Goldman Sachs Expected to Report Weak Quarter Amid Challenging Circumstances
Investment bank Goldman Sachs is set to release its latest quarterly results, facing challenging circumstances in the market. The company’s performance will be closely watched as it provides insights into the overall health of the U.S. consumer. Additionally, the market will be monitoring the U.S. retail sales to gauge consumer spending. In other news, County Garden, China’s largest property developer, is nearing a debt default, and oil markets are keeping an eye on Venezuela for potential supply.
Goldman Sachs Faces Potential Disappointment with Weak Earnings
Goldman Sachs is among several major banks reporting their quarterly profits this week. While its peers have exceeded analysts’ estimates, Goldman Sachs is expected to disappoint due to sluggish deal-making and the bank’s withdrawal from a loss-making consumer business. The bank’s commercial real estate assets are likely to be written down, and provisions for losses on credit cards will impact profits. Analysts anticipate a 36% decline in earnings per share compared to the previous year.
U.S. Stock Futures Consolidate Ahead of Earnings Season
U.S. stock futures are marginally lower as investors consolidate after Monday’s gains. The focus this week is on quarterly corporate earnings, with Bank of America and Goldman Sachs set to announce their numbers. Johnson & Johnson and Microsoft are also among the companies reporting earnings this session. Additionally, Tesla has been asked to recall a significant number of vehicles due to a technical issue. Economic data, including retail sales and inflation figures, will also be closely watched.
Uncertainty Surrounds U.S. Retail Sales
There is uncertainty regarding the Federal Reserve’s next interest rate move, especially after the faster-than-anticipated growth of the U.S. economy in September. The upcoming retail sales figures for September will provide insights into consumer spending, a key driver of the economy. Economists expect a modest gain from the previous month, and a stronger-than-expected reading could raise concerns about inflation and potentially impact interest rates.
County Garden Nears Debt Default
China’s largest property developer, County Garden, is approaching a major debt deadline. If the company fails to make a $15 million coupon payment, its entire offshore debt will be considered in default. The non-payment will trigger cross defaults in other bonds as per bond contracts. With significant offshore debts, a default by County Garden could lead to one of China’s largest corporate debt restructurings.
Oil Market Looks to Venezuela for Potential Supply
Oil prices stabilize as the market anticipates potential easing of sanctions on Venezuelan oil exports by the U.S., which could alleviate global supply constraints. Talks between the Venezuelan government and the opposition may result in Washington relaxing its sanctions. The Middle East conflict and its potential impact on oil supplies from major producers like Saudi Arabia, Iran, and the United Arab Emirates also influence oil market dynamics.
