What happened with GS today?
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Most of Goldman Sachs Group’s revenue comes from Global Banking & Markets, where trading and client financing contribute more than investment banking fees. Corporations, investment funds, financial institutions and governments use it to buy and sell financial assets and finance positions. Goldman Sachs connects buyers and sellers or takes the other side of trades using its own capital, seeking to earn the difference between buying and selling prices. It also earns transaction fees and interest on financing. Companies pay it to advise on mergers and acquisitions and arrange stock and debt offerings.
Asset & Wealth Management is the other major business. Institutions and individuals pay Goldman Sachs to manage investments, while its tailored wealth advice primarily serves ultra-wealthy clients. Most management fees depend on the value of assets it manages; some funds also pay fees linked to investment performance. The business earns interest from private banking and lending, and returns from its own investments.
Revenue depends on clients completing deals, trading and retaining assets with the firm, as well as market conditions and investment performance. Deposits and borrowing help fund lending and trading positions. Capital and liquidity requirements constrain these activities, while the Volcker Rule restricts proprietary trading and certain fund activities.
Its remaining Platform Solutions business is concentrated in Apple Card customer credit cards and deposits, alongside exited businesses. Goldman Sachs has agreed to transfer Apple Card to another issuer as part of its planned retreat from consumer-related activities; the transfer is not yet complete.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Morgan Stanley and Goldman Sachs compete for companies' financing and advisory work, institutional securities trades and clients' investment assets. Its institutional securities and investment-management results offer a read on the same deal, trading and asset demand that reaches Goldman.
JPMorgan Chase competes with Goldman Sachs to help corporate and institutional clients raise money and to manage investors' assets. Watch its Commercial & Investment Bank and Asset & Wealth Management results rather than its consumer bank for the overlap with Goldman.
Bank of America competes with Goldman Sachs for corporate financing, client trades across asset classes and wealth-management business. Its Global Markets results and wealth clients' balances are useful checks on trading demand and the pool of assets both firms seek to serve.
Citigroup competes with Goldman Sachs to handle institutional trading, help companies raise money and manage wealth clients' investments. Its Markets, Banking and Wealth revenues give separate views of these overlapping businesses.
Barclays competes with Goldman Sachs for client trades and companies' funding and advisory work across the United States, Europe and Asia. Its Global Markets revenue and investment-banking deal standing show how it is doing in the capital markets where both compete.
UBS competes with Goldman Sachs for investment-banking work and for wealthy clients' assets, providing corporate finance services and managing clients' investments.
Jefferies competes with Goldman Sachs to advise companies, help sell their new shares and debt, and handle institutional stock and fixed-income trades. Its Investment Banking and Capital Markets results are the clearest window into that shared demand.
Deutsche Bank competes with Goldman Sachs for institutional clients' global trading and companies' investment-banking work. Its total revenue also includes corporate cash management, trade finance and lending, so it is not a pure measure of the businesses that overlap with Goldman.
Nomura competes with Goldman Sachs in institutional securities and investment management, but its business is more concentrated in Japan. Its fees for managing individual and institutional investors' assets offer a view of investment demand with a stronger Japanese tilt.
Evercore Inc. competes directly with Goldman Sachs for major corporate merger advice and other investment-banking assignments. Watch its client fees from advisory and underwriting transactions for a read on the deal activity that also feeds Goldman's banking fees.
BlackRock competes with Goldman Sachs Asset Management for institutional investors' money and investments sold through intermediaries. Both earn fees largely tied to managed assets, making BlackRock's asset flows and investment-management fees useful checks on the demand facing Goldman.
Lazard competes with Goldman Sachs for companies' advisory work and institutional investors' asset-management mandates. Each of Lazard's advisory engagements is won and priced separately, so new assignments show where corporate clients are spending on advice.
Moelis competes directly with Goldman Sachs for advisory fees from corporations and financial sponsors, helping them with mergers, financing and restructuring rather than primarily lending or trading. Its advisory business offers a focused view of client demand for those services.
KKR & Co. competes with Goldman Sachs for investors' alternative-investment capital and private-market opportunities, earning fees for managing institutional and individual investors' money. Watch its fundraising and management fees alongside Goldman's efforts to turn committed capital into fee-earning investments.
T. Rowe Price competes with Goldman Sachs in managing investors' assets but also collaborates with it on public- and private-market investments for retirement and wealth clients. News on those joint offerings matters to Goldman as a partner, not just as a rival.
Virtu Financial competes with Goldman Sachs by standing ready to buy and sell securities and executing institutional clients' trades, earning bid-ask spreads and transaction revenue. Its market-making results offer a check on trading volumes and spreads that also affect Goldman, though Goldman's inventory values matter too.
Houlihan Lokey, Inc. competes with Goldman Sachs to advise companies on mergers, financing solutions and restructuring, with more emphasis on mid-cap deals. Its corporate-finance and restructuring fees offer a view of those advisory markets, with a different deal-size mix from Goldman.
Stifel Financial Corp. competes with Goldman Sachs for corporate investment-banking work, institutional securities trades and private clients' wealth-management business. Its Institutional Group results isolate the banking and stock and fixed-income trading activities that overlap with Goldman.
Raymond James competes with Goldman Sachs to manage retail and institutional investors' money, advise companies on mergers and help sell new shares and debt. Its investment-management and advisory and underwriting revenues show overlapping demand, chiefly from its US-focused business.
Barclays PLC earningsBCS
Barclays' Global Markets revenue will show how actively companies and institutional clients are trading in markets it shares with Goldman Sachs.
Read Barclays' Global Markets revenue separately from its investment-banking deal activity: the first reflects client trading and financing, while the second reflects companies raising money and seeking advice. Strength in both points to broad demand in businesses Goldman also serves; weaker Global Markets revenue suggests the trading backdrop may be less supportive for Goldman too. These figures show shared demand, not whether Goldman won or lost market share.
Lazard, Inc. earningsLAZ
Lazard's advisory business will show whether companies are still hiring advisers for mergers and other deals, work that also feeds Goldman Sachs's investment-banking fees.
Read Lazard's new advisory assignments alongside its advisory revenue. More assignments and stronger revenue suggest companies are still paying for advice on mergers and other deals, a supportive demand signal for Goldman Sachs's advisory business; weakness in both points to cooling client demand. Lazard's results show the market for advice, not which mandates Goldman won.
UBS Group AG earningsUBS
UBS's wealth-management results will show whether wealthy clients are still entrusting firms with their assets, the same clients Goldman Sachs seeks to serve.
Read UBS's wealth-management net inflows alongside related fee revenue; net inflows are client money added minus money withdrawn. Rising inflows and fees suggest clients are bringing in assets and demand for wealth services is firm, a positive read-through for Goldman Sachs's comparable business. If fees rise mainly because markets lift asset values while inflows are weak, growth depends more on market prices than on clients adding money.
Fed Interest Rate Decision
Goldman Sachs earns interest on customer deposits and individual-client loans and pays interest on deposits and borrowings, so the Fed’s benchmark rate can change both income from lending and the cost of funding its businesses.
Expected4.0%Last release4.0%
If it comes in above expectations
For Goldman Sachs, higher rates may lift interest earned on loans and other assets as they reprice, but can also raise what it pays on deposits and borrowings, potentially squeezing the net interest it retains.
If it comes in below expectations
For Goldman Sachs, lower rates may reduce interest earned as loans and other assets reprice, but can also lower the cost of deposits and borrowings, potentially supporting the net interest it retains.
Virtu Financial, Inc. earningsVIRT
Virtu's trading volumes and bid-ask spreads will show how active client trading is and how much room each trade leaves, conditions that also affect Goldman Sachs's market-making business.
Read Virtu's trading volume together with its bid-ask spreads. Active trading and stable or wider spreads mean market makers have more trades to handle without less room on each one, a more supportive setting for Goldman Sachs's client-trading business; falling volume or narrower spreads point to pressure on trading opportunities or economics. Virtu's results do not capture changes in the value of Goldman's own trading positions.
KKR & Co. Inc. earningsKKR
KKR & Co.'s fundraising and management fees will show whether investors are still committing money to alternative investments, an area where Goldman Sachs also seeks assets.
Read KKR & Co.'s new fundraising alongside management fees. More fundraising with higher fees suggests investors are allocating to alternatives and that capital is becoming fee-earning business; weakness in both points to more difficulty attracting commitments or turning them into fee-earning assets. For Goldman Sachs, this is a read on demand and competition in alternatives, not evidence that KKR's capital will go to Goldman.
