GS - The Goldman Sachs Group, Inc.

NYSE - NYSE Delayed price. Currency in USD
245.70
-3.76 (-1.51%)
At close: 4:00PM EST
Stock chart is not supported by your current browser
Previous close249.46
Open247.21
Bid245.70 x 4000
Ask245.70 x 900
Day's range245.60 - 248.85
52-week range180.73 - 250.46
Volume2,418,337
Avg. volume2,391,667
Market cap86.999B
Beta (5Y monthly)1.37
PE ratio (TTM)11.68
EPS (TTM)N/A
Earnings dateN/A
Forward dividend & yield5.00 (2.00%)
Ex-dividend date26 Feb 2020
1y target estN/A
  • Former FDIC Chair: Warren is 'best candidate' on bank regulation
    Yahoo Finance

    Former FDIC Chair: Warren is 'best candidate' on bank regulation

    Former FDIC chair Sheila Bair said Elizabeth Warren is "absolutely the best candidate" on policies related to the banking industry.

  • Oil Claws Back Some Losses on Prolonged Libyan Export Crisis
    Bloomberg

    Oil Claws Back Some Losses on Prolonged Libyan Export Crisis

    (Bloomberg) -- Oil erased some earlier declines as concern mounted about supply disruptions in Libya and Iraq despite ample output from other major producers.Futures trimmed losses to settle little changed near $58 a barrel in New York on Tuesday. The Libyan port crisis that strangled exports from North Africa’s biggest oil supplier extended into a fourth day. Meanwhile, spreading unrest in Iraq threatened shipments from OPEC’s No. 2 producer.The Libyan disruption is significant because “there is a lot demand for light, sweet crude” among refiners working to comply with stricter fuel rules, said Phil Flynn, an analyst at Price Futures Group Inc.Oil prices also were pressured as a deadly virus from China spread to the U.S.“There’s obviously a lot of concern with this virus in China,” said Josh Graves, senior market strategist at RJ O’Brien & Associates LLC.West Texas Intermediate futures for February declined 20 cents to settle at $58.34 a barrel on the New York Mercantile Exchange. The contract expires Tuesday.Brent crude for March settlement dropped 61 cents to $64.59 on the ICE Futures Europe exchange in London.Libyan militia leader Khalifa Haftar has blocked ports in a show of defiance after world leaders failed to persuade him to sign a peace deal. In Iraq, protests halted production at one oil field and rockets reportedly hit the Green Zone in Baghdad after a weekend of unrest.\--With assistance from James Thornhill, Sharon Cho, Saket Sundria and Grant Smith.To contact the reporters on this story: Sheela Tobben in New York at vtobben@bloomberg.net;Jackie Davalos in New York at jdavalos10@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Carroll, 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.

  • Jack Ma’s Booming Loan Business Threatens Visa, AmEx in China
    Bloomberg

    Jack Ma’s Booming Loan Business Threatens Visa, AmEx in China

    (Bloomberg) -- As Visa Inc., Mastercard Inc. and American Express Co. prepare to enter China for the first time, one of their biggest competitive threats will come from a company that doesn’t issue credit cards.Jack Ma’s Ant Financial, already the biggest player in China’s $27 trillion payments market, is leveraging its ubiquitous Alipay mobile app to mount a rapid expansion into consumer lending.Instead of issuing cards, Ant allows customers to borrow with a few taps on their smartphones. The loans are wildly popular among China’s army of mobile-savvy shoppers, who often lack formal credit histories but generate enough financial data via Alipay for Ant to make informed decisions on whether they’ll default. The company’s outstanding consumer loans may swell to nearly 2 trillion yuan ($290 billion) by 2021, according to Goldman Sachs Group Inc. analysts, more than triple the level two years ago.“The consumer loans business has been growing at breakneck speed, but there are so many untapped users,” Huang Hao, president of Ant’s digital finance operations, said in a phone interview outlining the company’s strategy.Ant’s push into China’s 10 trillion yuan market for short-term consumer loans will make it an even more formidable challenger to U.S. card companies, which are counting on the world’s second-largest economy as a source of long-term growth.Many Chinese consumers and businesses are ditching credit cards as Ant and its main competitor Tencent Holdings Ltd. make app-based spending, borrowing and investing increasingly user-friendly. In a Nielsen survey of more than 3,000 Chinese people born after 1990, nearly 61% said they use online consumer credit while only 45.5% had a credit card.“For credit card companies coming to China, the biggest challenge is how to attract people,” said Zennon Kapron, managing director of Singapore-based consulting firm Kapronasia. “A lot of Chinese millennials are digital first, used to using Alipay as their first platform for payments, loans and wealth management.”The card giants appear to be moving forward with their China plans despite the headwinds. AmEx’s application to start a bank card clearing business has been accepted by the country’s central bank, while Mastercard has called China a “vital” market and Visa has said it’s working closely with regulators for a license.As part of its phase-one trade agreement with the U.S., China said it won’t take longer than 90 days to consider applications from providers of electronic-payments services. Regulators are opening the industry to foreign competition amid an unprecedented push to give international firms access to the country’s financial sector.Read more: Visa, Mastercard, AmEx Win Easier Access to China MarketIn response to questions from Bloomberg on the threat posed by Ant, Visa said it sees significant potential to support the growth and evolution of digital payments in China and is approaching the market with a long-term focus. Mastercard said it would continue to work with regulators to advance its application and is committed for the long haul. AmEx declined to comment.Ant, an affiliate of Alibaba Group Holding Ltd. that’s widely expected to pursue an initial public offering in coming years, started its consumer-credit business in 2015. Its loans tend to be small: half the users of Ant’s Huabei (translation: “just spend”) service borrow less than $290 and usually pay it back within months.The Hangzhou-based company, which declined to disclose the value of its outstanding loans, keeps delinquencies in check by tapping into a trove of data amassed by Alipay and Alibaba.Many customers have been using the payments and e-commerce platforms for years -- handing over details from ID cards to addresses and spending habits. Once Ant extends a loan, it can track how the money is spent via Alipay. The result is a bad-debt ratio stands at about 1%, below the 1.24% national average for credit cards.Read more: China’s Gen Z, With Little Income, Gets Hooked on Easy CreditAnt keeps some of the loans on its own balance sheet, charging interest rates that range from about 5% to 18%, according to Huang. But most are passed on for a fee to banks and other financial institutions.“We’re set to continue to work with more banks and finance companies,” Huang said. “We are, at the end of the day, a platform.”The risk for Visa, Mastercard and AmEx is that a swathe of Chinese consumers and businesses will view credit cards as obsolete. About 60% of borrowers on Ant’s Huabei platform don’t have one, and many smaller merchants don’t accept cards because they find it’s cheaper and easier to use Alipay or Tencent’s WePay. The former, with more than 900 million users, is Alibaba’s preferred payments provider.“The competitive landscape is full of local players,” said Hang Qian, a partner at Oliver Wyman, a consultancy. “The key challenges are how to promote small merchants to accept credit cards and how to get e-wallet users to switch.”\--With assistance from Alfred Liu.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Michael Patterson at mpatterson10@bloomberg.net, Jodi SchneiderFor 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.

  • Goldman Sachs CEO defends work on failed WeWork IPO
    Yahoo Finance UK

    Goldman Sachs CEO defends work on failed WeWork IPO

    David Solomon said WeWork's failed IPO was 'a great example of the process working' during a panel at Davos.

  • Goldman Sachs (GS) Secures South African Banking License
    Zacks

    Goldman Sachs (GS) Secures South African Banking License

    Goldman Sachs (GS) gets approval to operate as a bank in South Africa. This is in sync with the bank's efforts to expand in the country.

  • Are Earnings Reports Just OK, or Better than Expected?
    Zacks

    Are Earnings Reports Just OK, or Better than Expected?

    Are Earnings Reports Just OK, or Better than Expected?

  • The Zacks Analyst Blog Highlights: Microsoft, American Express, Fidelity National Information Services, Goldman Sachs and Southern
    Zacks

    The Zacks Analyst Blog Highlights: Microsoft, American Express, Fidelity National Information Services, Goldman Sachs and Southern

    The Zacks Analyst Blog Highlights: Microsoft, American Express, Fidelity National Information Services, Goldman Sachs and Southern

  • Bloomberg

    Goldman Gets South African Bank License in Expansion Drive

    (Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterGoldman Sachs Group Inc. got approval from South African regulators to operate a bank, as the Wall Street firm seeks to tap into fast-growing economies on the continent.The company also became a member of the Johannesburg Stock Exchange’s interest-rate and currency-derivatives market, Goldman Sachs said in a statement Monday. It will offer fixed-income products, foreign exchange and South African government securities, to corporate and institutional investors.Goldman Sachs, which has been present in South Africa for more than 20 years, in December appointed Jonathan Penkin as head of the local business. The firm already provides advisory, wealth- and asset-management services to corporations, investment firms, government institutions and individuals.The expansion comes as brokerages including Macquarie Group Ltd., Arqaam Capital Ltd., Deutsche Bank AG and Credit Suisse Group AG either pare back their operations or close down some businesses because of a moribund South African economy. Still, the country has the biggest, most liquid and most sophisticated capital markets on the continent, which is home to six of the world’s fastest growing economies.(Updates with background starting from third paragraph)To contact the reporters on this story: Jacqueline Mackenzie in Johannesburg at jmackenzie9@bloomberg.net;Vernon Wessels in Johannesburg at vwessels@bloomberg.netTo contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, Paul RichardsonFor 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

    Can You Get $10 Billion of Stock Orders in 10 Hours?

    (Bloomberg Opinion) -- The last place on earth where bankers and traders can make real money is opening up. As part of its trade deal with the U.S., China vowed to grant Western financial institutions more access to its $14 trillion wealth-management industry. A number of foreign-controlled joint ventures with banks are in the works. Days before Christmas, Beijing approved the first one, a tie-up between Amundi Asset Management and a unit of Bank of China Ltd. Shortly afterward, China Construction Bank Corp. agreed to partner with BlackRock Inc. and Temasek Holdings Pte, while Industrial & Commercial Bank of China is flirting with Goldman Sachs Group Inc.Millions of dollars are being thrown at this. JPMorgan Chase & Co. and Nomura Holdings Inc. are buying up extra office space in Shanghai, where staff could be paid more generously than in Hong Kong. Goldman plans to double its headcount in China to 600 over the next five years. But why would foreigners want to crowd into the world’s most competitive market? Simple: Investors in China still have faith in active managers. Last year, it took just 10 hours for a star stock picker to attract more than $10 billion in orders for his firm’s debut mutual fund.Foreign firms might reason that they have deep talent pools, too. Bin Shi, a portfolio manager who has been with UBS Group AG since 2006, can churn out profit better than many of his mainland competitors. His Luxembourg-registered All China Fund returned 50% over the past year. By tapping into local banks’ distribution networks, Western asset managers could benefit from the army of retail investors that might come crowding in.If allowed to compete, Wall Street managers could almost effortlessly bat local competitors away. After all, Beijing wants Chinese wealth managers to emulate the U.S. model. In the West, middle-class savers have built up their nest eggs with mutual funds. They get some sense of their risk-return trade-off by checking (sometimes obsessively) the charts and numbers that showcase the historical ups-and-downs of their fortunes.Not so in China. Two years after the government unveiled sweeping rule changes, many products still carry the false perception of guaranteed future returns. It’s not uncommon for money managers to post these forecasts on their websites weekly. The concept of metrics like net asset value remain completely foreign to a money manager sitting in a Chinese bank branch. In that sense, Western competitors are miles ahead.Then consider the options. If Chinese savers looked at BlackRock’s range of offerings, for example, they’d be blown away. Some funds are designed to help you retire by 2040, while others are more tactical in nature. Blending bonds with stocks in a portfolio is commonplace, and financial metrics such as the Sharpe Ratio or effective duration for fixed income funds are readily available for savers to peruse, if they decide to get a bit technical.In China, investments that can deliver steady, stable gains are rare. Moms-and-pops are stuck with either bank deposits, which are essentially subsidies to the state-owned banks, wealth management products — nowadays pretty boring, thanks to Beijing’s sweeping rule changes to limit risk — or speculative private funds that can cost you dearly.To Beijing’s credit, foreigners have a fairly level playing field in the asset-management business. The new rules, which require banks to spin off their wealth units, are re-drawing the landscape entirely. The first such operation opened for business just six months ago, and there are now about half a dozen. It wasn’t until early December that the government even finalized net capital rules for these operations. So assuming the likes of Goldman and BlackRock can get their licenses quickly, their peers won’t be that far behind. That’s quite a positive step for a country that actively blocks Alphabet Inc.’s Google and Facebook Inc. to allow its domestic players flourish.Of course, we all know the realities of marriage: Whether a partnership yields happiness is anyone's guess. But that shouldn't discourage Western asset managers from trying. There's plenty of money to be made.To contact the author of this story: Shuli Ren at sren38@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is 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.

  • Bloomberg

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

    (Bloomberg) -- U.S. investors won a direct shot at the potentially lucrative job of helping China clean up its heap of bad debt, in the trade deal struck last week. Now the hard work begins. 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.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.The Communist Party-ruled nation is trying to instill more discipline in the market as 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.Read more about China’s efforts to curb bad debt“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.(Retops)\--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.

  • Yahoo U: Breaking down P/E Ratios
    Yahoo Finance

    Yahoo U: Breaking down P/E Ratios

    Yahoo Finance's Brian Cheung explains P/E ratio.

  • 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...

  • 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.

  • 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

  • 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.

By using Yahoo, you agree that we and our partners can use cookies for purposes such as customising content and advertising. See our Privacy Policy to learn more