Goldman Profit Rises Sharply on Strong Trading, Deal Making
Topic of the day
Goldman Sachs Group Inc. reported record profit and revenue in the first quarter, benefiting from a turbocharged market and an economic recovery. Goldman posted a quarterly profit of $6.84 billion, or $18.60 a share, on revenue of $17.7 billion. Both measures were up significantly from a year ago -- when the bank posted profit of $1.2 billion on revenue of $8.7 billion -- and exceeded the expectations of analysts polled by FactSet, who forecast profit of $10.22 a share on revenue of $12.56 billion. Trading revenue rose 47% from a year ago to $7.6 billion, thanks to a 31% increase in fixed-income, currency and commodity trading revenue and a 68% increase in stock-trading revenue. The firm's investment bankers brought in $3.8 billion in fees arranging mergers and securities offerings, up 73% from last year's first quarter and another record for Goldman. That business is set to keep growing.
For more analysis and market information, subscribe to the Themes Trading newsletter. The Themes Trading "Cybersecurity" is now online: https://www.swissquote.ch/investment-themes-webapp/IThemeDetail.action?…
After two days of losses, the Swiss stock market showed its friendly side on Wednesday. The SMI gained 0.3 percent to 11,156 points. Among the 20 SMI stocks, there were 11 price gainers and 9 losers. A total of 44.43 (previously: 41.52) million shares were traded. With convincing figures from the three U.S. banks Goldman Sachs, JP Morgan and Wells Fargo, Swiss banking stocks also ran up. UBS gained 1.6 percent. Credit Suisse, however, managed only a meager plus of 0.1 percent. The bankruptcy of the hedge fund Archegos still weighs on the value. Richemont was the strongest performer in the SMI, gaining 3.3 percent. Here, investors were encouraged by the strong figures of its competitor LVMH. Swatch (+1.1%) was also able to profit. In addition, especially the heavily weighted Roche share (+1%) kept the SMI in the plus. It has weakened on the past two days and was up just 2% for the year on Tuesday, about half as much as the leading SMI index. The weakest stocks in the SMI were Partners Group (-1.5%), Geberit (-0.9%) and SGS (-0.8%).
European shares mostly rise as oil and mining stocks gain after the International Energy Agency said increasing vaccinations looked set to boost oil demand. The Stoxx Europe 600 gains 0.2%, the FTSE 100 rises 0.7% and the CAC-40 advances 0.4%, though the DAX drops 0.2%. Momentum was rare on Wednesday, as European investors mulled concerns over Covid-19 vaccines and looked toward the start of earnings season. Shares of SAP, LVMH and easyJet climbed on well-received results. Shares of LVMH rose 2.9% after consensus-beating first-quarter sales driven by strong performance by flagship brands. It was the first period marking the integration of U.S. jeweler Tiffany, which saw organic revenue growth of 35%, while core fashion, including Louis Vuitton and Dior labels, posted growth of 52%. Shares of Richemont were also up by 3.3%. Leading decliners were shares of Tesco, which fell 2% after the grocery chain reported a fall in pretax profit for fiscal 2021, driven by pandemic-fueled costs.
On Wednesday, investors sold tech stocks, knocking some major stock indexes lower after reaching all-time highs earlier in the day, as volatility continued to reverberate across the market. The Dow Jones Industrial Average opened higher after several banks kicked off the latest earnings-reporting season with blowout profit reports. But the blue-chip index gave up a significant chunk of the gain as the day wore on, much of it evaporating after the release of a Federal Reserve report saying the U.S. economy accelerated to a moderate pace and showed signs that businesses were raising prices between February and early April. The Dow Industrials settled 0.2% higher, falling short of a new closing record. The S&P 500, which also hit its highest level ever earlier in the session, slid into the red, shedding 0.4%. And the Nasdaq Composite fell further, declining 1%.
Japanese stocks were higher as gains in energy and bank stocks helped offset losses in semiconductor-related stocks. The Nikkei closed marginally higher at 29,646 points. In Shanghai, the Composite Index falls by 1.2 percent. The Hang Seng Index loses 1.0 percent in Hong Kong. Profit taking impacts Alibaba in Hong Kong by 2.1 percent. South Korea's Kospi rose 0.4% to 3195.50 in early trading, led by gains in electronics and steel stocks.
U.S. ten-year Treasury yields edged up by just under 2 basis points - supported by import prices that rose more sharply than expected. These underpin rising inflation expectations.
RBC raises LVMH target to EUR 635 (600) - Outperform
Berenberg raises Stabilus target to EUR 77 (72) - Buy
Berenberg raises Dermapharm target to EUR 80 (74) - Buy
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.