Goldman Sachs earnings, the SBF trial, and the U.S.-China trade war

Hello Folks,

Today, we take a look at the Q3 earnings of Goldman Sachs, the U.S. chip ban on China, and the ongoing case against Sam Bankman-Fried. So, let’s get into it.

Goldman Sachs reported better-than-expected results on Tuesday, but the big bank’s still far off the top spot.

It reported revenue of $11.82 billion vs. estimates of $11.19 billion. Earnings stood at $5.47 per share vs. estimates of $5.31 per share.

What does this mean?

Goldman makes most of its money by taking commissions on its clients’ trades and charging hefty fees from investment banking deals. But that only works if clients are trading and deals are being made, and right now, there isn’t much to keep the big bank busy.

That’s partly why Goldman’s stock price has underperformed JPMorgan and Morgan Stanley this year. However, in fairness, while Goldman’s third-quarter profit still landed a third lower than last year's revenue, the big bank’s stock trading department was up 8%.

Goldman expects to end 2023 with $46 billion in sales, which it earned in the pre-financial crisis era 16 years back. Comparatively, JPMorgan is spinning plates, and the extra coordination is coming in handy.

JPM’s cacophony of money-making routes ensures if the corporate deal-making drops off, the weakness can be offset by verticals such as trading, consumer lending, or wealth management. In the last 16 years, JPM’s diversified business model has allowed it to triple earnings.

The US Is Making It Harder For China To Get American Chips 

The US is making it even harder for China to get its hands on tantalizing American chips.

The US announced a swathe of controls designed to limit China’s access to advanced chips around a year ago, but it’s not stopping there. Concerned that China’s on a mission to beef up its military arsenal using stateside tech, the US just clamped down even harder on exporting AI-compatible graphics chips and the complex chipmaking machines that can churn them out.

But it might not be that easy: Chinese firms seem to have been getting their hands on Uncle Sam’s finest tech by routing it through other countries, and America's clocked on.

The US vs. Sam Bankman-Fried

In a scathing testimony against Sam Bankman Fried or SBF, Nishad Singh, the former director of engineering, stated SBF spent more than $1 billion on lavish expenditures.

The purchases include $200 million on a stadium, $300 million on the infamous Bahamas penthouse, and $50 million paid to celebrities such as Tom Brady and Giselle Bundchen.

Nishad was also asked to create a code providing Alameda Research with certain privileges. For instance, the sister company of FTX could withdraw funds in excess of the balance amount

Headlines You Can’t Miss!

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Adidas shares climb after boost from Yeezy sales

Shares of critical chip firm ASML drop 4% after new U.S. curbs

China’s Q3 growth exceeds forecast

Reddit to wind down blockchain-based rewards service ‘Community Points’

Chart of the Day

According to a research report from Finimize:

• 84% of retail investors plan to invest as much or more than last quarter

• 67% believe global stock markets will be higher in 12 months

• 62% plan to invest in stocks, followed by 46% in exchange-traded funds

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own rese