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Goldman / trade: a weakened share should not deter investors

The growing number of businesses during the epidemic seems to be gaining momentum in Wall Street banks. Goldman Sachs is the latest to say the least lower prices from fixed income and retail sales for the fourth quarter, against the manic comparisons of the last three months of 2020.

Advertisers need not fear. The uncertainty as to how quickly the Federal Reserve will increase prices this year could lead to instability in the region.

Goldman needs the party to continue. Investment banks were strong last quarter. But sales are Goldman’s largest share, accounting for 37 percent of revenue last year.

The business made less than $ 4bn in the last three months of the year, a 7 percent reduction from $ 4.3bn recorded last year. The decline is 29 percent higher compared to the third quarter. The business of trading dawdling equities was the largest.

For investors who dropped 8% on Goldman shares on Tuesday, the decline in sales is particularly affecting because it is coming against the base. rising operating costs.

Wages and benefits – one of the largest price lines in Goldman – jumped 31 percent in the fourth quarter, reflecting the high wages paid by workers after years of trading. JPMorgan has already warned that it may miss its target back this year.

Other issues: the volume of sales in Goldman remains at the top of the epidemic before. The prospects for investment banks remain strong.

Sudden rise can trigger sales. Although the Fed has indicated it could raise interest rates three times this year, Fed fund futures point to a five-fold increase.

Goldman, after trading about 1.6 volumes of his book last summer, is living at 1.25 times. These calculations can be volatile as investors wait to see what is new in sales. But Goldman is still fit for the job that promises to be a tough year in the markets.

Lex approves FT’s Due Diligence letter, which is a brief description of the world of integration and acquisition. Dinani Pano to register.

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