Dear Reader,
Goldman Sachs and Morgan Stanley, the last remaining de facto investment banks have almost recovered to their beginning of 2020 stock price levels.
How are the fortunes of Goldman Sachs and Morgan Stanley faring in the current environment? Goldman Sachs is quite exposed through private equity investments to technology companies. Morgan Stanley's main avenue of growth is private banking or wealth management. Technology stocks have fared reasonably well in the current environment. However, if the coronavirus crisis continues, technology companies, as well as everybody else, are bound to feel pain. So Goldman Sachs' private equity style investments in technology firms could lead to losses. Morgan Stanley's wealth management is heavily dependent on stocks investing and trading. If stocks experience another steep fall, Morgan Stanley is sure to record decreasing revenue and large losses. Brokerage services, especially in stocks, have done quite well since many investors, millennials especially, have seen the sell off in March as a buying opportunity.
However, I do not think the market was on sale in March. I forecast stocks will fall sharply again before the end of 2020.
All in all, the climate for investment banking is not very good currently. Mergers and acquisitions advisory services, debt and equity underwriting revenues are also much below recent levels. I prognosticate Goldman Sachs and Morgan Stanley's stocks will trade much lower than their current levels at the end of 2020.
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or sell any securities. The opinions expressed on the blog are Petar
Posledovich's. Petar Posledovich does not
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networks. The information presented is "as is".
Petar Vladimirov
Posledovich is not liable for any investment losses incurred by reading and
interpreting blogposts on this blog and posts on social networks.
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possess some of the securities, currencies or their derivatives mentioned in
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Respectfully yours,
Petar Posledovich
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