Hey There Income Hunter,

 

On Friday Bloomberg reported that a new business Goldman Sachs recently created to house its consumer lending business is getting crushed. 

 

Labeled their Platform Solutions business, which includes Goldman’s Apple Card, the platform absorbed more than $1.2 billion in losses in the first nine months of 2022. 

 

This loss occurred on $14 billion in credit card loans as the percent of delinquent payments rose.

 

Is this a foreshadowing of what is to come for other banks as well? 

 

It may be as the guidance from the banks that reported on Friday showed concern for future economic conditions.

 

Bank guidance is a forward looking indicator for sure …

 

Today we’ll take a closer look at Goldman’s stock trend, along with banks in general.

 

Goldman Forced to Be a Bank

Goldman was forced to become a bank holding company in order to participate in bailout money just days after the Lehman collapse in 2008.

 

Shortly thereafter, GS built a digital bank of the future with a goal of rising to the top in the industry. 

 

Well, so far they have lost $1 billion in 2021 and $2 billion in 2022. These losses forced GS into one of its biggest rounds of job cuts ever (3,500). 

 

This trend may spread throughout banking as delinquencies and defaults slowly build in the months ahead. 

 

Goldman Stock

On Friday, after first trading off, bank stocks recovered and closed near the highs. The chart pattern from the June lows has been bullish with a series of higher highs and higher lows up to now.

 

Look for a failure against the .618 Fibinocchi retracement and highest call gamma strike at $370 over the next week. If we get it, consider selling the stock with a $340-350 price target.  

 

Bring It Home

We also have Morgan Stanley (Ticker: MS) and United Airlines Holdings Inc (Ticker: UAL) reporting today. 

 

UAL has been on a tear ever since China’s reopening became the consensus narrative. The $52 price for UAL is strong resistance, so the GS, MS and UAL earnings reports may set the mood for the week. 

 

 

This Week’ s Data & Fed Speakers

We head into this week with volatility at a 52-week low. The data table below shows the key reports for the week including retail sales, PPI initial employment claims. Fed speakers are key as we head towards the Fed FOMC meeting on Feb. 1. 

 

 

Stay tuned for insight into the Jan. 20 monthly OpEx on Friday.

 

There is a lot of call gamma building into OpEx, which could open the door for great volatility ahead. 

 

Live and Trade With Passion My Friend,

Griff