Goldman Sachs Group Inc.NYSE
Today, 12:40 PM
- The FRBNY's William Dudley isn't concerned about the post-election jump in rates at the long end of the curve, and says the Fed is about to start following suit at the short end.
- Even the dovish Charles Evans from the Chicago Fed admits inflation is getting closer to the central bank's target, and the labor market is close to full employment.
- The 10-year Treasury yield had moved as high as 2.45%, but has pulled back to 2.40%, still up 1.5 basis points on the session.
- On the regulatory front, Fed Governor Daniel Tarullo on Friday set himself up as the chief defender of the current bank regulatory regime, but whether his voice will be heard is a different story given the incoming administration, which looks to be staffed with those favoring a far lighter regulatory hand.
- Financial sector stocks today are about doubling the S&P 500's 0.5% advance.
- TBTF banks: Bank of America (BAC +2.3%), Citigroup (C +1.8%), JPMorgan (JPM +1.3%), Wells Fargo (WFC +0.9%), Goldman Sachs (GS +1.7%), Morgan Stanley (MS +0.4%)
- Regional lenders: U.S. Bancorp (USB +0.7%), PNC Financial (PNC +0.4%), KeyCorp (KEY -0.8%), Fifth Third (FITB +0.5%)
- Insurers: MetLife (MET +0.3%), Lincoln National (LNC), AIG (AIG +0.2%)
- Brokerage: Schwab (SCHW +0.9%), E*Trade (ETFC +0.9%)
- Custodial banks: State Street (STT +0.5%), Northern Trust (NTRS +1%)
- Private equity: Blackstone (BX +0.9%), KKR (KKR +1%)
- Asset Management: BlackRock (BLK +0.1%), Franklin Resources (BEN +0.5%), Affiliated Managers (AMG +1.8%)
Today, 11:41 AM
- There are multi-year highs again across the sector as interest rates continue to rise, but, maybe more importantly, bank investors begin to envision a far less heavy regulatory burden.
- In a speech Friday described by FBR's Ed Mills as "going out swinging," Fed Governor Daniel Tarullo set himself up as the chief defender of the status quo, saying he doesn't see a "sound economic case" for rolling back the post-crisis regulatory regime.
- Whether anyone hears him much going forward is a different story, given names like former BB&T boss John Allison or former FDIC chief Thomas Hoenig being thrown around as possible Fed vice chairmen for bank supervision. Both Allison and Hoenig are fans of following simple leverage ratios, but Tarullo says just focusing on those is "inadequate and dangerous."
- Tarullo's voice will also have to rise above that of Trump's Strategic and Policy Forum led by Blackstone's Stephen Schwarzman.
- XLF +1.15%, KRE +1.1%, KBE +1.25%
- Bank of America (BAC +2.6%), Wells Fargo (WFC +1.4%), JPMorgan (JPM +1.6%), Citigroup (C +2.3%), Goldman Sachs (GS +2.1%), U.S. Bancorp (USB +1%), Regions Financial (RF +1.5%), Synovus (SNV +1.1%), SunTrust (STI +1.4%), Primerica (PRI +2.1%), Bank of New York (BNY +1.4%), State Street (STT +1.1%)
Wed, Nov. 30, 2:21 PM
- There's been talk in the Goldman (NYSE:GS) hallways for months that President and COO Gary Cohn - 2nd-in-command to Lloyd Blankfein for a decade - was considering leaving the bank.
- His meeting yesterday with the president-elect has amped up that talk (Cohn is reportedly being considered to head OMB).
- Should Cohn exit, it would be the end of Goldman's most obvious succession plan, and probably signal that Blankfein isn't going anywhere anytime soon. Another possible successor, Michael Sherwood last week announced his retirement, noting "Lloyd" of late has been talking about "five more years."
- It would, however, elevate what surely is a waiting bench, and ease what some frustrated young execs call a "talent bottleneck."
- Source: Liz Hoffman in the WSJ
Wed, Nov. 30, 11:45 AM
- While the pick of ex-Goldmanite and Hollywood player Steven Mnuchin for Treasury Secretary can hardly be called "draining the swamp," Pantheon's Ian Shepherdson says it should make Wall Street happy.
- In his first public comments after being selected, Mnuchin promised to "kill" swaths of Dodd-Frank.
- Also making Wall Street (and other bankers/insurers/brokers) happy today is another big move higher in interest rates, with the 10-year Treasury yield up 10 basis points to 2.394%.
- The S&P 500 is just marginally higher, but the KBE is ahead 1.9%, and the KRE 2%. XLF +1.35%
- Bank of America (BAC +3.4%), Citigroup (C +1.9%), JPMorgan (JPM +1.5%), Wells Fargo (WFC +1.8%), Morgan Stanley (MS +2.1%), Goldman Sachs (GS +3.9%), U.S. Bancorp (USB +1%), PNC Financial (PNC +1.4%), KeyCorp (KEY +2.2%), Fifth Third (FITB +2.5%), Regions Financial (RF +2.9%), BB&T (BBT +2.4%), SunTrust (STI +2%)
- MetLife (MET +2%), AIG (AIG +0.8%), Lincoln National (LNC +1.7%), Prudential (PRU +1.1%), Hartford (HIG +1.3%)
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, JHMF, FAZZ, FNCF
Tue, Nov. 29, 3:11 PM
- More confidence that rates are rising for real this time, "wide-sweeping" regulatory changes to come, and a better FICC environment have analyst Brian Kleinhanzi upgrading Bank of America (BAC) and Goldman Sachs (GS +0.9%) to Outperform from Market Perform.
- Kleinhanzi keeps JPMorgan (JPM +0.8%) and Bank of New York (BK +0.2%) at Outperform.
- Turning to regional banks, KBW boosts its estimates for 2017 and 2018 for the large players, and upgrades Citizens Financial (CFG +1.9%) and Comerica (CMA +1.6%) to Outperform, while downgrading KeyCorp (KEY +0.3%) and PNC (PNC -0.2%) to Market Perform. The switch comes as KBW turns its focus on those lenders best positioned for a rising rate environment, and from regulatory relief, not to mention other levers should rates not rise.
- Source: Bloomberg
Tue, Nov. 29, 12:31 PM
- Goldman Sachs (GS +0.6%) has conducted an internal review of transactions made by employee Thomas Malafronte, who generated a reported $250M in profit trading junk bonds this year, according to Bloomberg. The probe concluded Malafronte did not violate the so-called Volcker Rule.
- The Volcker Rule was aimed at turning bank trading desks into no more than facilitators between buyers and sellers, but the line between that business and speculation can often be a difficult one to discern.
- In addition to the big profit at Goldman's credit-trading group, a team of Citigroup traders on its U.S. dollar interest-rate swaps desk pulled down about $300M this year.
Tue, Nov. 29, 10:06 AM
Tue, Nov. 29, 7:19 AM
- Goldman Sachs (NYSE:GS) is ahead "just" 16.7% YTD, but nearly 50% since the end of June.
- Citing valuation as the now $210 stock has blown through his $201 price target, Nomura's Steven Chubak downgrades to Neutral from Buy.
- Shares -0.4% premarket
Mon, Nov. 21, 11:23 AM
- Often mentioned as a possible successor to Lloyd Blankfein atop Goldman Sachs (GS -0.1%), Michael Sherwood - the bank's co-head of Europe - is exiting after a three-decade career.
- Sherwood has been tied up in an internal spat after he was called to testify in U.K. parliament over the bank's role in the ill-fated sale of BHS (shortly before it collapsed), reports the FT.
- For his part, Sherwood says the BHS controversy has nothing to do with his decision, and says "Lloyd" has been busily trying to get him to stay.
- “There are so many great people here and they are already picking over my job ... I stopped working for money a long time ago."
- Sherwood says his proudest achievement is the “Europeanisation" of his bank, and notes Europe was a tiny loss-generating division when he joined, and now accounts for 30% of global revenue, with profit margins matching those in the U.S.
Fri, Nov. 18, 2:46 PM
- In a note titled "Universal Banks: A New World Order," Macquarie's David Konrad recommends clients shift exposure to those banks with the most leverage to capital markets, and away from those who could get hurt by slower trade and higher currency volatility, particularly in emerging markets.
- Thus his upgrade of Goldman Sachs (GS +0.4%) to Buy, and downgrade of Citigroup (C) to Neutral.
- According to TipRanks, Konrad's record puts him in the top 10% of all Wall Street analysts covering any industry.
- Previously: Goldman upgraded at Macquarie; Citi cut (Nov. 18)
Fri, Nov. 18, 7:42 AM
- There aren't any details yet available, but the upgrade is worth noting on its own as it comes following a huge rally in bank stocks, and amid a wave of sell-side downgrades this week (as price target levels are breached).
- Macquarie upgrades Goldman Sachs (NYSE:GS) to Outperform. The $245 price target suggests about 17% upside.
- Goldman is higher by 24% over the past month - with nearly all of the advance since the election. Shares are up just 10% YTD.
- Alongside, the team downgrades Citigroup (NYSE:C) to Neutral as the $56 price target is within pennies of being hit. Citi is higher by 14% over the past month and 7% YTD.
Mon, Nov. 14, 3:47 PM
- Unsurprisingly given their run of late, financials dominate the list:
- Bank of America (BAC +5%)
- Citigroup (C +1.5%)
- Citizens Financial (CFG +3.1%)
- Discover (DFS +3.1%)
- First Republic (FRC +2.5%)
- Goldman Sachs (GS +2.2%)
- Humana (HUM +3%)
- Manulife (MFC +2.9%)
- Northern Trust (NTRS +3%)
- PNC Financial (PNC +1.7%)
- Regions Financial (RF +6.5%)
- Schwab (SCHW +1.6%)
Thu, Nov. 10, 11:03 AM
- For now, the 10-year Treasury yield is holding onto the huge gain in posted yesterday, up two basis points today to 2.086%. TLT -0.4%, TBT +0.8%. Fed Funds futures have priced in about a 100% chance of a December rate hike.
- The yield curve has shifted both higher and steeper - pure manna for the companies that borrow short and lend long. There's also a new sheriff coming to town, and bank investors are no doubt mulling an eased regulatory regime. KBE +2.45%, KBE +2.4%
- Bank of America (BAC +3.5%), Wells Fargo (WFC +4.5%), JPMorgan (JPM +3.1%). Underperformers among the TBTF players: Citigroup (C +1.1%), Goldman (GS +1.1%)
- Regional banks: Regions (RF +4.2%), PNC Financial (PNC +3.3%), Fifth Third (FITB +1.7%). Online brokers: E*Trade (ETFC +2.9%), Schwab (SCHW +2.8%), Ameritrade (AMTD +2.6%), Interactive Brokers (IBKR +2.7%)
Thu, Nov. 10, 4:20 AM
- Goldman Sachs (NYSE:GS) is considering shifting some of its assets and operations from London to Frankfurt, according to Reuters, as it tries to secure access to the EU market when Britain leaves the bloc.
- Coming under the ECB's jurisdiction should allow it to continue selling its services to clients across the eurozone and wider EU post-Brexit.
Thu, Nov. 10, 1:41 AM
- The bank has elevated 84 employees to the coveted rank, bringing the total number of partners to around 484, or 1.4% of Goldman's (NYSE:GS) work force.
- Partners, a title that remains among the most prestigious on Wall Street, typically receive a $950,000 salary, a cut of a special bonus pool and the opportunity to invest in private funds.
Wed, Nov. 9, 4:19 AM
- Donald Trump's victory throws into question the core assumption the Fed will raise interest rates soon and follow with further gradual hikes over coming years.
- Banks are struggling on the news. Fed Funds futures are now pricing in less than a 50% chance of a December move and the ECB is likely to interpret the uncertainty with stimulus and lower rates for longer.
- Premarket movement: GS -8.3%, WFC -3.5%, C -3.2%, BAC -2.4%, CS -2.3% JPM -2.2%, LYG -1.8%, HSBC -1.7%, USB -1.4%, BCS -1.5%, ING -0.6%, MS, DB, RBS, UBS