Goldman Sachs had a quarter blast but my mission is done

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When I told you that I was entering Goldman Sachs (GS) earnings on Friday morning for a trade, I expected the company to have probably traded the markets a little better than its peers. I expected investment banking to do well. I did not expect this. What a brilliant quarter this has been for Goldman Sachs. Houzzah !!

Goldman announced a third-quarter GAAP EPS of $ 14.93, beating the consensus of 21 selling analysts by nearly five dollars and breaking the upper end of the expectation range of around $ 3.60. The company generated revenue of $ 13.61 billion, a growth of 26.3%, and beat that same group of analysts by nearly $ 2 billion. 2 billion dollars!

Breakdown

If we look at the performance of the segment, some of these lines are dazzling …

– Investment bank contributed $ 3.7 billion in revenue, up 88% from a year ago, thanks to higher fees for advisory services, underwriting and business loans. A note of caution … This is the second quarter in a row with such a robust performance for investment banking, and the order book is significantly lower than it was three months ago at this time.

– Global markets generated $ 5.61 billion in revenue, up 23% from a year ago. Fixed income securities were up $ 2.51 billion, unchanged from a year ago, while stocks were up $ 3.1 billion, up 51% year-on-year. the other.

– Asset Management revenue was down 18% to $ 2.28 billion, as investments in stocks and debt securities were both affected from last year, while loans also generated income lower net for this group.

– Consumption and wealth management saw its sales increase by 35% per year to reach $ 2.02 billion. Wealth Management led the performance, up 40% to $ 1.64 billion, while the consumer – never Goldman’s fort – generated 17% revenue growth to $ 382 million.

Nitty gritty

Provisions for credit losses were $ 175 million, compared to $ 278 million in the third quarter of 2020 for net income of $ 92 million. The company’s allowance for bad debt stood at $ 41.7 billion as of the last day of the third quarter. Operating expenses increased 6% to $ 6.59 billion. The company returned $ 1.7 billion in capital to shareholders during the three-month period indicated. This included $ 1 billion in share buybacks and $ 700 million in dividend payouts. The balance sheet remains healthy. Liquidity is a bit lower than it was three months ago, but this is more than offset by secured deals and business assets. Total liabilities are higher, but the lion’s share of growth is in deposits.

Table

Readers will note that GS had an excellent quarter, one of its best on record, indeed its best in investment banking history. The point is that the backlog has narrowed a bit. The stock resumed the 50-day SMA on Friday morning after resuming the 21-day EMA last night. The stock is far from overbought and could potentially rise, with resistance around $ 420 which, if approached, would not even break the stock of its current base pattern. It is your backbone if you are in this area for an investment.

As In wrote to you this week and told you Thursday on national television, it was for me, a simple trade of trader. This trader bets on his traders. Don’t say you’re wrong to stay long. I say my mission has been accomplished, and I will be leaving the name once this article is published.

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