Goldman Sachs Surpasses Profit and Revenue Forecast

LOCAL MARKET COMMENTARY

The Top 40 Index and the All Share Index in South Africa closed down 0.52% on Tuesday, ending at 77,823 and 85,949 points, respectively, as business confidence declined in September due to reduced vehicle and retail sales, along with a drop in building plan values. Despite this, the business sentiment has been positive overall since May's election. The central bank announced a shift in its policy focus toward tracking core inflation and inflation expectations as price pressures ease.

EUROPEAN MARKET COMMENTARY

European stocks ended lower on Tuesday, impacted by declining oil and tech stocks as investors focused on earnings. In the U.K., wages excluding bonuses rose by 4.9% year-over-year from June to August, slightly down from the previous period and aligning with forecasts. Earnings including bonuses fell to a two-year low of 3.8%, possibly supporting a Bank of England rate cut in November, with market odds at 83% for a 25-basis-point reduction. Additional data showed eurozone industrial production, German producer prices, and a revised French inflation rate at 1.4% on a harmonized basis.

US MARKET COMMENTARY

Wall Street's major indexes closed lower on Tuesday, led by a 1% drop in the Nasdaq as chip stocks fell on demand concerns, and the energy sector dropped 3% amid declining oil prices. Earnings were mixed, with some positive financial services results, but UnitedHealth shares slid 8% after forecasting 2025 profits below expectations. Investors are now focused on upcoming earnings and key economic data, such as retail sales and industrial production. Meanwhile, San Francisco Fed President Mary Daly commented that, despite September’s rate cut, efforts to curb inflation are ongoing.

ASIA MARKET COMMENTARY

Most Asia-Pacific markets declined this morning, led by losses in Japan's Nikkei. Investors are awaiting potential stimulus measures from China’s housing ministry, set for a briefing today, to support the real estate sector. In Hong Kong, Chief Executive John Lee will deliver his annual policy address, likely emphasizing economic recovery efforts. Regional economic data included New Zealand's consumer prices index rising 2.2% year-over-year in Q3, matching forecasts, with a 0.6% quarterly increase, just below expectations. South Korea's unemployment rate was slightly up at 2.5% in September, from 2.4% in August.

CURRENCY MARKET COMMENTARY

On Tuesday, South Africa's rand showed minimal movement following the release of the country’s business confidence index and the central bank's bi-annual Monetary Policy Review. The U.S. dollar strengthened against most major currencies on Tuesday, continuing its recent upward trend and reaching over two-month highs. This rise is driven by expectations that the Federal Reserve will implement gradual interest rate cuts over the next 18 months.

COMMODITY MARKET COMMENTARY

Gold prices edged up this morning as U.S. Treasury yields eased, with investors awaiting U.S. economic data to gauge potential interest rate cuts from the Federal Reserve. Meanwhile, oil prices rose slightly in early trade, influenced by uncertainty surrounding the Middle East conflict, following a decline driven by demand concerns in the previous session.

Bytes Group PLC (BYI) -2.11%

In the first half of FY25, the company saw a 13.7% increase in gross invoiced income (GII), rising to £1 230.2 million from £1 081.6 million in H1 FY24. However, revenue slightly declined by 2.9% to £105.5 million. Gross profit increased by 9% to £82.1 million, with the gross margin improving to 77.8% compared to 69.3% last year. Operating profit also rose by 16.3% to £35.6 million, and cash holdings grew by 38.3% to £71.5 million. Earnings per share increased by 19.5% to 12.67 pence, and the interim dividend per share rose by 14.8% to 3.1 pence. Despite a minor dip in revenue, overall performance indicators show positive growth.

AH-Vest Limited (AHL) +0.00%

For the year ending June 30, 2024, the company achieved a 12.2% increase in revenue to R237.1 million, with operating profit nearly doubling to R8.2 million—a 94.9% rise from the previous year. Earnings per share surged by 172% to 3.89 cents, while headline earnings per share increased by 187% to 3.88 cents. The net asset value per share grew by 8.5% to 49.53 cents. Despite these improvements, no dividend was declared for the year, marking a change from the prior year when a dividend of 0.20 cents per share was paid.

Goldman Sachs Group Inc. (GS) -0.07%

Goldman Sachs exceeded third-quarter profit and revenue expectations, reporting earnings of $8.40 per share (above the $6.89 estimate) and revenue of $12.7 billion (compared to the $11.8 billion estimate). Profits surged 45% to $2.99 billion, driven by a 7% revenue increase. Equities trading led with an 18% revenue rise to $3.5 billion, surpassing estimates due to strong derivatives and cash trading performance. While fixed income trading fell 12% to $2.96 billion, it still slightly beat expectations. Investment banking revenue grew 20% to $1.87 billion, supported by debt and equity underwriting. The asset and wealth management division saw a 16% revenue increase to $3.75 billion, thanks to higher management fees and investment gains.

Bank of America Corporation (BAC) +0.55%

Bank of America exceeded third-quarter profit and revenue expectations, reporting earnings of 81 cents per share (above the 77-cent estimate) and revenue of $25.49 billion (slightly above the $25.3 billion estimate). Although net income dropped 12% to $6.9 billion due to higher loan loss provisions and rising expenses, revenue increased slightly as trading, asset management, and investment banking gains offset a decline in net interest income. Fixed income trading rose 8% to $2.9 billion, and equities trading increased 18% to $2 billion, both exceeding forecasts. Investment banking fees grew 18% to $1.4 billion, and net interest income, down 2.9% year-over-year, showed sequential improvement, signalling a potential rebound.

United Airlines Holdings Inc. (UAL) +0.82%

United Airlines announced a $1.5 billion share buyback after surpassing third-quarter earnings expectations, posting adjusted earnings per share of $3.33 (versus the expected $3.17) and revenue of $14.84 billion (slightly above the $14.78 billion estimate). Although net income fell 15% to $965 million, revenue increased by 2.5% year-over-year. United expanded its capacity by 4.1% and saw a positive trend in domestic unit revenue in August and September as flight offerings were adjusted. Corporate revenue rose 13%, premium revenue climbed 5%, and sales of basic economy tickets increased by 20%. The airline forecasts adjusted fourth-quarter earnings between $2.50 and $3.00 per share, up from $2.00 per share a year ago, and above analysts' $2.68 forecast.

Do you prefer a full in-depth report you can read offline? Click here to download the full report.