“We reported one of our strongest quarters in recent years. All our businesses performed well in improved market conditions,” CEO James Gorman said in a statement. “We are confident in our business model and the opportunities ahead, while recognizing that the environment remains
uncertain.”
Goldman Sachs shocked the Street this week with its first earnings miss since 2015 and its first sales disappointment since last year.
Weighing on Goldman’s results were flat sales from bond, currency and commodities trading and a 6 percent drop in equities trading revenue.
Goldman’s stock hit a near five-month low on Tuesday and shaved off 73.07 points off the Dow Jones industrial average, which fell 113.64 points. Morgan Stanley shares dropped nearly 1 percent on Goldman’s miss.
Morgan Stanley’s stock, along with other bank shares, has hit a rough patch over the past month, dropping about 9 percent in that time period.
The sharp move lower comes at a time when the so-called hard data — GDP, inflation and retail sales, among others — has faltered, pushing Treasury yields lower along with the odds of a June Federal Reserve rate hike. The about-face on rates could put pressure on bank margins again just when they had started expanding.
On Friday, the Labor Department said the Consumer Price Index — a key gauge of inflation — posted its biggest drop in more than two years in March, while the Commerce Department said retail sales dropped more than expected last month.
The benchmark 10-year Treasury note yield traded below 2.2 percent Tuesday after hitting 2.6 percent just over a month ago.
US 10-year yield in past month
Source: FactSet
