Wall Street Journal
Goldman leads rally
“The prospect of rising interest rates after Georgia’s Senate runoff elections
Most notably, Goldman Sachs’ stock price “closed at a record for the first time in nearly three years, a sign of how much the bank has profited from the financial chaos of the past year. Its stock has risen about 19% over the past month, far more than any of its five big-bank peers. Shares of the bank, which reports earnings later in the month, rose 5.4%, or $14.62, on Wednesday, topping its 2018 high. Goldman’s stock [has] outperformed most of its peers in 2020 and into 2021.”
“Goldman shares had been static for years, a perpetual concern for Chief Executive David Solomon. The pandemic pushed many of [its] challenges aside. It spurred roller-coaster markets that lifted its traditional sales-and-trading business. Then, as markets bounced back, its bankers made money helping corporate clients sell debt and equity.”
Bond yields rise
One of the reasons for the rally in bank shares was the rise in interest rates, which is generally positive for bank profits. “The yield on the benchmark 10-year U.S. Treasury note
“Yields started climbing Tuesday evening as early returns from Georgia’s two elections showed promising signs for the Democratic candidates. Wins in both races effectively give Democrats 51 votes in the Senate—when counting the tiebreaking vote of Vice President-elect Kamala Harris —an outcome that many investors think could herald greater spending on pandemic-relief efforts and other Democratic priorities such as infrastructure projects. Democrats will also control the White House and the House of Representatives once President-elect Joe Biden is sworn in on Jan. 20.”
Elsewhere
Sweetening the deal
“Italy is working on a plan to take on about 14 billion euros ($17 billion) of UniCredit’s impaired loans to
“The plan is part of measures being readied by the Treasury in order to press ahead with the sale of MPS, whose plight has come to symbolize Italy’s long-running banking crisis.”
