Unusual Options Activity Thur 12/14/23

The following options are exhibiting notable trading, potentially indicating changing sentiment toward the underlying stocks, and/or potentially representing positioning for increased volatility.

Bullish Call Activity:

• GS Dec 385 calls (volume: 8140, open int: 2, implied vol: ~35%, prev day implied vol: 28%). Underlying stock is higher by 6%. Co is confirmed to report earnings January 16 before the open.
  
• CG Jan24 45 calls (volume: 2640, open int: 0, implied vol: ~29%, prev day implied vol: 22%). Underlying stock is higher by 7%. Co is expected to report earnings early February.
• INFY Jan24 19 calls (volume: 1670, open int: 0, implied vol: ~27%, prev day implied vol: 22%). Underlying stock trading higher by 5%.

Bearish Put Activity:

• SEDG Dec 91 puts (volume: 2390, open int: 3, implied vol: ~127%, prev day implied vol: 61%). Underlying stock trading higher by 16%. Co is expected to report earnings mid-February.
• BHC Jan24 6 puts (volume: 9040, open int: 0, implied vol: ~77%, prev day implied vol: 67%). Co is expected to report earnings late February.
  

Sentiment: The CBOE Put/Call ratio is currently: 1.01, VIX: (12.36, +0.17, +1.4%).
December 15 is options expiration -- the last day to trade December equity options.

GreenSky (GSKY) to be acquired by Goldman Sachs (GS) for $12.11/share

• "Buy now pay later" fintech 
• As Goldman explained it, GreenSky has a network of more than 10,000 merchants and has provided financing solutions for about 4 million borrowers. Acquiring GreenSky will help Goldman expand its presence in a key element of its consumer business.

GreenSky confirms acquisition by Goldman Sachs (GS) for $12.11/share in stock

• Goldman will acquire GreenSky in an all-stock transaction valued at approx. $2.24 billion.
• GreenSky stockholders will receive 0.03 shares of common stock of Goldman Sachs for each share of GreenSky Class A common stock. This represents a per share price for GreenSky Class A common stock of $12.11.
• The transaction is anticipated to close in Q4.

=Goldman Sachs (GS) reported earnings on Tue 15 Oct 2019 (b/o)

Goldman Sachs misses by $0.10, reports revs in-line

Reports Q3 (Sep) earnings of $4.79 per share, excluding non-recurring items, $0.10 worse than the S&P Capital IQ Consensus of $4.89; revenues fell 3.8% year/year to $8.32 bln vs the $8.33 bln S&P Capital IQ Consensus.

RoE 9.0%; RoTCE 9.5%.

Trading Revenue $3.29 bln, expectations approximately $3.17 bln

• FICC Revenue $1,41 bln
• Equities $1.88 bln

Net revenues in Financial Advisory were $716 million, 22% lower compared with a strong third quarter of 2018, reflecting a decrease in completed mergers and acquisitions transactions.

Net revenues in Underwriting were $971 million, 9% lower than the third quarter of 2018, due to lower net revenues in equity underwriting, reflecting a significant decline in industry-wide initial public offerings, and in debt underwriting, reflecting a decrease in industry-wide leveraged finance transactions.

Provision for credit losses was $291 million for the third quarter of 2019, 67% higher than the third quarter of 2018 and 36% higher than the second quarter of 2019. The increase compared with the third quarter of 2018 primarily reflected higher impairments.

Earnings season: Money Center Q2 Recap

The table below provides a recap of the Q2 earnings season for the six major money center banks. The Book Value per Share, Tangible Book Value per Share, and three month change has been updated to reflect today's prices.

2Q19 Results	MS	JPM	BAC	WFC	C	GS
RoE	12.1%	16.0%	11.6%	13.2%	10.1%	11.1%
RoTCE	13.8%	20.0%	16.2%	15.7%	11.9%	11.7%
Rev Growth (Y/Y)	-3.4%	4.0%	2.0%	0.0%	2.0%	-2.0%
Net Income Growth	-1.0%	16.0%	8.0%	-3.0%	7.0%	-6.0%
TBVPS/Price	1.09x	1.95x	1.53x	1.45x	0.96x	0.99x
BVPS/Price	0.93x	1.57x	1.15x	1.10x	1.12x	1.04x
Trading Revs (Bln)	$3.30	$6.39	$3.20	N/A	$4.67	$3.48
Equity Trading (Bln)	$2.13	$1.73	$1.10	N/A	$0.79	$2.01
Equity (Y/Y)	-14%	-12%	-13%	N/A	-9%	6%
FICC Trading (Bln)	$1.39	$3.69	$2.10	N/A	$3.32	$1.47
FICC (Y/Y)	-18%	-3%	-8%	N/A	8%	-13%
3-month Return	-3%	1%	0%	9%	-3%	-4%
Forward P/E	8.4X	10.8x	9.5x	9.5x	8.5x	9.1x
NIM	N/A	2.49%	2.44%	2.82%	2.67%	N/A
Loan Growth Y/Y	N/A	2%	4%	1%	3%	10%

Earnings this week : Oct 14 - 18, 19 (wk 42)

Monday (October 14)

• None

COLUMBUS DAY: In honor of the holiday, US bond markets and the Federal Reserve Bank will be closed on Monday, October 14, 2019. Stock, options, and futures markets will be open.

Tuesday (Oct 15)

• Morning: APHA BLK C FRC GS JNJ JPM OMC PLD SCHW UNH WFC WIT
• Afternoon: HWC JBHT PNFP SNBR UAL

Wednesday (Oct 16)

• Morning: ABT  ALLY ASML BAC BK CBSH CMA FHN PGR PNC USB
• Afternoon: AA CATY CCI CCK CNS CSX EGBN IBM KMI LLNW NFLX SLG STLD TBK TCBI UMPQ URI WTFC

Thursday (Oct 17)

• Morning: BBT BMI DOV ERIC EWBC FNB GPC GTLS HOMB HON HTLD IIIN KEY MS MTB PM POOL PPG SASR SNA SON STI TSM TXT UNP WNS
• Afternoon: BDN ETFC EXPO FFBC ISRG MRTN OZK PBCT TEAM WAL WDFC

Friday (Oct 18) 

• Morning: ABCB AXP CFG GNTX IBKC KO KSU MAN SLB STT SXT SYF

Notable earnings reports:

• JPMorgan (JPM), Johnson & Johnson (NYSE:JNJ), UnitedHealth Group (NYSE:UNH), Goldman Sachs (NYSE:GS), Wells Fargo (WFC), Citigroup (C), United Continental (NASDAQ:UAL), Charles Schwab (NYSE:SCHW) and BlackRock (NYSE:BLK) on October 15; 
• Netflix (NASDAQ:NFLX), IBM (NYSE:IBM), Bank of America (NYSE:BAC), Kinder Morgan (NYSE:KMI) and Abbott Laboratories (NYSE:ABT) on October 16; 
• Philip Morris International (NYSE:PM), Morgan Stanley (NYSE:MS) and Union Pacific (NYSE:UNP) on October 17; Coca-Cola (NYSE:KO), American Express (NYSE:AXP), State Street (NYSE:STT) and Gentex (NASDAQ:GNTX) on October 18.

=Goldman Sachs (GS) reported earnings on Wed 16 Jan 2019 (b/o)

Goldman Sachs beats by $1.26, beats on revs; RoE 12.1%; Increases reservse for litigation expenses

• Reports Q4 (Dec) earnings of $6.04 per share, $1.26 better than the S&P Capital IQ Consensus of $4.78; revenues fell 0.5% year/year to $8.08 bln vs the $7.48 bln S&P Capital IQ Consensus.
• Return on average common shareholders' equity (ROE) was 13.3% for 2018 and annualized ROE was 12.1% for the fourth quarter of 2018. Return on average tangible common shareholders' equity (ROTE) was 14.1% for 2018 and annualized ROTE was 12.8% for the fourth quarter of 2018.
• Net revenues in Investment Banking were $2.04 billion for the fourth quarter of 2018, 5% lower than the fourth quarter of 2017 and 3% higher than the third quarter of 2018.
• Net revenues in Institutional Client Services were $2.43 billion for the fourth quarter of 2018, 2% higher than the fourth quarter of 2017 and 22% lower than the third quarter of 2018.
  • Net revenues in FICC Client Execution were $822 million, 18% lower than the fourth quarter of 2017, reflecting significantly lower net revenues in credit products and lower net revenues in interest rate products. Net revenues in commodities, currencies and mortgages were essentially unchanged. During the quarter, FICC Client Execution operated in an environment characterized by challenging market conditions, including wider credit spreads, compared with the third quarter of 2018.
  • Net revenues in Equities were $1.60 billion, 17% higher than the fourth quarter of 2017, primarily due to significantly higher net revenues in equities client execution compared with a challenging prior year period. This increase reflected significantly higher net revenues in cash products, while net revenues in derivatives were essentially unchanged.
• Operating expenses were $5.15 billion for the fourth quarter of 2018, 9% higher than the fourth quarter of 2017 and 8% lower than the third quarter of 2018. The increase in operating expenses compared with the fourth quarter of 2017 primarily reflected significantly higher net provisions for litigation and regulatory proceedings.
  • Net provisions for litigation and regulatory proceedings for the fourth quarter of 2018 were $516 million compared with $9 million for the fourth quarter of 2017.

Earnings this week : Jan 14 - 18, 19 (wk 3)

Corporate profits will take center stage when fourth quarter earnings season kicks off this week.

The SEC allows companies a larger window to file their annual reports relative to quarterly updates. As a result, we will see preannouncements throughout January and fourth quarter earnings season will drag on into March.

This week, the big banks will dominant the corporate earnings newsflow.

Monday (Jan 14)    

• Morning: C SJR

Tuesday (Jan 15)

• Morning: DAL FRC INFO JPM SNV UNH WFC
• Afternoon: FULT PNFP UAL

Wednesday (Jan 16)

• Morning: BAC BLK BK CMA GS PNC SCHW USB WAFD
• Afternoon: AA CSX EGBN FUL HWC KMI PLXS

Thursday (Jan 17)

• Morning: BBT CBSH FAST HOMB IIIN KEY MS MTB MTG PPG SASR SBNY TSM WNS
• Afternoon: AXP JBHT NFLX OZK PBCT PRGS TEAM

Friday (Jan 18)

• Morning: CFG FHN KSU RF SLB STI STT VFC

==Barron's : Goldman Sachs is regaining its touch

"How Goldman Sachs Is Regaining Its Touch" — Barron's cover story by Jack Hough:

• "As with other big corporations, Goldman could benefit from the Trump administration’s lighter regulatory touch. It will definitely gain from a deep cut to corporate taxes and full access to overseas cash, even if the firm must mark down some tax assets and pay a one-time repatriation tax."
• "More significantly, when trading conditions improve, FICC [fixed income, currency, and commodities] could bounce back quickly."
• Why it matters: "No one else is as poised as Goldman to profit."
• "With trading humbled, the firm is more diversified than it was before the financial crisis. And it is becoming more prosperous, as it expands in mergers, lending, and money management; buys back stock; and invests in technology."
• "Whether improvements come from external conditions, organic growth, or a mix of the two, the conversation could quickly shift from Goldman’s fall from past trading glory to its relative value."

-=Goldman Sachs (GS) reported earnings on Tue 17 Oct 2017 (b/o)

Goldman Sachs beats by $0.86, beats on revs

• Reports Q3 (Sep) earnings of $5.02 per share, $0.86 better than the Capital IQ Consensus of $4.16; revenues rose 2.0% year/year to $8.33 bln vs the $7.59 bln Capital IQ Consensus.
  • Annualized return on average common shareholders' equity (ROE) was 10.9% for the third quarter of 2017;
• Investment Banking
  • Net revenues in Investment Banking were $1.80 billion for the third quarter of 2017, 17% higher than the third quarter of 2016 and 4% higher than the second quarter of 2017.
  • Net revenues in Financial Advisory were $911 million, 38% higher than the third quarter of 2016, reflecting an increase in completed mergers and acquisitions.
  • Net revenues in Underwriting were $886 million, essentially unchanged compared with the third quarter of 2016, as slightly higher net revenues in debt underwriting, reflecting higher net revenues from investment-grade activity, were largely offset by lower net revenues in equity underwriting, reflecting a decrease in industry-wide offerings.
• Institutional Client Services
  • Net revenues in Institutional Client Services were $3.12 billion for the third quarter of 2017, 17% lower than the third quarter of 2016 and 2% higher than the second quarter of 2017.
  • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.45 billion for the third quarter of 2017, 26% lower than the third quarter of 2016, due to significantly lower net revenues in commodities, interest rate products and credit products and lower net revenues in currencies, partially offset by higher net revenues in mortgages.
  • Net revenues in Equities were $1.67 billion for the third quarter of 2017, 7% lower than the third quarter of 2016, primarily due to lower net revenues in equities client execution, reflecting significantly lower results in derivatives, partially offset by higher results in cash products.
• Investing & Lending
  • Net revenues in Investing & Lending were $1.88 billion for the third quarter of 2017, 35% higher than the third quarter of 2016 and 19% higher than the second quarter of 2017.
• Expenses
  • Operating expenses were $5.35 billion for the third quarter of 2017, essentially unchanged compared with both the third quarter of 2016 and the second quarter of 2017.
• Book value per common share was $190.73 and tangible book value per common share was $180.42, both based on basic shares of 393.7 million as of September 30, 2017.

Goldman Sachs (GS) reported earnings on Tue 18 Apr 2017 (b/o)

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 ** one month later **

Goldman Sachs misses by $0.04, misses on revs; Raises dividend to $0.75 from $0.65:

• Reports Q1 (Mar) earnings of $5.15 per share, $0.04 worse than the Capital IQ Consensus of $5.19; revenues rose 26.6% year/year to $8.03 bln vs the $8.33 bln Capital IQ Consensus.
  • RoE was 11.4%.
• Investment Banking
  • Net revenues in Investment Banking were $1.70 billion for the first quarter of 2017, 16% higher than the first quarter of 2016 and 15% higher than the fourth quarter of 2016.
  • Net revenues in Financial Advisory were $756 million, 2% lower than the first quarter of 2016.
  • Net revenues in Underwriting were $947 million, 37% higher than the first quarter of 2016, due to significantly higher net revenues in equity underwriting.
  • The firm's investment banking transaction backlog decreased compared with both the end of 2016 and the end of the first quarter of 2016.
• Institutional Client Services
  • Net revenues in Institutional Client Services were $3.36 billion for the first quarter of 2017, 2% lower than the first quarter of 2016 and 7% lower than the fourth quarter of 2016.
  • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.69 billion for the first quarter of 2017, essentially unchanged compared with the first quarter of 2016, reflecting significantly higher net revenues in mortgages and higher net revenues in interest rate products, offset by significantly lower net revenues in commodities and currencies and lower net revenues in credit products.
  • Net revenues in Equities were $1.67 billion for the first quarter of 2017, 6% lower than the first quarter of 2016, due to lower net revenues in commissions and fees, reflecting lower volumes in the United States, and lower net revenues in securities services, primarily reflecting the impact of changes in the composition of customer balances.
• Investing & Lending
  • Net revenues in Investing & Lending were $1.46 billion for the first quarter of 2017, significantly higher than the first quarter of 2016 and essentially unchanged compared with the fourth quarter of 2016.
• Investment Management
  • Net revenues in Investment Management were $1.50 billion for the first quarter of 2017, 12% higher than the first quarter of 2016 and 7% lower than the fourth quarter of 2016. The increase in net revenues compared with the first quarter of 2016 was primarily due to higher incentive fees and higher management and other fees.
• Expenses
  • Operating expenses were $5.49 billion for the first quarter of 2017, 15% higher than both the first quarter of 2016 and the fourth quarter of 2016.
  • Non-compensation expenses were $2.20 billion for the first quarter of 2017, 5% higher than the first quarter of 2016 and 6% lower than the fourth quarter of 2016.
• Book value per common share was $184.98 and tangible book value per common share was $175.05, both based on basic shares (10) of 409.3 million as of March 31, 2017.
• On April 17, 2017, the Board of Directors of The Goldman Sachs Group, Inc. (Board) increased the firm's quarterly dividend to $0.75 per common share from $0.65 per common share.

Goldman Sachs (GS) reported 4Q earnings on Wed 20 Jan 2016 (before open)

** charts before earnings **

 

** charts after earnings **

 

Goldman Sachs reports Q4 (Dec) results, beats on revs :

• Reports Q4 (Dec) earnings of $4.68 per share, may not be comparable to the Capital IQ Consensus of $3.62; revenues fell 5.5% year/year to $7.27 bln vs the $7.04 bln Capital IQ Consensus.
  • Diluted earnings per common share were $1.27 compared with $4.38 for the fourth quarter of 2014 and $2.90 for the third quarter of 2015. During the fourth quarter of 2015, the firm recorded provisions for the settlement with the RMBS Working Group (1) of $1.80 billion ($1.54 billion after-tax), which reduced diluted earnings per common share by $3.41 and annualized ROE by 8.1 percentage points.The $4.68 figure does include CVA/DVA
• Annualized ROE as 3.0% for the fourth quarter of 2015.
• Investment Banking
  • Net revenues in Investment Banking were $1.55 billion for Q4, 7% higher y/y.
  • Net revenues in Financial Advisory were $879 million, 27% higher y/y.
  • Net revenues in Underwriting were $668 million, 11% lower y/y.
• Institutional Client Services
  • Net revenues in Institutional Client Services were $2.88 billion for the fourth quarter of 2015, 9% lower y/y.
  • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.12 billion for the fourth quarter of 2015, 8% lower y/y.
  • Net revenues in Equities were $1.76 billion for the fourth quarter of 2015, 9% lower y/y.
  • The fair value net loss attributable to the impact of changes in the firm's credit spreads on borrowings was $68 million.
• Investing & Lending
  • Net revenues in Investing & Lendingwere $1.30 billion for the fourth quarter of 2015, 15% lower y/y.
• Investment Management
  • Net revenues in Investment Management were $1.55 billion for the fourth quarter of 2015, essentially unchanged compared with the fourth quarter of 2014 and 9% higher than the third quarter of 2015.
• Noncomp Expenses
  • Non-compensation expenses were $4.14 billion for the fourth quarter of 2015, 64% higher y/y. The increase compared with the fourth quarter of 2014 was due to significantly higher net provisions for mortgage-related litigation and regulatory matters, which are included in other expenses.
  • Net provisions for litigation and regulatory proceedings for the fourth quarter of 2015 were $1.95 billion compared with $161 million for the fourth quarter of 2014 (both primarily comprised of net provisions for mortgage-related matters).
• Book value per common share was $171.03 and tangible book value per common share was $161.64, both 5% higher compared with the end of 2014 and essentially unchanged compared with the end of the third quarter of 2015.

Goldman Sachs (GS) reports earnings on 1/16/15

** charts before earnings **

 

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Goldman Sachs’s (GS) golden cross

The bullish “golden cross” pattern that surfaced in Goldman Sachs’s stock chart Wednesday could bode rather well for investors in the coming months, especially since the stock also appears to have reversed a five-year trend of underperformance against the S&P 500 at the same time.

A “golden cross” refers to when a stock’s 50-day moving average rises above the 200-day moving average. Many chart watchers say these bullish moving-average crossovers mark the spot that a short-term rally transitions to a long-term uptrend.

Although that’s the first golden cross in nearly two years, they aren’t too uncommon, as there have been seven previous appearances over the past 10 years. What’s relatively rare, however, is when they actually work as buy signals.

Of the previous seven, only the ones that appeared in September 2012, May 2009 and August 2005 provided good entry points to ride sustainable longer-term rallies. Those golden crosses preceded gains of 37% over five months, 38% over five months and 46% over eight months, respectively, before the stock started corrections of at least 10%.

A common theme of those three golden crosses were that Goldman’s shares were simultaneously ending long-term relative-performance downtrends when compared with the S&P 500.

And currently, RBC Capital technical analyst said he sees a “potential long-term trend reversal developing” in Goldmans’ stock relative to the S&P 500.

Goldman Sachs (GS) reports on Tue 7/17/12

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a small pop