Market Wrap – Goldman Sachs weighs on banking stocks

Shares of New York-based Goldman Sachs remained under pressure after the investment bank said quarterly profit plunged 66% from a year earlier to $1.33 billion.

This marked a price of around $3.32 per share, which was about 40% below the consensus estimate. Importantly, that made for the largest EPS miss since Oct. 2011.

The company’s revenue faired slightly better, at $10.59 billion, down 16% from a year earlier, just below the estimate. It is also noteworthy banking stocks sentiment is low intraday.

Goldman said its companywide revenue decline was driven by sharply lower results in two of its main divisions, Asset & Wealth management and Global Banking & Markets.

Specifically, the bank saw investment banking fees drop 48% to $1.87 billion on muted issuance activity in equity and debt markets and lower advisory fees.

The quarterly earnings report from Q4 has been mixed with some bad reports. Such as, last week Bath & Beyond warned that it was on the brink of bankruptcy. This is important because the stock is used as bellwether for the US economy and especially the housing sector.

The company recently reported that it lost a third of its sales in last year’s holiday run-up and that it would close more stores and lay off corporate employees in a bid to cut costs and stay afloat.

The company’s management also said in a Securities and Exchange Commission filing that it was considering bankruptcy. However, the stock price of Bath & Beyond ignore the news.

Goldman analysts say that even with a sour economy, they predict the 2023 investment return on the S&P500 will be between 9-12%.

In other stocks news, Tesla is building on recent gains and is trading nearly 5 percent higher today as risk-on sentiment abounds in growth stocks.

Risk-on assets and growth assets, such as technology and crypto sectors have been the best performing bets over the last several days.