldman Sachs was restricted from selling shares until six months after the offering.Goldman lost out to Morgan Stanley as lead banker on Uber’s IPO, one of the most highly-anticipated in 2019, though it did share some of the work along with Bank of America Corp. But Uber’s shares tumbled immediately after the listing and ended the year down 34% as investors questioned its path to profitability and regulatory challenges and controversies about passenger safety and the rights of drivers weighed on the company’s image.Uber has said it plains to be profitable on an Ebitda basis in 2021 and its shares are up about 18% so far this year.To contact the reporter on this story: Molly Schuetz in New York at mschuetz9@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Michael J. MooreFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.