Goldman Sachs Stock Dives On Earnings

In his Daily Market Notes report to investors, Louis Navellier wrote:

China 1Q23 was strong, while Goldman is dragging down Dow.

China’s long-anticipated post-Covid recovery appears to be finally coming together with a 4.5% growth rate and a sizzling 10.6% jump in retail sales. At the same time Christine Lagarde, president of the ECB, has warned that the growing geopolitical tension between the US and China threatens to destabilize global commerce and lead to a spike in inflation.

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Q1 2023 hedge fund letters, conferences and more

Larry Fink, CEO of Blackrock, also recently noted that onshoring of supply chains is inflationary, which is certainly logical given that the driver of globalization has always been to cut costs.

Dollar Daze

Legarde also expressed concerns of the move by China, Russia, and others to move away from the US dollar, and that a more splintered world will make it more difficult for central banks to contain inflation and require government policymakers to step up in controlling costs.

These concerns seem long-term in nature and portend something so damaging in nature that it’s difficult to believe that cooler heads won’t prevail.

Brinkmanship Opportunities

In much the same way the US debt ceiling is about to be hit and Republicans are making noise that they are ready to play hardball in demanding spending limits before allowing the ceiling to be lifted.

Brinkmanship is not good for the market but may present opportunities if things get carried away enough to move people to the sidelines.

Goldman Sachs Sacked

Today, Goldman Sachs (NYSE:GS) reported a miss on the top line and a beat on the bottom, albeit an 18% y-o-y drop in earnings and 5% drop in revenues, and investors were concerned with the shortfall in fixed-income trading.

The stock opened up down $13.50, down 4%, but has since recovered to down less than 2%, and is down 3.5% YTD. Bank of America (NYSE:BAC) had solid beats top and bottom but the stock is down 1.3% on the day and down 10.5% YTD.

Johnson & Johnson (NYSE:JNJ) also beat top and bottom and is also down; -2.3% today and -9.2% YTD. On a positive note, Lockheed Martin (NYSE:LMT) beat top and bottom and is up 2.7% on the day and up 5.4% YTD to a new all-time high.

Bearish sentiment remains high, but earnings have been generally better than expected, the VIX is at a low 17, and stocks remain near the highs for the year.

Coffee Beans: Lost Lager.

A rare batch of beer brewed to mark the ill-fated coronation of King Edward VIII is to be auctioned for charity – after being lost in storage for decades. The beers are no longer drinkable and will be auctioned off purely as collector’s items. Source: AP News. See the full story here.

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