Displaying items by tag: Goldman Sachs

Friday, 03 December 2021 16:49

Goldman Rides Amazon to the Clouds

Goldman Sachs has a new platform for investors to assist in portfolio management. In a partnership with Amazon’s cloud division, GS is bringing data and software tools for software management to a cloud computing environment. The product will give investors access to aggregated data and GS expertise in investing. Additionally they hope to lower the barrier to entry for quantitative trading techniques and allow smaller firms to have access. The partnership came as a shock at how close both companies are to one another. This also adds another company to Amazon's growing list of cloud based partnerships which have had an incredibly high success rate. GS will monetize the platform and target it to hedge funds and other financial companies.

FINSUM: This products biggest benefit will be the clean data and accessibility, but a strong partnership like this could send regulation warning signs to Washington.

Published in Eq: Financials
Tuesday, 09 November 2021 17:39

Goldman says “Good Luck” to the Bond Market

Strategists for Goldman Sachs, Christian Mueller Glissmann and Peter Openhiemer, say that government bonds are failing to meet the traditional hedging requirements and to consider higher cash and equity allocations. There is still a small negative equity/bond correlation and investors shouldn’t leave the traditional 60/40 split immediately. There are other reasons to allocate more to equity though such as a higher equity risk premia. Inflation is eating away very low yields, making cash a better relative investment, and rate volatility could be even higher in the upcoming Fed cycle. If bonds/equity correlation moves to zero then a balanced portfolio is futile and cash is the safer option.

FINSUM: Investors should need to watch the real return on their fixed income investments and high yield debt might not be worth the risk to generate the ‘normal’ bond returns.

Published in Bonds: Total Market
Tuesday, 19 October 2021 19:44

Goldman’s Big Call on Real Estate

The housing market has outpaced nearly all expectations as prices are up a staggering 17.7% over the last 12 months. Some bears said this pace has to slow and that simply put there aren’t enough buyers to keep demand boosted this high, but Goldman Sachs sees it differently. They are projecting home prices to grow at 16% over the next year. They believe millennials are just hitting their stride in the buyers market and that a woefully short supply will keep prices elevated. New home construction has been far too sluggish in the post-2008 environment as investors are skittish, but low-interest rates give many the opportunity to buy. All of this puts the U.S. at an estimated 4-million home shortage, which has Goldman extending the horizon for house price growth through 2023, projecting another 6% increase. Others aren’t as bullish; CoreLogic and Freddie Mac are projecting 2.2% and 5.3% respectively.

FINSUM: Extremely low interest rates and glimpses of inflation could prop up home prices for the time being, as excess money has tended to flow disproportionally into assets like real estate.

Published in Eq: Real Estate
Monday, 11 October 2021 21:00

Goldman Warns of Big US Default Risk

(New York)

The debt clock is reading ten minutes to midnight for Congress which seems gridlocked in a game of chicken that could cost the public. Goldman Sachs issued an internal note late last week that there is a material risk that congress fails to reach a consensus on increasing the debt limit. Mitch McConnell is currently reviewing two plans to present Dems that would allow them to reach a consensus on raising the debt ceiling. Treasury Secretary Yellen reiterated that the government will be cash poor to pay the bills if Congress fails to raise the ceiling. Some are calling for the Treasury to mint a $1 trillion coin in order to finance if Congress doesn’t raise the debt ceiling but Goldman says this scenario is unlikely.

FINSUM: Congress always comes around to raise the debt ceiling, but a new wave of Democrats and Republicans pose new risks that a mutual agreement can be met.

Published in Bonds: Total Market
Tuesday, 14 September 2021 18:46

Goldman Makes a Big Call on Tech Stocks

(San Francsico)

There are mixed signals as to how to currently position oneself in the market as news reports are calling many things a good buy, from doubling down on momentum to cyclical value stocks, but Goldman Sachs is bullish on lots of large-cap internet stocks. Amazon, Facebook, Snap, Uber, Lyft, and Expedia all received buy ratings from Goldman’s investment team. They see secular trends in revenue growth and operating efficiencies scaling these companies even larger over the next couple of years. While they don’t consider themselves overly bullish, they see digital advertising being a key lever to push for these companies to have their full upside priced correctly by the wider market. Subscriptions, the creator economy, cloud computing, and augmented reality are all reasons to be fans of large-cap growth, but they are staying away from Airbnb and Twitter. FINSUM: The fed-keeping rates low is very promising for growth companies that are reliant on the credit-frothy economy. But rate moves are also the key risk.

Published in Eq: Tech
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