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Two Ways: Goldman Set to Break Records, Break the Bank

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Strengthen your portfolio in good times and bad.

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Goldman Sachs (GS) starts off the earnings round for financials next Tuesday. According to Bank of America analyst Guy Moszkowski, the firm is on track to beat its 2008 trading-revenue record by as much as 64%.

In a story by Bloomberg, Moszkowski said the New York-based firm has "unmatched risk-taking/ risk-management skills in a market that rewards these because of decline in competitor risk appetite." He expect the bank to earn about $3.90 a share, up from his previous estimate of $2.92, and above consensus estimates of $3.42.

Moszkowski upgraded the stock from "neutral" to "buy" and set his price target to $175 from $144. He believes Goldman will set aside about 44% of its trading revenue to pay compensation and benefits. The pool for employee compensation amounts to about $17.92 billion, up from $10.9 billion last year.

Shares closed up 3.36% today, to $143.21.

From the Bull Pen: Keep an eye on the iShares iBoxx High Yield Corporate Bond ETF (HYG) which will have implications for the banks in general. Bulls wanting to play this ETF to the upside can set a sell stop right below short-term support (near $75.50).

From the Bear Cave: Minyans need to watch the developing story of the CFTC, which will possibly increase its regulation on the big banks by curbing oil trades. A very significant portion of Goldman's revenues are derived from commodities trading, so this could have a big impact.

Thirsty Thursday, Minyans! Join the crew for a drink at Overlook Bar if you're in the NYC neighborhood. Have a great night!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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