Goldman Sachs (GS) Offering Possible 40.85% Return Over the Next 16 Calendar Days

Goldman Sachs's most recent trend suggests a bearish bias. One trading opportunity on Goldman Sachs is a Bear Call Spread using a strike $242.50 short call and a strike $247.50 long call offers a potential 40.85% return on risk over the next 16 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $242.50 by expiration. The full premium credit of $1.45 would be kept by the premium seller. The risk of $3.55 would be incurred if the stock rose above the $247.50 long call strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Goldman Sachs is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Goldman Sachs is bullish.

The RSI indicator is at 41.89 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here


LATEST NEWS for Goldman Sachs

PRESS DIGEST – Wall Street Journal – Feb. 4
Tue, 04 Feb 2020 06:58:07 +0000

OPEC+ Officials Meet for Urgent Check of Virus Threat to Oil
Tue, 04 Feb 2020 05:30:30 +0000
(Bloomberg) — OPEC and its allies are gathering for an urgent assessment of how Asia’s coronavirus may hurt oil demand, and what measures they could take in response.Under increasing pressure after crude prices sunk below $50 a barrel for the first time in more than a year, technical experts from the OPEC+ coalition will meet at the cartel’s Vienna headquarters on Tuesday to evaluate the disease’s impact. Fuel consumption in China — the world’s biggest oil importer — appears to have plunged as much as 20% as cities are quarantined and factories halted.The officials’ assessment may help determine whether the 23-nation alliance — which pumps about half the world’s oil — convenes an emergency ministerial meeting later this month to consider new production cuts. Saudi Arabia, OPEC’s biggest member, has been pushing for such a gathering, but has faced some reluctance from Russia.The Organization of Petroleum Exporting Countries and its allies only just started a fresh round of production deeper cutbacks last month, the latest step in a three-year effort to prevent plentiful U.S. shale supplies putting the global market into surplus. But the outlook has deteriorated rapidly in the last few weeks as the coronavirus curbs air traffic and slows China’s economy.“Given oil’s fast and furious fall — and the havoc that it could wreak on government finances across the producer group — it looks like they don’t believe they have the luxury of time,” said Helima Croft, chief commodities analyst at RBC Capital Markets LLC.The next OPEC+ ministerial meeting was already scheduled for early March, but the group is now considering whether to hold that gathering in the next couple of weeks to respond to the crisis. The Joint Technical Committee’s analysis of the market on Tuesday and Wednesday is intended to help address that question.OPEC’s research department in Vienna has prepared nine scenarios with different estimates of how the virus may affect oil consumption, according to a delegate, who asked not to be identified because the information is private.Reluctant RussiaThe average price of crude sold by OPEC members was about $59 a barrel on Monday, far below the levels that most of them need to cover government spending.West Texas Intermediate futures rose as much as 1% on Tuesday, which would be just the second increase since Jan. 17, after settling below $50 on Monday for the first time since January 2019. Goldman Sachs Group Inc. analysts including Damien Courvalin said they see only modest further downside in oil prices as the sell-off has already priced in a larger hit to economic growth than they are expecting.While Riyadh has urged fellow producers to meet and act, there’s so far been a more cautious attitude from its most important partner, Russia. Though not an OPEC member itself, Moscow has proved to be an influential voice since the OPEC+ alliance was established three years ago.Russian President Vladimir Putin and Saudi King Salman bin Abdulaziz discussed the global energy markets by phone Monday evening, the Kremlin said in a statement, adding that both leaders confirmed “readiness to continue cooperation within OPEC+.”Moscow doesn’t face the same budgetary need for elevated oil prices as most OPEC members. Energy Minister Alexander Novak had said last week that the country is prepared to meet this month, and intervene if necessary, though it prefers to continue monitoring the situation.Delegates from both Saudi Arabia and Russia will attend the JTC, which also includes Algeria, Iraq, Kazakhstan, Kuwait, Nigeria and the United Arab Emirates.(Updates with price and analyst comment in 9th paragraph)To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.netTo contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Alexander KwiatkowskiFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Virus Forces the China Car Shutdown Beijing Couldn’t
Mon, 03 Feb 2020 23:00:11 +0000
(Bloomberg Opinion) — Fears that the coronavirus will ravage global supply chains rooted in China are spreading fast. For automakers, a hiatus from production in the world’s largest car market may force them to take some needed rebalancing. Provinces that extended the Lunar New Year holiday period include Guangdong, which accounts for 12.8% of light vehicle production, and Hubei, where the outbreak’s epicenter Wuhan is located. Hubei, in central China, chalks up 9% of Chinese auto production and more than 3.5% of demand. The shutdown will ripple through the supply chain – Hubei is home to hundreds of small- and medium-sized parts suppliers.Already, Toyota Motor Corp. has suspended production of cars in China until at least Sunday. Tesla Inc. has been told to halt work at its Shanghai factory. The disruption in auto parts forced Hyundai Motor Co. to interrupt making its Palisade sport-utility vehicle in South Korea last weekend and it’s considering breaks at other plants.The impact will be significant. If production stops for two weeks in China’s six major regions, output will drop around 8% this quarter, Goldman Sachs Inc. analysts estimate. But it’s worth considering what this actually means for a manufacturing industry that has been running on overdrive, with little incentive to rein in the daily churn.China’s factories have the capacity to make over 60 million vehicles a year. Only a third of that number are sold. Yet carmakers seem unable to, well, stop making cars. Local and central governments have doled out hundreds of millions of dollars in subsidies to build up the industry, encourage different types of cars and incentivize purchases. They have kept too many unsustainable local manufacturers alive. Even as vehicle sales have fallen, the utilization rate  – the ratio of actual output to production capacity —  in the last quarter of 2019 was 78.5%, above the annual 77.3%.China’s auto dealerships were sitting on around $72 billion of unsold inventory last June. That’s around 3 million cars. Many didn't comply with the latest emissions standards. Dealers have steepened price discounts to reduce their backlog. That isn’t a sustainable strategy. In 2018, over half of Chinese dealerships reported losses and 85% didn’t meet manufacturers’ sales targets. An index of inventory levels has remained elevated and above the official warning threshold for two years.A forced shutdown is what the industry needs, even though it employs millions. Until now, mothballing factories hasn’t been an option. Beijing has encouraged consolidation and set out rules to encourage electric vehicles by inhibiting new capacity for conventional cars. Authorities have also imposed measures like restricting car ownership through a lottery-based license plate  system. The automotive sector has never been subjected to supply-side structural reforms in the way that Beijing imposed them on industries like steel and coal. The first step to any turnaround for automakers is to shut down excess operating capacity. In the steel industry, reducing hundreds of millions of tons of capacity gave larger firms better pricing power. Over the past three years, steel prices rose and profitability ticked up. The coronavirus shutdown should force a rethink and prod carmakers to reassess investment and production decisions. Earnings will hurt for the next couple of quarters, but they were looking dismal anyway and margins have been thinning for years. Upgrading plants alone won’t cut it. One lesson from the steel industry is that bigger, better facilities can still mean oversupply.Demand has also been weak. A big turn upward isn’t on the horizon despite Beijing’s incentives for consumers to purchase cars. What buyers there are in this maturing market want luxury vehicles or higher-end family cars; more will be replacing vehicles over the next five years than getting their first car. The virus won’t help. Central China, which will likely feel any aftermath the longest,  accounts for almost a quarter of auto demand. Parallels to earlier big epidemics are hard to draw. During the crisis over Severe Acute Respiratory Syndrome in 2003, China’s carmakers were selling 4 million vehicles a year. Global automakers have a much larger portion of their sales volumes and profits exposed to China now.A shakeout has been overdue, and the virus may only trigger that. Any impulse from Beijing to step in and bolster supply will be misguided — it should stand still and watch what happens when markets are left to their own devices.To contact the author of this story: Anjani Trivedi at atrivedi39@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Coronavirus causes Goldman Sachs to cancel annual partners meeting
Mon, 03 Feb 2020 21:42:26 +0000
Goldman Sachs Group Inc canceled its annual partners meeting scheduled for this week because travel restrictions resulting from the deadly coronavirus outbreak prevented some Asia-based employees from making it to the bank's New York headquarters, according to two people familiar with the plans. Goldman's global partners meeting, an annual week-long event for the firm's roughly 400 most elite employees, was canceled late last week, the people said. Chief Executive Officer David Solomon will instead host a townhall meeting for about 250 of the partners able to attend in New York, one of the people said.

Goldman Sachs and Amazon may soon be in the banking business
Mon, 03 Feb 2020 20:21:40 +0000
US tech giants are looking to expand their reach in financial services—without the burden of becoming a regulated bank.

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