Latest news with #Waldron
Business Insider
4 days ago
- Business
- Business Insider
Goldman Sachs is pulling back risk as it braces for more fallout from 'disruptive policy' shifts: COO
Goldman Sachs is battening down the hatches as it braces for a wave of volatility resulting from disruptive policy changes in Washington. "I would say, at the moment, we're relatively defensively positioned," the bank's President and COO, John Waldron, said at a conference on Thursday. "We've got heavy liquidity. We've got significant capital buffers. And we're running more muted risk in certain and important pockets in the firm." Trump's tariffs and trade war pronouncements have roiled markets in recent weeks, exposing Wall Street to more stressors than many traders and dealmakers anticipated when the former New York businessman returned to power earlier this year. On Thursday, Waldron said tariffs are just one piece of the puzzle — and no longer as concerning as they were when they were rolled out. "We're moving, as we said, towards more manageable tariff levels," Waldron said, adding, "I think we're likely to avoid a recession with this baseline set of facts." Even if the president's tariff wars are quickly resolved, the barrage of seismic policy shifts will likely continue, he said. "The Trump administration is definitely disrupting a lot of what would be the conventional wisdom of how US policymaking traditionally goes," he said at the annual Bernstein Strategic Decisions conference in New York. "You see first-order impacts right in front of you," he said, referring to the tariffs. "The second- and third-order impacts take longer to work their way through markets. And so we're watching carefully for the second- and third-order impacts, which is another reason why we run a little bit higher buffer and a little bit more cautiously in an environment like this." "So we're going to learn a lot more, and it's going to be volatile," he said. "I think we're just got to live with that volatility for some time." Waldron pointed to two cues that the firm is watching. The first, he said, is leverage in the public sector. Governments have much less wiggle room to inject stimulus into battered economies to maneuver out of tough fiscal positions, diminishing their ability to fend off economic shocks. "I think coming out of COVID, the public sector stimulus from governments around the world to rejuvenate the economy was really, really important," he said. "We're starting to see some elements of that public sector leverage play through. There's a lot less fiscal headroom in the world today than there was back when we were coming through COVID and a pretty peaceful environment." He also pointed to something the firm is terming "lowflation" — that is, its forecast that, because of tariffs, the US should ready itself for "short- to immediate-term slower growth" and "higher inflation." He said Goldman's research showed that the best case scenario for effective tariffs would be between 10% to 15%, still a significant uptick from pre-Trump administration levels. In good news, Waldron said that US consumers had continued to exhibit "tremendous resilience" in the face of these headwinds, and that the firm's pipeline of forthcoming transactions remained strong. "Not surprisingly, the second quarter is not quite as strong from an activity level as the first quarter, given the macro environment we talked about at the beginning of this conversation," he said, adding, "But in investment banking, our engagement levels are actually still very good despite the uncertainty and the volatility our pipelines remain quite strong." "When you have this kind of volatility," he said, "you just fundamentally have a harder time prosecuting transactions that may be in your pipeline."
CNBC
4 days ago
- Business
- CNBC
Why the stock rally fizzled — plus, our latest thinking on Goldman and Bristol Myers
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks rose modestly Thursday but were well off their highest levels of the session. The strong quarter from Club name Nvidia is lifting the broader artificial intelligence trade. As we explained in our earnings commentary Wednesday night, four positive developments have gone Nvidia's way since its annual GTC event in March, fueling additional momentum in its business. The market also got a brief boost after the U.S. Court of International Trade ruled President Donald Trump doesn't have the authority to impose "reciprocal" tariffs on virtually every nation. However, the path forward for this case is unclear, which is why the market's initial gains on the news didn't last. The Trump administration plans to take the case to the Supreme Court on Friday. Tariffs can still be imposed through alternative ways. For example, sector-specific tariffs remain an option, and the president can still invoke Section 232 to impose trade restrictions on the grounds of national security. Bank update: Goldman Sachs President and Chief Operating Officer John Waldron spoke at the Bernstein Strategic Decision Conference on Thursday. Shares were down on the session, underperforming the broader financial sector. The line that may have hit the stock was Waldron explaining that investment banking activity in the second quarter has not been as strong as in the first quarter. It's hard to get deals over the finish line in a highly volatile, uncertain environment like the market dealt with in April. "When you have this kind of volatility, you just fundamentally have a harder time prosecuting transactions that may be in your pipeline, but they don't happen as quickly as you might otherwise expect," Waldron said at the conference. Nobody should have been surprised by Waldron's comments. Peers have said similar things. For example, on May 19, we pointed out that JPMorgan said it expected investment banking fees in the second quarter to be down by a mid-teen percentage year over year. There are two other things to keep in mind: While volatility is bad for mergers-and-acquisition activity, as well as initial public offerings, it is a great thing for Goldman's trading desk. Waldron said Thursday that equity trading client activity has "remained robust" throughout the year, though levels for fixed income, currencies, and commodities (FICC) are now "slightly softer" than the company's strong results this time last year. FICC revenue increased 17% year-over-year in the second quarter of 2024. There has also been a significant pickup in capital markets activity over the past few weeks. We recently highlighted fresh signs of life in the initial public offering (IPO) market. More companies are filing to go public, including Omada Health, expected next week , targeting a market cap of slightly more than $1 billion. Goldman is involved in the Omada deal. This follows last week's IPOs of Hinge Health and MNTN . We're also starting to see more mergers and acquisitions (M & A), with a notable one this week from Club name Salesforce , which agreed to buy Informatica for $8 billion. With one month remaining in the second quarter, we expect muted investment bank fee growth when the banks report earnings in mid-July. However, a stronger second half for Goldman Sachs should be in store, provided the current pause in high tariffs remains in place. Cobenfy comments: Bristol Myers Squibb CEO Chris Boerner tried to assuage investor concerns about the company's key schizophrenia drug, Cobenfy, on Thursday. During the Wall Street Journal's Future of Everything conference, Boerner came to Cobenfy's defense after it failed a key late-stage trial in April that evaluated how it worked when used as an add-on treatment. He argued Thursday that the results "don't have really any impact on the long-term potential" of Cobenfy, explaining the focus has always been to use the drug as a primary treatment. "What we like about Cobenfy is we're seeing efficacy on par with, if not better than, all the existing therapies, but without some of the really onerous side effects," Boerner added, citing impacts from other treatments like significant weight gain. While this was welcomed commentary, the company argued a similar case when it reported earnings in late April. The surprising adjunctive trial result turned what we thought was a straightforward story of a drug with underappreciated potential into a more complicated "show me" situation. And what we need to be shown is better Cobenfy data in future trial readouts. That's why we haven't bought back any of the stock we sold in the low $60s a share earlier this year, as Jim Cramer explained on the Monthly Meeting last week. The stock was up about 1% to around $47 per share Thursday. Asked about the potential for pharmaceutical-specific tariffs, Boerner said that Bristol Myers would prefer the Trump administration take a different direction. But he added he's tried to communicate ways to "do it without messing things up." Whatever the Trump administration does, they have to recognize the "reality of the dynamics of biopharmaceutical manufacturing," he offered. "If you don't get that right, you will end up with supply constraints, and that's something nobody wants, including the administration. Incidentally, it's also why typically when you've had tariffs, pharmaceutical and biotech products have been excluded." Up next: It's another big night of earnings ahead with Club name Costco , Marvell Technology and Dell Technologies scheduled to report. Other companies reporting are Gap , American Eagle Outfitters , Ulta Beauty and Zscaler . There are no major earnings reports after Friday's close. On the data side Friday morning, we get the Federal Reserve's preferred inflation gauge — the personal consumption expenditures price (PCE) index. According to FactSet, PCE is expected to have risen 0.15% month over month in April and 0.12% on a core basis, which excludes volatile food and energy prices. That would mean increases in the headline index and the core of 2.5% and 2.2% year over year, respectively, marking slightly cooler readings than in March. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Yahoo
4 days ago
- Business
- Yahoo
Goldman Sachs says deal outlook is good, but timing is uncertain
By Tatiana Bautzer NEW YORK (Reuters) -Goldman Sachs President John Waldron said on Thursday that the outlook for investment banking remains "quite good." The bank's pipeline for deals worldwide is strong despite uncertainty over timing as U.S. tariff policies roil markets and stall activity, he told investors at a conference. "Our investment banking business is very strong, and I think the outlook remains quite good," Waldron said. "The pipeline is strong all over the world... but as we've already said, the element of volatility makes it hard" to predict when deals will materialize. Corporate clients have a positive bias toward transactions and are still holding discussions about mergers, acquisitions and raising capital, Waldron said. Despite a broader slump in M&A, he cited a 30% increase in large deals valued at more than $500 million in the year to date as evidence of the market's resilience. "Obviously in the second quarter it's been much slower than in the first... Nonetheless, even post-Liberation Day, we've worked on a number of very sizeable, important M&A transactions." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Recorder
14-05-2025
- Business
- Business Recorder
Goldman Sachs says investors trim dollar holdings, return to neutral position on US
NEW YORK: Goldman Sachs President John Waldron said a recent lightening up of U.S. dollar assets by investors had shown them returning to more neutral positions on the currency, rather than a wholesale 'run for the gates.' Financial markets have witnessed a roller-coaster ride in the initial few months of the Trump administration as its April 2 move to increase tariffs on trading partners prompted some investors to move away from American assets. The White House has since made progress on tariff deals. Waldron said that some investors 'that were owning 10%, 20%, 30% more U.S. dollars in U.S. assets than they would otherwise be holding' had gone back to a more neutral position. Waldron said investors had been optimistic about the U.S. outperforming the rest of the world. 'Everybody, for the most part, had some expression of overweight U.S.,' he said. But after the tariff announcement, clients had been active repositioning portfolios in currencies, Waldron said. 'The lightening up (of dollar holdings) we've seen (since April 2) is more the excess coming out, not a wholesale run for the gates,' Waldron told Reuters in an interview. Goldman Sachs' profit jumps as traders deliver gains 'Is there a sense that the volatility of U.S. policymaking is higher, and therefore we should be reducing our holdings? We haven't seen that yet.' Waldron, 55, was added to Goldman's board of directors earlier this year, a few weeks after he was given a retention bonus, cementing his position as a potential successor to CEO David Solomon. Truce The recent truce in the U.S.-China trade war has since set off a relief rally in stocks and propelled the dollar higher with the S&P 500 and the Nasdaq recovering losses since April 2 - or 'Liberation Day' - when President Donald Trump announced sweeping reciprocal tariffs. 'The market is – I'd call it relatively benign in the context of what was going on,' Waldron said. Waldron said that there was demand from investors for access to Chinese equities and fixed income products, and said that American firms were able to operate in China despite challenges. 'I wouldn't overstate the challenges between the two governments in terms of our ability to operate,' said Waldron. 'We can operate. The American firms are operating.' Waldron said most companies are trying to figure out how to navigate the impact of relatively higher tariffs from a cost standpoint. 'How much of this are we going to … pass through on price? How much of this are we going to push back on our suppliers? Who's going to bear the brunt of these tariffs? And the answer is it will be shared,' he said. He said the tariff moves have also affected mergers and acquisitions, halting fresh dealmaking. 'If you were working on an M&A transaction, you were getting started on it or you were getting into it, you're probably pausing it,' he said. 'If you were at the five-yard line and you were getting close to announcing it and it's not overly impacted by tariffs, you're probably going to go ahead and do it, and we've seen both.' Goldman Sachs is advising Hong Kong conglomerate CK Hutchison, sources previously told Reuters. The firm is selling most of the $22.8 billion ports business to U.S. firm BlackRock, including assets it holds along the Panama Canal. The number of M&A contracts announced across the world – an indicator of global economic health - fell in April to the lowest level in more than 20 years, according to data compiled by Dealogic for Reuters.
Yahoo
14-05-2025
- Business
- Yahoo
Goldman Sachs says investors trim dollar holdings, return to neutral position on US
By Saeed Azhar and Megan Davies NEW YORK (Reuters) -Goldman Sachs President John Waldron said a recent lightening up of U.S. dollar assets by investors had shown them returning to more neutral positions on the currency, rather than a wholesale "run for the gates." Financial markets have witnessed a roller-coaster ride in the initial few months of the Trump administration as its April 2 move to increase tariffs on trading partners prompted some investors to move away from American assets. The White House has since made progress on tariff deals. Waldron said that some investors "that were owning 10%, 20%, 30% more U.S. dollars in U.S. assets than they would otherwise be holding" had gone back to a more neutral position. Waldron said investors had been optimistic about the U.S. outperforming the rest of the world. "Everybody, for the most part, had some expression of overweight U.S.," he said. But after the tariff announcement, clients had been active repositioning portfolios in currencies, Waldron said. "The lightening up (of dollar holdings) we've seen (since April 2) is more the excess coming out, not a wholesale run for the gates," Waldron told Reuters in an interview. "Is there a sense that the volatility of U.S. policymaking is higher, and therefore we should be reducing our holdings? We haven't seen that yet." Waldron, 55, was added to Goldman's board of directors earlier this year, a few weeks after he was given a retention bonus, cementing his position as a potential successor to CEO David Solomon. TRUCE The recent truce in the U.S.-China trade war has since set off a relief rally in stocks and propelled the dollar higher with the S&P 500 and the Nasdaq recovering losses since April 2 - or "Liberation Day" - when President Donald Trump announced sweeping reciprocal tariffs. "The market is -- I'd call it relatively benign in the context of what was going on," Waldron said. Waldron said that there was demand from investors for access to Chinese equities and fixed income products, and said that American firms were able to operate in China despite challenges. "I wouldn't overstate the challenges between the two governments in terms of our ability to operate," said Waldron. "We can operate. The American firms are operating." Waldron said most companies are trying to figure out how to navigate the impact of relatively higher tariffs from a cost standpoint. "How much of this are we going to ... pass through on price? How much of this are we going to push back on our suppliers? Who's going to bear the brunt of these tariffs? And the answer is it will be shared," he said. He said the tariff moves have also affected mergers and acquisitions, halting fresh dealmaking. "If you were working on an M&A transaction, you were getting started on it or you were getting into it, you're probably pausing it," he said."If you were at the five-yard line and you were getting close to announcing it and it's not overly impacted by tariffs, you're probably going to go ahead and do it, and we've seen both." Goldman Sachs is advising Hong Kong conglomerate CK Hutchison, sources previously told Reuters. The firm is selling most of the $22.8 billion ports business to U.S. firm BlackRock, including assets it holds along the Panama Canal. The number of M&A contracts announced across the world - an indicator of global economic health - fell in April to the lowest level in more than 20 years, according to data compiled by Dealogic for Reuters.
