Wall Street's big banks rake it in
Goldman Sachs and Citigroup both posted better-than-expected profits. That may not do much for folks on Main Street, though.
Net income at New York-based Goldman in the last quarter rose 7% to $2.26 billion, or $4.29 per share. Revenue rose 1% to $10.1 billion. Those results exceeded analysts' expectations for a profit of $3.88 per share on sales of $9.64 billion.
Citigroup, also based in New York, reported net income of $3.81 billion, or $1.23 per share, on revenue of $20.4 billion, an increase of 3%. Analysts' had forecast earnings of $1.17 per share on sales of $20.11 billion. JPMorgan Chase (JPM) also posted better-than-expected results from the latest quarter.
Both Goldman and Citi had several highlights. Goldman reported investment banking revenue of $1.57 billion in the current quarter, a gain of 36% as demand for its underwriting business jumped. Revenue in Citigroup's capital markets business rose 31% to $6.98 billion, helped by its strength in international markets. Goldman and Citigroup also benefited from cost cutting.
Whether Wall Street's rising tide will lift the boats on Main Street remains to be seen. Economic signals, for now, are painting a pessimistic picture. As the The New York Times noted, the International Monetary Fund today cut its estimates for global economic growth. Target (TGT), the second-largest retailer behind Wal-Mart (WMT), today warned that that first-quarter results would be worse than expected because of colder-than-normal weather.
Data from the National Federation of Independent Business show that owners of small businesses are less confident about the economy than they have been in recent months. And U.S. consumer confidence tumbled in March after the automatic government spending cuts known as the sequester were triggered.
Although the benefits of the Wall Street resurgence could trickle down to ordinary folks, it may take a while for that to happen.
Jonathan Berr owns a small stake in Target. Follow him on Twitter @jdberr.
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[BRIEFING.COM] The major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.
Market participants went into today's session expecting to hear some new insight from Fed Chair Janet Yellen, who delivered the keynote address at this year's Jackson Hole Symposium. Unfortunately, the ... More
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