Displaying items by tag: Goldman Sachs

(Washington)

In what seems slightly odd timing, Goldman Sachs is going on the record about the 2020 election. The bank is saying Donald Trump is likely to win re-election. Goldman says his lead is “narrow” but that his chances are improved by the crowded Democratic field and the success of the economy. What is so interesting about the call is that in runs in contrast to most polls, which Goldman points out, saying “While we believe the majority of market participants expect President Trump to win a second term, we note that prediction markets point in the opposite direction and imply that the Democratic candidate has a 56% probability of winning and the Republican candidate has a 44% chance”.

FINSUM: We have to agree with Goldman. Trump’s base seems to have grown in strength since his initial election, and the politics of the left seem more likely to fragment their base (including into third party candidates) that unite them behind a single leader.

(New York)

Goldman Sachs investors took it on the chin this week. Earnings numbers just released look pretty grim, especially as compared to some other banks, like JP Morgan, which had good showings. The bank got hit by a triple whammy of lower trading revenues, weaker private equity profits, and lower fees from investment banking, all of which conspired to bring earnings down by 20% in the first quarter. David Solomon, CEO, is promising the company is undertaking a “front to back” performance review of Goldman’s businesses.

FINSUM: This looks particularly poor because JP Morgan was able to achieve the highest ever quarterly profit of a US bank during the same period.

(New York)

Gold is an interesting asset class right now. Everyone knows it has been in the doldrums for many years, but with recession fears brewing, and rates falling, the outlook is an interesting one. Goldman Sachs thinks gold is headed higher. Their thesis is that late cycle worries and falling rates will combine to push up the shiny metal. Falling rates will weaken the Dollar, further helping overseas buyers purchase gold.

FINSUM: In general, we like this thesis. However, we think gold would do better if there was more worry about a huge downturn/crisis, which there doesn’t seem to be. Fears right now are about a standard recession, which would help gold, but maybe not be ultra bullish.

(New York)

2019 is often to an uneven start. We have had some good days and some bad ones, but the market has surely not found solid footing or a narrative to drive it. With that in mind, the question of allocation becomes eve more complicated than it was a few months ago. Goldman Sachs has just put out its recommendations and argues that investors should put money back in shares, as they are due for a big rebound. Historically, shares generally bounce back after falling 20% in a quarter, and Goldman thinks there are big returns to be made. Companies seeing margin expansion might be particularly favorable.

FINSUM: The S&P 500 has already advanced almost 10% since Christmas eve, but we are not sold the current tread is upward.

(San Francisco)

What should investors do about tech stocks? That is a big question. After an extraordinary run over the last couple of years, things have a hit a real rough patch. Worries about regulation loom. With that said, Goldman Sachs is optimistic on some large and midsize tech stocks. One of its high conviction picks is Netflix, which is down around 30% recently. Goldman is steadfastly a believer, however, saying “We believe Netflix represents one of the best risk/reward propositions in the Internet sector”. Other names to look at from Goldman include Expedia and Etsy.

FINSUM: What we like about these three names is that they seem the least likely to be impacted by any new privacy regulations.