📈 Goldman Sachs bets on stock trading!
Goldman Sachs has reported first quarter results that beat analysts' expectations, mainly due to a significant increase in equity trading revenue. Earnings came in at $14.12 per share, $1.77 higher than market expectations (USD 12.35). Revenue was USD 15.06 billion, slightly above the consensus of USD 14.81 billion.
🔥Equity trading was the main driver of the results - here, sales were up year-on-year by 27 % to US$4.19 billion, US$540 million more than analysts expected. This strong performance helped offset weaker numbers in other segments, particularly asset management and investment banking.
📊 Segment details:
The Global Banking and Markets division saw overall revenue rise 10% to $10.71 billion.
Fixed income trading grew just 2% to $4.4 billion, missing expectations (estimate was $4.56 billion).
Investment banking fees fell 8% to $1.91 billion, slightly below the estimate ($1.94 billion), driven by a decline in advisory revenue.
Asset and wealth management weakened 3% to $3.68 billion, with lower revenues from private equity, public equities and debt investments.
The Platform Solutions division reported a 3% decline to $676 million, just below expectations.
CEO David Solomon described the environment as highly uncertain, both in the short and long term.
"Our clients, including top corporate management and institutional investors, are cautious. They are delaying decisions, waiting to see how the situation unfolds."
Solomon alluding to the rise in trade tensions that have escalated following recent announcements by the administration of President Trump administration's latest administration announcements regarding changes to trade agreements and new tariffs. These moves are undermining corporate confidence, which translates into subdued activity in investment banking, particularly in IPOs, mergers and advisory.
📉 Trade wars and volatility
Goldman Sachs, like JPMorgan or Morgan Stanley, is benefiting from wild markets.
JPMorgan: +48% equity trading revenue
Morgan Stanley: +45%
Goldman Sachs has once again shown that it is one of the top performers when it comes to its ability to react in rapidly changing conditions. But there is a warning light underneath the above-average numbers, as performance is not evenly spread and overall sentiment is vulnerable.
What is your view on Goldman Sachs and the banking sector?
I have $BAC and $SOFI in my portfolio, so I probably won't add anything right now.
Currently the stock is at an interesting price and I'm thinking of buying up bank stocks now.
Quality business, but I was more interested in $SOFI and $SQ stock.