|Bid||214.52 x 800|
|Ask||0.00 x 1000|
|Day's Range||0.00 - 0.00|
|52 Week Range|
|Beta (3Y Monthly)||1.32|
|PE Ratio (TTM)||8.99|
|Earnings Date||Oct 15, 2019|
|Forward Dividend & Yield||3.40 (1.59%)|
|1y Target Est||235.23|
Earnings season is underway and corporate buybacks are set to boost earnings per share for S&P 500 companies.
(Bloomberg Opinion) -- Goldman Sachs Group Inc. and Morgan Stanley are the two Wall Street banks most connected to high-stakes trading. Historically, that made them seem glamorous relative to the other big U.S. institutions, which focused on the more steady business of retail banking.The tide has turned. Persistently low volatility has made it clear that banks can’t count on traders to drive profits. Goldman’s equities revenue beat expectations earlier this week, in a small sign of hope, but Morgan Stanley’s results on Thursday were more far more indicative of the trend. Its $2.13 billion from equities was the highest among banks but was down 14% from a year ago and fell short of even the lowered estimates of $2.27 billion. In fixed income, currencies and commodities, revenue dropped 18% rather than the expected 7% decline.This puts Goldman and Morgan Stanley in a tough spot. They’re not well positioned to immediately compete with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. in catering to the banking needs of Main Street. At the same time, the bank executives have to feel pressure to limit the quarter-to-quarter fluctuations that are at the mercy of the whims of the global markets.Reading between the lines, their answer to this quandary appears to be more emphasis on wealth management.Now, this isn’t exactly a revelation, nor an abrupt shift. Morgan Stanley has been moving into wealth management strategically for a while, and Goldman’s division already oversees more than $1 trillion in assets. Still, the banks’ latest commentary and moves in the past quarter make clear that they see this business, which produces a steady stream of fee-based income, as a way to leverage their reputation as titans of Wall Street.In Morgan Stanley’s earnings call on Thursday, Chief Executive Officer James Gorman specifically praised Dan Simkowitz for his work on building up the firm’s asset-management unit. And by all accounts it was well deserved, with the division’s revenue at the highest in five years. On the wealth-management side, Morgan Stanley posted $4.41 billion of revenue, which was 2% higher than last year and blew away analysts’ estimates for a 9% decline.Moreover, Morgan Stanley’s wealth-management division posted an impressive 28% profit margin. So impressive, in fact, that it drew more than one question from analysts about whether the bank can sustain that sort of momentum, including from Mike Mayo of Wells Fargo. Gorman insisted “it’s not like we are sitting back and saying we are really milking this.” Rather, “we’re playing for the long run.”At Goldman, Chief Executive Officer David Solomon on Tuesday highlighted its $750 million purchase of wealth manager United Capital, which was announced in May and represented one of Goldman’s biggest acquisitions in recent memory. Bloomberg News’s Sridhar Natarajan noted at the time that Solomon has made building out fee-based businesses a high priority so that shareholders can more easily estimate the bank’s growth and earnings.None of this is to say that Morgan Stanley and Goldman will abandon their positions as premier trading firms. But it’s notable to parse what Morgan Stanley Chief Financial Officer Jon Pruzan told Bloomberg News’s Sonali Basak in an interview. “We’re No. 1 in the world” in equities trading, he said, adding that “we would expect to maintain our market share in this type of environment.” He reiterated those comments during the analyst call.It’s certainly possible that volatility will resume, given that stock markets are hovering near all-time highs and global central banks are on the verge of further easing monetary policy. But framing expectations in terms of maintaining market share would seem to indicate that Pruzan expects further challenges for trading in the coming months and years. Ted Pick, who oversees all of Morgan Stanley’s traders and investment bankers, made some interesting comments in May about the equities business. He said he had led the division with “high levels of paranoia” because it felt like a couple of competitors were coming after the bank, either on price or looser risk requirements or something else. He said “that’s not a game we’re going to play.”Rather, as these second-quarter earnings make clear, Morgan Stanley is playing the long game. So is Goldman. When it comes to dealing with the fickle nature of financial markets, sometimes the most sound strategy is to play the hand you’re dealt.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or 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/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Treasury Secretary Steven Mnuchin said there is no change in the U.S.’s dollar policy “as of now” but wouldn’t rule out a shift at some stage in the future.There has been “no change to the dollar policy,” he said during an interview Thursday following a Group of Seven finance ministers’ meeting in Chantilly, France. “This is something we could consider in the future but as of now there’s no change to the dollar policy.”The Trump administration has softened the long-held U.S. stance of supporting a strong dollar, favoring a stable exchange rate instead as it battles China in a trade war and threatens tariffs on other countries. Mnuchin has also signaled a preference for letting markets determine a currency’s value. “These are very, very large, liquid markets,” he said in the interview.The dollar retraced gains against the euro after Mnuchin’s remarks, trading at $1.1217 per euro at 2:05 p.m. in London.Mnuchin declined to comment on the levels of the U.S. currency.When asked during a press briefing if he believes that a strong dollar is in the nation’s best interest, Mnuchin said: “I’m not going to make any specific comments on the dollar policy or the euro-dollar policy.”President Donald Trump has repeatedly brought up his preference for a weaker dollar as of late. He tweeted this month that Europe and China are playing a “big currency manipulation game” and called on the U.S. to “MATCH, or continue being the dummies.” He’s made noise behind the scenes, too, lamenting to job candidates for the Federal Reserve board that the dollar’s strength could blunt economic growth.Trump is increasingly concerned that a strong U.S. dollar is hampering economic growth ahead of his re-election and has asked his staff to find ways to weaken the greenback, Bloomberg News has reported.Trump’s public comments have stirred speculation in markets about a possible U.S. currency intervention. Goldman Sachs Group Inc. last week flagged it as a low but increasing risk, while Pacific Investment Management Co. has said a full-blown currency war can no longer be ruled out.In the interview Thursday, Mnuchin declined to say whether the administration has looked into intervening in markets to weaken the dollar.Previous MovesAdministration officials believe that for any move on the dollar to succeed, the Fed must agree with the policy and clearly communicate its support, according to people familiar with the matter. The Treasury Department and Fed have coordinated the last three U.S. currency interventions, splitting the amount transacted evenly between them in 1998, 2000 and 2011 in order to nudge the dollar’s value.Trump’s focus on the dollar was heightened after the European Central Bank said June 18 it may lower rates for the euro region, prompting a fall in the currency’s value against the greenback.Trump has since complained that the Fed is putting U.S. exporters at a competitive disadvantage by not also considering a rate cut, and has said that the U.S. would be better off with ECB President Mario Draghi in charge of its central bank instead of Fed Chairman Jerome Powell.Powell has signaled that he’s considering an interest-rate reduction, a move that would have the effect of weakening the dollar and may appease the president. Trump has repeatedly castigated Powell and Fed for rate increases last year.A strong dollar gives American consumers more buying power for imports while raising prices for U.S. exports, widening trade deficits that Trump has vowed to close.The Bloomberg dollar index is roughly unchanged on the year but a Fed trade-weighted measure of the U.S. currency is not far below the strongest since 2002, underscoring the headwinds American exports face overseas.(Updates with context starting in sixth paragraph.)To contact the reporter on this story: Saleha Mohsin in Chantilly at email@example.comTo contact the editors responsible for this story: Alex Wayne at firstname.lastname@example.org, Brendan Murray, Scott LanmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Booming stock markets around the globe helped Goldman Sachs Group Inc offset declines in other businesses last quarter, but those gains may not be sustainable, analysts said. The biggest contributor to the bank's profits was the $1.5 billion (£1.20 billion) it notched from its own equity investments – including $375 million from electronic trading company Tradeweb – some of which it sold during the second quarter. Its investment bankers also handled more stock offerings than any rivals during the period, which in turn helped boost revenue from equity trading, where Goldman is also nabbing market share.
Investing.com – Levi Strauss led the slump in apparel stocks Tuesday after Goldman Sachs (NYSE:GS) signaled it was time to move out of apparel brands who rely on department stores to flog their branded merchandise amid fears that increasingly unfashionable performances await in the second half of the year.
Wall Street???s rally ended on Tuesday after President Donald Trump expressed his doubts about a near term solution to the lingering trade battle between the United States and China.
U.S. Bancorp's (USB) Q2 performance reflects higher revenues, aided by growth in loan balances, partly offset by elevated expenses and provisions.
U.S. stocks edged lower on Tuesday as quarterly results from banks added to concerns about lower interest rates dampening their profits, while comments from U.S. President Donald Trump on trade also dragged down Wall Street's major indexes. Johnson & Johnson shares slipped 1.6% after the diversified healthcare company warned that competition from generic and copycat drugs could impact its third-quarter results.
U.S. stocks were mixed Tuesday afternoon as investors digested a wave of signals from officials over U.S.-China trade relations and monetary policy, along with an influx of corporate earnings results and economic data.
Yesterday, PayPal (PYPL) announced that it would expand Xoom, which is its international money transfer service, to 32 markets in Europe.
Goldman Sachs (GS) posted better-than-expected second-quarter results on Tuesday. The bank’s revenue and EPS topped Wall Street’s estimates.
(Bloomberg) -- Goldman Sachs Group Inc.’s trading division offered investors something its rivals couldn’t: a bright spot.The firm’s stock traders delivered a surprise revenue increase, driving Goldman’s securities unit to a smaller decline than analysts had predicted for the second quarter. Citigroup Inc. and JPMorgan Chase & Co., which announced results earlier, reported bigger-than-anticipated drops from their trading desks.Wall Street executives had warned that a slump in client activity amid trade disputes and other geopolitical risks would erode revenue from trading during the quarter. Goldman executives said their equities unit countered that by grabbing some share from weaker rivals and finally seeing dividends from years of upgrading its electronic trading systems.“The performance really was across the franchise, it was throughout derivatives and cash,” Chief Executive Officer David Solomon said on a call with analysts. “Given the market dynamics broadly, there is some sense of consolidating share and I think we’ve seen the benefit of that.”Deutsche Bank AG was losing some client assets even before it announced this month that it’s exiting the equities-trading business. Investors will be looking to see if Morgan Stanley, which has held the mantle of the top equity-trading franchise on Wall Street, also gained. The firm reports earnings on Thursday and analysts have been forecasting an 8% drop. Shares of Goldman Sachs climbed 1.2% at 11:48 a.m in New York, the fourth-best performance in the 68-company S&P 500 Financials Index. The stock is up 28% this year, putting it on track for its best annual gain in more than five years.Second-quarter trading revenue was $3.48 billion, topping the $3.37 billion average estimate by analysts in a Bloomberg survey. The equities jump masked some of the weakness in fixed-income trading, which was driven by lower revenues in rates, currencies and credit. The commodities unit, which has undergone a number of personnel changes, helped offset some of the weakness in other parts of the fixed-income business.Fees from helping companies borrow slumped 20% to $605 million, reflecting less business in the investment-grade and leveraged-finance markets. Its equity-underwriting group brought in $482 million, aided by Goldman’s role in public stock offerings for Silicon Valley heavyweights, including ride-hailing giant Uber Technologies Inc. and Slack Technologies Inc., a provider of workplace chat software.Goldman, which consolidates its firmwide investing and lending activities into one reporting line, posted $2.53 billion in that division, higher than the $1.98 billion estimate of seven analysts compiled by Bloomberg. That was largely due to gains of $500 million from investments in companies that went public during the quarter, including Uber and Tradeweb Markets Inc.Falling RatesGoldman’s recent foray into consumer banking also has prompted it to heed falling rates. In the second quarter, the firm cut the amount of interest it pays depositors with online savings accounts. Banks typically try to maximize the margin between what they pay for deposits and what they earn from making loans.Goldman also made its biggest acquisition in about two decades with the purchase of a wealth manager to help with its expansion beyond catering to just ultra-wealthy individuals. Its investment-management division is the only place where the firm posted a much bigger drop than expectations, despite an increase in assets-under supervision.Last month, Goldman Sachs passed the Federal Reserve’s annual stress test. The exam was easier on capital-markets businesses than in previous years, allowing the firm to increase dividends and share repurchases. It’s a reversal from 2018, when the regulator curtailed the bank’s ability to boost payouts.Other HighlightsEquities revenue at $2.01 billion was the second-highest for a quarter in four yearsAll elements of investment banking declined in the second quarter from a year earlier, led by a 20% drop in debt underwritingEarnings per share of $5.81 topped the average estimate of $4.93Provision for credit losses dropped 9% to $214 million(Adds CEO quote in fourth paragraph.)\--With assistance from David Scheer and Lananh Nguyen.To contact the reporter on this story: Sridhar Natarajan in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Heading into this earnings cycle for the biggest U.S. banks, analysts were already plenty worried about net interest income, which is how much the firms make from customers’ loan payments compared with what they pay on deposits. After all, long-term interest rates have plummeted since the end of last year amid signs of slowing global growth and the Federal Reserve indicating it would soon be cutting its benchmark lending rate.It turns out they weren’t quite concerned enough.On Monday, Citigroup Inc. disclosed a net interest margin that disappointed analysts, which raised doubts that JPMorgan Chase & Co. and Wells Fargo & Co. could meet expectations. That’s precisely what happened: JPMorgan, the largest U.S. bank, cut its full-year outlook for net interest income by $500 million. At Wells Fargo, which already lowered its net interest income guidance for the year in April, it fell 4% to $12.1 billion, below even the lowest estimate.JPMorgan Chief Executive Officer Jamie Dimon, in his typical style, brushed off the revised net interest income estimate of $57.5 billion. It could be higher or lower depending on how many times the Fed lowers interest rates (the bank was expecting no cuts during the last round of earnings). Net interest income “is like the wind blowing” Dimon insisted, adding that it’s more useful to focus on long-term measures like the number of accounts and deposit growth.That may be, but it matters to investors when the wind is blowing firmly in one direction. When pressed on a conference call with analysts, JPMorgan Chief Financial Officer Jennifer Piepszak described a range of outcomes that could have the Fed dropping interest rates from one to three times in 2019. If the central bank cuts more than once, net interest income could possibly fall to below $57.5 billion, she said.In more normal times, the Fed beginning a cycle of monetary easing wouldn’t be too painful for banks because they could just lower short-term deposit rates in tandem with long-term rates. But these are far from normal times. Chase Premier Savings interest rates are still next to nothing, for example, just like other big institutions. Simply put, banks got away with keeping deposit rates near zero in recent years because consumers became accustomed to getting paid nothing on their savings in the wake of the financial crisis. That led to blockbuster profits as benchmark U.S. Treasury yields rose to multi-year highs, which in turn boosted the amount earned on loans. But that leaves less flexibility on the way down.It’s worth reiterating this point because the Treasury yield curve is often seen as a clear-cut way to gauge the health of banks, and it steepened recently after Fed officials made clear their plan to lower interest rates later this month. But when deposit rates are far more sticky near zero than the fed funds rate, it all comes down to long-term yields. That means margins are compressing fast.Wells Fargo, for its part, is apparently feeling the squeeze on both sides. The drop in net interest margin from the prior quarter was due to “balance sheet mix and repricing, including the impacts of higher deposit costs and the lower interest rate environment,” the bank said in its statement.Of course, it’s not all bad news for banks if interest rates are falling, provided that the Fed successfully prolongs the longest economic expansion on record. As of now, the consumer remains steadfastly strong: On Tuesday, June retail sales showed a 0.4% monthly gain, easily beating estimates for a 0.2% advance.Earnings from JPMorgan and Wells Fargo tell the same story. JPMorgan’s consumer and community banking unit generated $4.2 billion in net income in the second quarter, a 22% increase compared with the same period in 2018. Wells Fargo’s second-quarter provision for credit losses was just $503 million, compared with estimates for about $773 million, in a signal that it expects resiliency from its clients in the months ahead.Still, this round of bank earnings shows there are few easy-money opportunities for these Wall Street behemoths. Just as they’ve shown they can’t count on traders to deliver large profits when central banks are suppressing volatility (perhaps with the exception of Goldman Sachs Group Inc.), they’re also going to have to prepare for a world awash in lower interest rates.To contact the author of this story: Brian Chappatta at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or 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/opinion©2019 Bloomberg L.P.
In contrast to Morgan Stanley’s view, J.P. Morgan (JPM) upped its price forecast for the S&P; 500 (SPY) from 3,000 to 3,200 on July 15.
Goldman Sachs' (GS) Q2 results reflect solid investing and lending revenues and expense management, partly muted by underwriting business and fixed income trading activities underperformance.