Goldman Sachs’ shares jump ~5% despite Q4 sales miss

Today’s headlines

What’s happening: Shares of Goldman Sachs Group gained on Thursday after the company released its fourth-quarter results.

What happened: One of the biggest US banks and a bellwether of the economy reported a decline in revenues and missed expectations for the latest quarter.

Investors looked past that to Goldman Sachs’ earnings, which topped consensus estimates.

How were the results: The New York-based bank reported a single-digit decline in sales.

• Net revenues fell 3% year-over-year to $13.45 billion, missing consensus estimates of $13.79 billion.
• GAAP earnings came in at $14.01 per share, up from $11.95 per share in the year-ago quarter, and above Wall Street expectations of $11.65 per share.

Why it matters: The performance of Goldman Sachs in the fourth quarter was driven by stock traders trying to capitalise on volatility and a broad rally in the US equity market.

The bank’s equity revenues jumped to a record high of $4.31 billion, climbing from $3.45 billion in the year-ago quarter. Trading revenues for fixed income, currencies, and commodities also surged 12.5% to $3.11 billion.

Lower rates and excess cash resulted in firms pursuing more ‌deals, which helped Goldman Sachs top earnings estimates.

Global Banking and Markets revenue jumped 22% year-over-year to $10.41 billion, driven by a 25% surge in investment banking fees. Asset and Wealth Management revenue came in almost flat at $4.72 billion.

The bank’s expenses surged through 2025, with huge investments in its AI operations and a rise in compensation for salaries and bonuses. Operating expenses surged 18% year-over-year to $9.72 billion.

On January 14, the company’s board raised the quarterly dividend by 50 cents to $4.50 per common share.

“We continue to see high levels of client engagement across our franchise and expect momentum to accelerate in 2026, activating a flywheel of activity across our entire firm,” CEO David Solomon said.

How shares responded: Shares of Goldman Sachs gained 4.6% to close at $975.86 on Thursday following the release of quarterly results. The stock has jumped 10% over the past month.

What to watch: Investors will watch merger activity, which had surged to near record levels last year and the trend is expected to continue in 2026, driven by large AI investments.

The markets today

The New Zealand dollar in focus today ahead of some major economic reports next week

Context: The NZD/USD forex pair rose this morning as investors digested the latest economic data.

Details: Data released this morning showed annual food inflation in New Zealand eased to 4% in December. Inflation eased from the previous month’s 4.4% and was the lowest reading since April 2025.

The BusinessNZ Performance of Manufacturing Index surged to 56.1 in December from 51.4 in the previous month, reaching the highest level since December 2021. All five sub-indexes came in the growth zone during the month. This was driven by new orders, which reached the strongest level since July 2021.

Weakness in the US dollar also lent support to the NZD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged lower to 99.32 this morning.

The NZD/USD pair gained more than 0.1% to 0.5750 this morning, while the S&P/NZX 50 Index rose 0.5% to trade at 13,728.63.

What to watch: Investors await the release of economic data on composite NZ PCI and services NZ PSI on Tuesday. New Zealand’s BusinessNZ Performance of Services Index, which fell to 46.9 in November from 48.4 in the previous month, is expected to rise to 48 in December. Analysts expect New Zealand’s BusinessNZ Performance of Composite Index to surge to 49.6 in December from 48.8 in November.

Data on inflation rate, due to be released next Friday, will also remain in focus. Annual inflation rate in New Zealand, which rose to 3% in the third quarter from 2.7% in the previous period, is expected to accelerate further to 3.1% in the fourth quarter.

Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.60%, 0.26% and 0.32%, respectively.

The news shaping the markets

Russia said that an attack by Ukraine left almost 87,000 people without electricity in Zaporizhi. The news sent the USD/RUB pair higher in forex trading this morning.

Singapore’s non-oil domestic exports rose 6.1% year-over-year in December. This being a significant slowdown from the previous month’s 11.5% surge lent support to the USD/SGD forex pair.

Brazil’s new car sales climbed 17.1% to 279,400 units in December. This being the best monthly reading in 11 years sent the USD/BRL pair lower in forex trading this morning.

What else to watch today

Italy’s inflation rate (1300 UAE Time), India’s foreign exchange reserves (1530 UAE Time), Brazil’s IBC-BR economic activity (1600 UAE Time) and PPI (1600 UAE Time), Russia’s foreign exchange reserves (1700 UAE Time) and inflation rate (2000 UAE Time), Canada’s housing starts (1715 UAE Time) and foreign securities purchases (1730 UAE Time), as well as US NY Fed services activity index (1730 UAE Time), industrial production (1815 UAE Time), capacity utilization (1815 UAE Time), manufacturing production (1815 UAE Time) and NAHB housing market index (1900 UAE Time).