Displaying items by tag: Goldman Sachs

Tuesday, 10 December 2019 08:12

Goldman Pushing Deeper into Wealth Management

(New York)

One of the first big changes under new Goldman CEO David Solomon is becoming clear. That first major move is in wealth management, where Goldman is attempting to push much more broadly into the market. The bank plans to launch a robo advisor to get people with as little as $5,000 to invest to join its offering. Goldman has traditionally gone after very wealthy clients ($10m+), so this is a major change of pace for the the bank and is more in line with its recent increased focus on mass market savings products. A senior figure at Goldman explained “It’s a pipeline for future clients” to allow them to “experience the Goldman Sachs’ way”.


FINSUM: Goldman seems to believe it has stretched the high end of its market (big corps and UHNWIs) as far as it could go, and this is just the next logical area for growth. The challenge here is that we don’t think the Goldman name has the same cache with the mass market that it does with the HNW market.

Published in Wealth Management
Monday, 02 December 2019 09:40

Wall Street’s Official 2020 Stock Prediction

(New York)

Analysts from across the Street have now put their predictions in for 2020, and the outlook is not as rosy as one would expect from a bunch of analysts who get paid to be bullish. The consensus outlook for equities can best be described as “meeehhh”. Morgan Stanley, UBS, and Stifel are forecasting that the S&P 500 will fall next year, while Citi, BAML, and Goldman are forecasting rises, but modest ones (single digits at the high end). Taken as an average, analysts think stocks will rise just 3% next year.


FINSUM: A published 3% forecasted rise by Wall Street research analysts feels more like they are expecting a 10% loss.

Published in Eq: Large Cap
Monday, 25 November 2019 11:21

Goldman Warns of “Baby” Bear Market

(New York)

Goldman put out a warning on Friday and advisors should pay attention. The bank is warning of what it calls a “baby” bear market. The focus this time is not on equities but on bonds, which have mostly been very hot this year. Goldman thinks that Treasury yields are going to take a hit in 2020, falling back to around 2.25% on the ten-year. That is a pretty large move from the 1.7% level seen today. The catch on Goldman’s call is that it doesn’t really see the move beginning until the second half of 2020, so it is a bit of a delayed bet.


FINSUM: This is quite a long-term view and in Goldman’s own words is contingent upon investors thinking the Fed might hike rates. That seems a LONG way off; at least post-2020 election we would think.

Published in Bonds: Treasuries
Tuesday, 05 November 2019 13:22

Goldman Says to Cash Out of Equities

(New York)

In what comes as a very worrying announcement for investors, Goldman Sachs has just said that it may be time to cash out of equities. Goldman says that the current mass rotation out of equities and into bonds mirrors what happened before the Crisis. “Decelerating US economic growth, trade and geopolitical uncertainty, and near-record high starting equity allocations have likely contributed to the rotation from equities to bonds and cash this year”, says Goldman. Any steadiness in equities will probably just be artificial. “The peak in buyback activity arrived in 2018 after the Trump administration’s tax cut fueled a wave of repurchase programs. Buybacks are projected to fall 15% in 2019, and drop another 5% in the following year”, Goldman said.


FINSUM: In principle this seems like a sound assessment. The problem is that all the worries Goldman is citing have been on the table for a while and yet stocks have been rising.

Published in Eq: Total Market
Monday, 30 September 2019 09:00

Goldman’s Big Bet on Consumers is Failing

(New York)

Over the last few years, Goldman Sachs has undertaken one of the biggest bets in its history. It is trying to change its DNA as a pillar of high finance to become a broad financial services company that includes a large consumer-facing business. This led to the launch of its new business, Marcus, which is a consumer investment and lending unit. So far, the results have not been pretty. The bank has lost about $1.3 bn from investing in Marcus, and the default rates on its loans have been much higher than average, causing it to pull back from the space somewhat. It has also caused a lot of internal tension at the bank, with many senior partners leaving as the company completely overhauls itself. On the positive side, the bank has pulled in $50 bn in consumer deposits, which is a new source of funding it never thought it would have access to.


FINSUM: Goldman’s stock is still at 2014 levels. That says it all.

Published in Eq: Financials
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