Tag Archives: Goldman Sachs

Goldman Sachs Warns: Russian Oil Sanctions Could Push Prices Above $85 Per Barrel

Goldman Sachs Warns: Russian Oil Sanctions Could Push Prices Above $85 Per Barrel:
Analysts at the U.S. investment bank Goldman Sachs warned in an analytical note on Monday
that tighter sanctions on Russian oil imposed
by the United States and the United Kingdom could further increase global oil prices.

 

Contents

Dutch Pension Fund

People’s Bank of China Governor

Goldman Sachs Warning

 

 

 

Dutch Pension Fund “ABP” Sells Its Entire Stake in Tesla

The Dutch pension fund “ABP,” one of the largest in Europe,
announced that it had fully divested its investment in Tesla during the third quarter of last year.
The value of the stake sold by the fund amounted to approximately €571 million ($585 million).

According to the Dutch newspaper “Het Financieele Dagblad,”
the decision to sell was driven by disagreements with the company over CEO Elon Musk’s compensation package,
which reached a record $56 billion.
The fund also expressed objections to the company’s working conditions.
Last June, the fund voted against Musk’s compensation package,
describing it as excessive and controversial.

In December 2024, a judge in Delaware rejected this package again despite shareholder approval,
stating that the matter needed further review.

 

People’s Bank of China Governor: Upcoming Steps to Strengthen the Chinese Economy

During a press conference this morning, the governor of the People’s Bank of China, Pan Gongsheng,

announced that the central bank would employ monetary policy tools to ensure ample liquidity in the market.
He highlighted plans to cut interest rates and reserve requirement ratios (RRR) for banks.
The governor emphasized that China’s economy has demonstrated resilience in facing challenges and risks in recent years,
expressing confidence in the government’s ability to achieve economic stability.

Pan stated that China plans to significantly increase its fiscal deficit to boost investment and domestic consumption,
focusing on improving consumer demand and supporting the real estate market to achieve balance.
He also pointed to the importance of allocating foreign exchange reserves in Hong Kong
to help the monetary authority there and renew the offshore yuan market.

The governor affirmed that China would remain a driving force for global economic growth,
stressing the need to shift policies to foster consumption and investment and enhance economic development.

 

 

 

Goldman Sachs Warns: Russian Oil Sanctions Could Push Prices Above $85 Per Barrel

Analysts at the U.S. investment bank Goldman Sachs warned in an analytical note on Monday
that tighter sanctions on Russian oil imposed by the United States and the United Kingdom
could lead to further increases in global oil prices.

The analysts predicted that these sanctions would drive Brent crude prices above $85 per barrel
mark amid declining global supplies, mainly after OPEC postponed its planned production increase to April.

This warning follows a rise in oil prices last Friday after
the United States and the United Kingdom announced new sanctions targeting 180 shipping vessels,
dozens of traders, and two major companies in the Russian oil sector.

 

Goldman Sachs Warns: Russian Oil Sanctions Could Push Prices Above $85 Per Barrel

SoftBank’s OpenAI Investment and Goldman Sachs’ Oil Forecasts

SoftBank’s OpenAI Investment and Goldman Sachs’ Oil Forecasts:
Recent developments in rapid economic and technological transformations
 have highlighted significant trends in artificial intelligence and energy markets.
SoftBank Group announced its acquisition of $1.5 billion shares in OpenAI,
strengthening its position in the AI sector.
Meanwhile, Goldman Sachs has predicted that
Brent crude oil prices could reach $78 per barrel by mid-next year,
driven by multiple factors impacting the global oil market.
This article delves into the details of these two topics and their implications for the worldwide economy.

 

Contents

SoftBank

Goldman Sachs

 

 

 

SoftBank Acquires $1.5 Billion in OpenAI Shares.

OpenAI has allowed its employees to sell $1.5 billion worth of shares to Japan’s SoftBank Group,
which aims to enhance its stake in the company behind the AI-powered chatbot ChatGPT.

According to sources cited by CNBC,
the deal has garnered strong support from OpenAI’s CEO, Sam Altman, and SoftBank’s CEO, Masayoshi Son.

This comes after SoftBank’s $500 million investment in OpenAI’s
most recent funding round, which valued the company at $157 billion.

Employees have until December 24 to decide whether to participate in this round,
with an offer of $210 per share, aligning with the company’s latest valuation.

Sources revealed that this funding is not tied to OpenAI’s plans to transition into a profit-driven company,
particularly as it has sufficient liquidity following Microsoft’s $13 billion
backing and the closing of a $6.6 billion funding round in October.

 

 

 

Goldman Sachs: Brent Crude May Reach $78 by June

Dan Struyven, co-head of commodities research at Goldman Sachs,
predicts Brent crude oil will peak at $78 per barrel by June before dropping to $71 in 2026.

Struyven explained that current oil prices are undervalued by approximately $5
due to a market deficit of 500,000 barrels per day last year,
increased demand from the U.S. and China, and ongoing production cuts by OPEC+.

He added that risks related to Iranian supplies and stricter U.S. sanctions could push prices higher in the short term.

Martin Rats of Morgan Stanley echoed this sentiment,
noting that low inventory levels support forecasts for rising oil prices.

 

SoftBank’s OpenAI Investment and Goldman Sachs’ Oil Forecasts

A $23.5 Billion Deal Grants 4 U.S. Banks Massive Profits

A $23.5 Billion Deal Grants 4 U.S. Banks Massive Profits from Boeing’s Capital Raise

Boeing has announced a massive $20 billion capital increase,
resulting in huge profits for four of the largest U.S. banks. As equity issuances slow down due to the upcoming U.S. presidential elections,
these banks have managed to secure significant gains from their roles in arranging this financial deal.
In this article, we shed light on the details of this deal and the profits earned by these banks.

 

Topic

Deal Details

Significance of the Deal

The Role of the Four Banks

Conclusion

 

 

 

 

Deal Details

A group of four American banks, namely Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase, are set to earn up to $75 million each for their roles as joint lead arrangers in Boeing’s capital raise.
The deal amounted to approximately $23.5 billion, which included nearly $18.5 billion in common stock sales,
plus an additional $5 billion in depositary shares representing a stake in mandatory convertible preferred stock.

 

 

Significance of the Deal

This capital raise is one of the largest equity sales ever by a publicly traded company.
Boeing took this step as part of its efforts to strengthen its balance sheet and avert a potential downgrade of its credit rating to junk status.
Additionally, this transaction marks a significant shift in market sentiment,
as stock issuances have slowed down with the approach of the U.S. elections.

 

 

 

 

 

 

 

The Role of the Four Banks

The four major banks played a crucial role in the success of the deal, by arranging and coordinating the stock sale.
Each bank acted as a key coordinator, ensuring Boeing could secure the necessary liquidity despite volatile market conditions.

 

 

Conclusion

This deal highlights the role that large banks continue to play in steering and supporting financial markets,
especially during critical times.
Despite challenging circumstances, equity issuances remain a lucrative opportunity for banks to generate significant profits.
As attention turns to the U.S. presidential elections, this deal will stand out as a milestone in the financial markets of 2024.

 

 

A $23.5 Billion Deal Grants 4 U.S. Banks Massive Profits from Boeing’s Capital Raise

Challenging Goldman’s Prediction of a Post-Election Stock Surge

Challenging Goldman’s Prediction of a Post-Election Stock Surge:
Goldman Sachs indicates that the expected rise in U.S. stocks following the elections may not materialize.
Although historical market performance often shows a post-election increase,
the past is not a guaranteed indicator of the future.
This report explores the fundamental reasons why this expectation might be misguided.

 

Content
Historical Performance
Small Samples
Impact of Major Events

Possible Scenarios
Wall Street’s Expectations

Importance of Checks and Balances

Conclusion

 

 

 

 

Historical Performance of U.S. Stocks in Election Years

The U.S. stock market typically performs well during the final months of presidential election years,
often attributed to the fading political uncertainty,
which provides relative stability on Wall Street.
Scott Rubner of Goldman Sachs noted that the S&P 500 index could rise 7%
to around 6270 points by year-end.
However, certain fundamental factors could prevent this increase.

 

Small Samples and Uncertain Outcomes

Most observations about the seasonal market performance in election years rely on limited samples,
covering only 24.
Data shows that stocks usually decline in
September and October and then rebound in the last months of the year.
Still, this pattern might be due to regular calendar factors rather than direct links to election years.

 

Impact of Major Events on Results

The best post-election rally occurred in 2020 after Joe Biden’s victory,
as markets focused on the availability of COVID-19 vaccines and economic recovery.
Similarly, in 1928, markets saw a major rally following the Republican candidate’s victory,
only to crash shortly after with the onset of the Great Depression.
This underscores the importance of historical context in market performance.

 

 

 

 

Possible Scenarios for the Upcoming Elections

Polls suggest three possible scenarios for the upcoming election:
a complete Republican victory led by Donald Trump,
a divided government with Trump in power,
or a divided government with Kamala Harris as president.
While there are chances for a Trump victory and its potential impact on markets,
the situation in 2024 is entirely different from 2016,
when economic conditions were more favorable.

 

Wall Street’s Expectations and Elements of Uncertainty

Some on Wall Street believe that Trump’s return to the White House could spark a market rally,
but today’s economic situation is different.
The U.S. has high inflation and high price-to-earnings ratios compared to 2016.
Trump’s new plans could also lead to a larger fiscal deficit and additional inflationary pressures.

 

Importance of Checks and Balances

If Trump wins the presidency but the Democrats hold the House,
investors may feel reassured by the system of checks and balances.
Conversely, Kamala Harris leading a divided government could also stabilize the markets.

 

Conclusion

While some optimistic predictions about U.S. stocks remain,
forecasting market performance after elections is challenging.
The past does not necessarily dictate the future,
and many economic and political factors influence market direction.

Challenging Goldman’s Prediction of a Post-Election Stock Surge

 

Goldman Sachs Lowers U.S. Economic Recession Forecast

Goldman Sachs Lowers U.S. Economic Recession Forecast: Goldman Sachs, the American investment bank,
has lowered its forecast for the likelihood of a U.S. economic recession to 15% over the next twelve months,
citing stronger-than-expected September labor market data.

 

Content

Goldman Sachs  

Chinese Stocks

 

 

 

Chinese Stocks Plunge at Fastest Pace Since the COVID-19 Pandemic

Chinese stocks saw a significant decline at the close of trading on Wednesday
due to profit-taking and investor disappointment after Beijing authorities failed to announce additional stimulus measures during Tuesday’s meeting. 

The CSI 300 index dropped by 7.05%, or 300 points, closing at 3,955 points,
marking its worst daily decline since February 2020, during the COVID-19 pandemic.
Meanwhile, the Shanghai Composite index fell by 6.62%, or 230 points,

settling at 3,258 points, and the Shenzhen Composite index declined by 8.65%, or 181 points, closing at 1,917 points.

This downturn follows gains of over 5% in Chinese stocks during Tuesday’s session,
as markets reopened after the week-long “Golden Week” holiday.
Tourism sector stocks were among the most brutal hit,
the sector’s index dropped by 8.9% after data showed that
spending during the “Golden Week” holiday had not reached pre-pandemic levels.

 

 

Goldman Sachs Lowers U.S. Economic Recession Forecast

Goldman Sachs has reduced its forecast for the probability
of a U.S. economic recession to 15% over the next twelve months,

based on the stronger-than-expected September labor market data.
The bank also reaffirmed its expectations for the path of interest rate cuts,
anticipating that the U.S. Federal Reserve will continue to reduce interest rates consecutively by 25 basis points,
bringing the final interest rate in the U.S. to between 3.25% and 3.5% by June 2025.

Additionally, Goldman Sachs noted that there is no clear explanation
for the moderation in labor market growth despite the rise in job opportunities,
which coincides with solid GDP growth in the United States.

 

Goldman Sachs Lowers U.S. Economic Recession Forecast

Goldman Sachs: Buying S&P 500 After Declines is Profitable

Goldman Sachs: Buying S&P 500 After Declines is Profitable: A recent study by Goldman Sachs suggests that buying U.S. stocks
After their recent decline, it could be profitable in most cases.
This analysis is based on four decades of data, showing that markets often recover after significant drops.

 

Content

Index Performance

Attractive Buying Opportunities

Global Market Stabilization

Recession Risk

CitiGroup Warning

 

 

 

S&P 500 Performance After Declines

According to Goldman Sachs‘ strategy team, led by David Kostin,
the S&P 500 index has achieved an average return of 6% in the three months following a 5% drop from recent highs since 1980.
The analysis shows that returns were positive in 84% of cases after such declines.
The index had dropped by 8.5% from its peak in July.

 

Attractive Buying Opportunities During Corrections

Kostin noted in a memo that up to 10% of corrections have often provided good buying opportunities,
although the performance after smaller declines may not be as substantial.
However, the team warned that performance after significant declines
could vary depending on economic conditions,
mainly if these corrections occur as part of a pre-recession adjustment.

 

Global Market Stabilization

Global markets saw relative stability on Tuesday,
as some of the indices were hit hardest by concerns over a U.S. recession,
and tech sector valuations rebounded.
Analysts at JPMorgan indicated that institutional investors took advantage of market dips,
purchasing approximately $14 billion worth of stocks during the trading sessions.

 

 

 

Recession Not Yet Priced In

Goldman Sachs’ team noted that the U.S. market is still not factoring in a potential
recession despite growth-sensitive cyclical stocks lagging behind defensive stocks this month.
On a separate note, Goldman strategists predicted further declines in global equities.
However, they do not expect the market to enter a bear market phase,
defined as a 20% drop from recent highs.

 

CitiGroup’s Recession Warning

This week, CitiGroup’s strategy team warned that recession scenarios have not been adequately priced into the market.
In a memo by Beata Manthey, Citi’s strategist, metrics such as stock valuations,
yield curves, and investor sentiment suggest a “buy on weakness” approach.
However, Manthey recommended more caution,
advising investors to wait for clear evidence of a full liquidation of current positions before taking further action.

 

Goldman Sachs: Buying S&P 500 After Declines is Profitable

Hedge funds are betting on the decline of the US dollar

Hedge funds are betting on the decline of the US dollar: Goldman Sachs expected the US dollar to decrease
after the US central bank indicated a reduction in interest rates.
Goldman Sachs made changes to its exchange rate forecasts after the Federal Reserve
indicated its intention to reduce interest rates, according to the analysis on Friday.

 

Content
Expectations of interest rate cuts
Commodity Futures Trading Commission
Currency rates against the dollar
Change Goldman’s forecast

 

 

Expectations of interest rate cuts

The Bloomberg Dollar Index fell by 1.2% last week,
reaching its lowest level in four months after the Federal Reserve decided
to keep interest rates as they are, and the impact of the expectation of an interest rate cut of 75 points in the year 2024.

Goldman Sachs analysts said that, according to their expectations,
the dollar will weaken more than before. Analysts also said that the biggest revisions
to their forecasts were in currencies that are affected by interest rates and that could be affected by the highest interest rates ever,
such as the yen, the Swedish krona, and the Indonesian rupiah.

 

Commodity Futures Trading Commission

Data from the Commodity Futures Trading Commission (CFTC) The combined betting positions on the major currencies
for the week ending last Tuesday resulted in net put contracts worth $26,355.

The biggest shifts were in the yen, as bets on the dollar’s gains against the Japanese currency decreased by more than 20%,
in addition to the British pound, where bets on the dollar’s decline nearly doubled.

Currency rates against the dollar

The yen rose 2% last week against the dollar, while the krone rose 1.9%.
These were the largest gains among the group of ten major currencies,
except the Norwegian krone, which jumped by more than 4% after the central bank suddenly raised the main interest rate on deposits.

 

Change Goldman’s forecast

Goldman expects that the yen price will not change much from 142 yen to the dollar in six months,
which is much stronger than its previous estimate of 155.
It also strengthened expectations for the Australian and New Zealand dollars by at least 9% during the same period.

“We see the greatest ‘room for departure’ from current levels to be in procyclical currencies
(which rises if the economy is strong and falls if the economy is weak)
and should benefit from the Fed loosening its grip on financial conditions and enhancing expectations of a soft landing,” the strategists wrote.
This group includes the British pound, the South Korean won, and the South African rand.

 

Hedge funds are betting on the decline of the US dollar