a record year for goldman sachs.enue comes in at $3.1 billion. estimate was at $3.7 billion. trading revenue a little light. equity sales and trading revenue, $2.12 billion. six sales and trading revenue -- fic sales and trading revenue. the stock a little lower following this in the premarket. tom: i would note, return on tangible equity, 24.3% for all of 2021. q4, 16 .4%. maybe that indicates the ebb that we saw at j.p. morgan and goldman. we dive into this on the break. i want to look at the vision forward on expenses. jonathan: down a little more than 2%. david solomon saying 2021 was a record year for goldman sachs. the numbers at first look, just a little lighter on some of the trading numbers. we will get into that in just a moment. from new york city, for our audience worldwide, this is bloomberg. ♪ ♪ jonathan: live from new york city, for our audience worldwide, alongside tom keene and lisa abramowicz, i'm jonathan ferro. equity futures down 44, off by almost 1% on the s&p. on the nasdaq, down 1.5%. stock of

no glory for goldman. goldman sachs shares shrink 8% as jumping expenses overshadow record banking revenue. treasury selloff, the curve flattens, and the two-year yield top 1%. tech it's hit hard while energy gets a lift. from new york, i'm kailey leinz, with my cohost in london, guy johnson. alix steel is off today. "bloomberg markets bochum to -- welcome to "bloomberg markets." on a macro global yeah, it seems to be -- global level, it seems to be yields driving the headlines. guy: you've got everything in there. you've got the corporate results , the energy story and what is happening on the m&a front. we got a little bit of that out of europe yesterday with the unilever/gsk story. looks like it could still be an interesting year for m&a. there's lots of ways looking at this market. let's talk about the data we are getting because while last week was packed, this week a little light as we build up to the fed next week. we are getting the housing market data from the national association of house builder

we have some goldman sachs earnings later this morning. tom: the goldman sachs earnings will be profound. keith horowitz was out with a note on jp morgan. the big shift was may be what we will hear with goldman sachs, which is full steam ahead on capital development, innovation, and simply spending money. horowitz brings the price target down on jp morgan, still up 11%. you wonder if we see the same thing from mr. solomon at goldman sachs, where he says we will spend money to stay out front. jonathan: that is goldman. a lot of people looking to get paid big time. lisa: that is where i wanted to go. i love you can read my mind at the beginning of the week. why is this surge in fed expectation coming now? it was some of the commentaries from the ceos of big banks saying they are seeing wage inflation like they have not seen in decades and how much is that feeding into the zeitgeist? jonathan: they're hoping they have to do this once and not repeat next year and the year after that. lisa: perhaps, if you look at real wages, there is still a l

let's pivot to goldman's commodities come back.banks unit had its strongest performances and a decade, revenue passed $2.2 billion last year. let's get to bloomberg's simone foxman. the huge rebound in the commodity desk, how important is this to goldman? >> the commodities desk has been such an integral part of goldman sachs since the 1980's when it acquired j aaron and co-. folks who have come through the commodities desk include gary cohn and the like. for a very long time, goldman's commodities unit was really in a slump. a couple years ago, 2018, 2019, there were discussions about potentially scaling back the business after a storied run in the early 2000s that has not borne fruit in the past decade. now we are seeing this $2.2 billion revenue figure. if you think about it, after a couple years ago, the worst of the slump, 2017, we are talking revenues that failed to garner $300 million. what a huge comeback as we have seen commodities rapidly trading over the past year or two. manus: what is it going to mean for the rest of t

then goldman missed on earnings.dd it up, energy just about the only bright spot we will have the latest on the markets. >>> the other bright spot is video games. the stocks are top performers in the s&p after microsoft's surprise bid for activision, the latest on the deal, on whether it will face publishback and whe it leaves the competition. >>> and with another bad earnings day, we will look ahead to the companies reporting tomorrow to see if the selling trend can and will continue. first, the latest on the sell-off, dom chu with numbers >> in certain parts of the market we are heading to session lows right now but you see a redominant sea of red behind me. energy is the least decliner meanwhile, the worst is the financial sector we will get more to that in a moment interest rates playing a big part of the story, but kelly mentioned the 200-day average on the nasdaq composite still 2.25% declines for the nasdaq 14,556 the last trade. 90 handles to the downside for the s&p 500. if you look within the overall pictur

any thoughts on the goldman quarter?you saw with the jp morgan numbers that you just sell because cheryl pointed out the financial institutions had a terrific year last year and you're just continuing to see money come out of many of these stocks, not all of them but some of them. and it just begs the question they had of terrific year but if the fed is expected to start removing accommodation, reducing its balance sheet and raising interest rates and that could burst asset bubble galore. that could be essentially a sell now and ask questions later. maria: yeah, that's what you're seeing this morning. stock is down about 2% on the goldman sachs quarter missing earnings estimate. beat on revenue. we will continue to dig deeper into the goldman report. quick break, we are looking at the chaos at our southern border. cartel ramping up drug smuggling in america. hundreds of thousands of deaths as a result of fentanyl. former acting dhs secretary chad wolf will weigh in. wait till you hear where fentanyl was found in the last

he does compete against them and goldman not so much.id the analysts are forecasting a total collapse in goldman's earnings thisia year. more than $40 last year because of increased expenses. when you go over the fine print, one thing is clear goldman sachs is in complete control of its expenses and if they'll earn 10 million this year because they brought in 60 million in fees, that partner's not guaranteed to make 10 million again and it may not make 10 million and it's variable, both ways and that's how the bonus structure works i know trading that when you get this big selling like we saw in the stock today the selling is not done and there's more to come, but just like the market has made up of individual stocks and since when is goldman's advice not giving a premium. do you think that's advice do you think companies spend $70 billion and they want robe o advice no, ridiculous there are two of them and let's go up. we have two analyst recommendations for boeing in part because business is about to turn it up around the world and in

goldman had had to backtrack.g that staff can work from home until january 18 if they are able to do so. it is because of the trajectory of the spike in cases. >> what is this going to maine for goldman sachs -- mean for goldman sachs' operations? >> if the past two years is anything of a guide, the bank has ranked in record numbers. dealmaking has been very strong post-its record results. of their bankers -- post its record results. employees would say another 18 days working from home could not really affect the business. >> you can get a round the--a roundup of the stories that you need, bloomberg subscribers go to your terminal and you can customize your settings if they only get news on the industries and assets that you care about. this is bloomberg. ♪ shery: tesla smashed its previous record for the global -- for global delivery, joining the $1 trillion evaluation club. quite an achievement, given that all automakers around the world suffered supply chain disruptions. >> really impressive for tesla. it is s

goldman sachs received millions in payout, a record set of earnings. got the scoop is with us now. i suppose it started with the junior pays. the money comes they're right and i'm sure that those at the top want to have their case and eat it, too. >> that seems to be the case after what has been a phenomenal year for the banks, smashing a record for the first nine months of the year. in a sector report next week, which will scale new heights in revenue and profits, clearly the partners at the highest rank, the top 400 employees inside goldman sachs, were offered hefty fares in addition to their annual incentive and base pay. they are getting a special one-time award that will pad their healthy pay packages by an extra 7-figure amount. i'm sure they will be happy about that. sonali: speaking of the existing bonuses that are hefty, there is this line in your story yesterday that the top of -- performers will surpass $30 million. how does that compare with other places on wall street, as we know, that goldman, jp morgan, has lots of significant talent alr

goldman has called for four rate hikes in 2022. u.s.-russia talks kickoff in geneva as the white house considers harsher curbs on moscow. cases in the u.k. drop for a fifth day as the government drafts plans on how to live with covid-19. it is amazing how quickly these calls for high rate hikes come but my favorite line from bank of america is about liquidity, supernova coming to an end and we are grappling with that, aren't we, dani burger? >> treasury cash markets might be closed but futures continue to tumble. manus: i think when it comes to understanding the cause, this is it -- has a bubble in tech burst ? what are the outlier risks that we are not factoring insufficiently? dani: speaking of things not priced in, bank of america also points to a rate shock from the ecb. we talk about four potential rate hikes but what happens if we get hikes from europe and asia? the cash flow might not be around this year. manus: one opinion columnist wrote the number of the day --it is? dani: we are officially below that figure. the first time in

goldman doesn't have a mortgage business, auto business. goldman has -- the book value is 287.ut the one thing i look at goldman, i say, what is it is it a credit card company? they have the apple card is it marcus, which they said is doing quite well is it wealth management? look at morgan st stanley, they have a wealth management business that is second to none. and they would argue that schwab doesn't have what they have. and i find -- i think morgan stanley is going to have a good number wells had a great number schwab did miss. we're going to sell a little wells for our charitable trust because it's the biggest position we have how much money can sharp make for one person sharp is a genius. he's a quiet genius. he's the assassin cop in -- >> i don't know. >> a paramount show -- >> they call him the assassin. >> he's hoping that he throws -- jamie is hoping he's throwing a life jacket to him >> now it's like venice? now it's venice. >> i don't want to swim in the water either in venice >> yeah. >> charlie is the king of the -- >> we're going to hear what morgan stanley and

goldman sachs will recover from this. cheryl: let me bring you into this conversation scott let's go back to big tech. really getting hit again we've seen this story play out let's 0 in on microsoft that's the news of the day with activision $68.7 billion deal. the reports that david is only going to stay through completion of the deal does not affect anything? >> i don't think it affects that much. microsoft has the new windows 11 platform they're moving forward and expanding in increasing the capacity. one of the big attractive features of windows 11 is a streaming it can do. you introduce gaming and faster internet speeds and you have a mega platform. this is a great combination going forward. i think they're making a good deal and obviously they thought this over very, very well because i can integrate it in people with be able to do things that they haven't been able to do before on their pcs. maybe you won't need an xbox to go into competitive gaming. cheryl: your right is printed out globally but more in large comp

goldman has continued to grow and expand. a while away before becomes a meaningful part overall and starts mattering to investors who are looking at that. guy: we are going to see rates going up. lending is going to be important going forward. in a year, if rates are 100 basis points higher or more, how different do these banks look as a result of what is happening? alison: they look much better, though it is not evenly distributed. especially for bank of america and wells fargo, it is a major lift to revenue. it generally dropped straight to the bottom line, unlike offsetting costs. it is definitely margin expensive for the bank. the other part of it, speaking to the broad trading picture, and it is interesting on the commodities front, is the other thing we are looking at is trading market share. equities is where all the action is this year given the issues with credit suisse. -- suites. the commodity story for goldman reminds us market share can sometimes be aided by a business you are more leveraged to that other people

goldman sachs up. $100 a barrel. francine: if we look at little deeper into some of the sectors that are moving, i think energy and technology and travel are some of the biggest losers. energy a little bit up on the side. brent touching a psychological level. this is some of the geopolitical concerns, usually short-lived for the oil market. what is not short-lived is that demand could pick up. omicron is possibly not as deadly as what we thought as well. a lot of these european stocks, energy on the way up attach, but everything else on the way down. tom: that is the broader picture negatively. then you have the individual corporate stories. rio tinto talking about a challenging quarter. that stop down 0.5%. thg lower by almost 2%. their profits missing estimates. they faced growth challenges. commodity prices have been challenging for them. st micro, we pulled this one out because it is a high-yield environment. currently down almost 1%. let's get the bloomberg business flash with laura wright. >> activision blizzar

goldman shares are sliding on the news.tock is having its worst day since june 2020, now down more than 10%. we call that decimation, reducing anything by a 10th. the rest of the s&p 500 hitting session lows as we start the hour down 2%. nasdaq tech stocks leading us down. it is the rise in yields, 2-year above one, 10-year at 1.86, causing investors to leave these so-called growth stocks. this is bloomberg. ♪ and there you have it. woah. wireless on the most reliable network nationwide. wow. big deal. we get unlimited for just 30 bucks. sweet, but mine has 5g included. relax people. my wireless is crushing it. that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one-upping itself. take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. mark: welcome to the bnn and bloomberg audience. i'm mark crumpton with bloomberg first word news. americans can order free at home covid-19 tests. e

goldman sachs is saying come back in february.his is bloomberg. ♪ matt: this is bloomberg markets. i'm matt miller. as covid cases continued to rise, goldman sachs has told their u.s. workers to continue working from home for now. let's bring in sonali basak. what do we know about when bankers need to be back at their desks? sonlai: after february is when things will kickoff. it is not just goldman sachs, which was the first to bring people back across the united states in full form last summer. blackstone is another interesting one. they have their private equity executives back before most banks started to talk about it. now they are pushing back their return as well to january, as well as pushing the idea that employees need to get booster shots. matt: i get the question often from viewers when we talk about banks requiring vaccines, boosters. what happens if the supreme court decides these mandates are not constitutional? sonali: you have a range. citigroup has been the most aggressive about getting their employees vaccinated,

morgan and goldman sachs.merica today was like a win, but how are they planning to keep competitive? perhaps the same question for morgan stanley. i have not seen their strategic update yet. we were do get that today, with their costs coming in and revenue coming in pretty well. tom: what is the technology winner? who is the technology winner, i should say? i assume it is jp morgan. alison: i would say jp morgan and goldman sachs. jp morgan is more of the broad winner. if we look at the market share gains of jp morgan over the last five or 10 years, trading has been a big area. cash equities was the one area they did not have a leader but ship -- a leadership position, but they have fixed that. on the repo side, the deposit share they have gained. in part, it is digital, making them more efficient, but increasingly, these banks are on the offense in terms of customer facing technology. we have jp morgan spending $15 billion. they said their costs are going to be 8% to 9% higher this year, and trickling into ne

goldman sachs decision follows jp morgan, bank of america. that is going to be a big step back heading into 2022, and the beginning of this year, we're seeing this new backlash in terms of testing and omicron waves. manus: thank you very much for the very latest. tesla smashing previous records for the global deliveries where the company joined a trillion dollar valuation. where to the sales come from? where is the lead in the story? reporter: 308,000 600 deliveries , a new quarterly record. surpassing the last record set in the previous quarter. tesla's deliveries are up 87% year-over-year, really impressive. they were able to do this because engineers have been agile, adapting to whatever semiconductors they can get their hands on. semiconductors have been the achilles heel, letting -- limiting production, curtailing advancements. why we have seen an explosion in the secondhand car market. an analyst called these numbers jaw-dropping, blowing away even the best case expectations. essentially, tesla's back was against the wall, but they have

then goldman missed on earnings.only bright spot we will have the latest on the markets. >>> the other bright spot is video games.

for goldman sachs, they are below what the commodity figure shows. biggest fixed income trading desk on wall street stop the idea that they need to bring in more than goldman will be a big deal to retain the dominance to a high degree. tom: why you jump in with some of the early numbers? jonathan: 30.35 billion dollars. managed income 31 point $7 billion. the numbers keep pouring down on the fourth quarter closed at 1.8 billion dollars net credit. we saw a lot of that over the last year and you are seeing it this morning. investment banking revenue, 3.2 billion dollars. we may hear a lot about am and a which is a record in the united states. 3 billion is the estimate and 2 billion, the numbers help. tom: anybody looks at these double-digit returns, these ratios and compare and contrast of equity return and they are really something. the 19% statistic and tangible is extraordinary. jonathan: the economy continues to do well despite the ohmic on headwind. lisa: it will be interesting to see what jamie dimon has to say not only about compensation but th

what did goldman say and which offices are affected? >> just last week, goldman sachs was really doubling down on a strategy of returning workers to the office as quickly as possible. we are talking about the main offices in new york and london. depending on the jurisdiction, they have been trying to get staff back into the office as well. over the past few days, i said -- we have seen cases surge. new york in particular has become an epicenter once again. the bank has done a bit of a back flip. they will be required to be back in the office in the middle of january, january 18. goldman said that people coming back to work have to be vaccinated with the double shot and the booster as well. craig's this is on the heels of the jp morgan citigroup as well. we can see another mutation here. >> these banks had hoped this year would be different. nobody thought that 2020 would turn into a trilogy. the beginning of 2022 we are still talking about the pandemic. goldman sachs and jp morgan has shown they can work from home really well, all of th

shery: and it is not just goldman sachs. some other wall street banks also turning more cautious as we have this new wave of returned office deadlines being reversed. what will that mean for them? >> it is only for a few weeks right now. remember, throughout last year and the year before, these banks had racked up record profit. ask your, it was a record year at more than $5 trillion of volume globally. but these banks are setting back the deadline to return to the office. jp morgan is offering employees the option to work from home. they are expected to resume in office schedules by february 1. citigroup allowing employees to work from home for the first few weeks of the year. and bank of america has said that employees can work from home this week. shery: let's get to vonnie quinn. >> china's property developers need to find $187 billion in january to cover maturing bonds, trust products and deferred wages to millions of migrant workers. that is a bigger bill than the last two months combined. beijing urging the avoidance

. >> goldman sachs misses estimates with record spencers. a sign of the ballooning costs of the talent war. >> let's get you straight to the start of trading here in sydney. we are watching some of these energy producers after we heard better than inspected numbers -- expected numbers. that rally continues to push higher. we should be helping out some of the energy producers here. this is a 10th of 1% lower. we will have a second straight session of losses at this point in time. kiwi stocks are looking a little bit weaker as well. the nikkei futures looks like we could show a cautious start. we are also seeing some mixed weakness when it comes to the fx side of things as well. >> we are in full swing of earnings season here in the u.s.. goldman sachs shares tumbled after the bank posted a drop in trading revenue and compensation costs soared on the earnings call. the cfo spoke about the battle to retain staff. >> our philosophy remains to pay for performance and we are committed to awarding top talent in a competitive labor environment. >> a

guy: breaking news on the goldman sachs story.mbers a little later than the rest of the pack. goldman's most elite ranks will get millions in one-time payouts. sonali, walk us through the story. how big are the numbers? >> it is interesting. this is from several, tens of millions of dollars. some of the top performers at goldman could be getting north of $30 million. now, we are seeing an elite group, a couple hundred or so, 400 or so will be getting a one-time special award on top of the normal bonus. something that is interesting to consider is if you are a smaller firm, we reported the compensation goal is rising 50% at least. bonuses as a portion of that are more than a 50% rise. if a smaller firm with a couple hundred people raises their pay 60%, 70%, hedge funds and private equity are doing that, it makes all the since in the world for a firm like goldman sachs, which is posting numbers like we have not seen in many years, and a fifth year in a row as a leader on dealmaking, it makes all the sense in the world for them to tr

jp morgan and yesterday, goldman sachs. huge gains going into this year, at the beginning of this year. people take a look at these expenses and they say wait a second, revenues are growing as quickly and wait a second to your question earlier, the staying power is the beginning of an opening salvo of wage increases. the concern here is that people are seeing huge market shortage of housing and have not been able to build in certain areas. we are expecting permits to come down as a result of some of these southern states. 4:00 p.m., president biden is planning his first congress of the year, only the second since he took office. i'm very curious how he deals with oil prices. we were just talking about that. the idea that you are dealing with oil prices at the highest level since 2014, possibly heading to $100 per barrel. jonathan: some feisty q&a, maybe. thank you very much. back to 2016, just about to take a visit to a negative yield on the german 10 year. at that time i ask a young man whether he liked europe and he repli

kailey: that has been the story with goldman and jp morgan. they were the first to say no, we are bringing traders back to their desk. you have to adapt to the times. given this surge and how quickly it is spreading, they have to consider the health implications as well. jonathan: one of the risks we will talk about with ian bremmer, 20 minutes away. from new york city, for our audience worldwide, a happy new year two -- to you all. from new york, this is bloomberg. ♪ >> president biden has reaffirmed the u.s. support for ukraine's sovereignty. in a statement, the white house said the u.s. and allies will respond decisively if russia invades ukraine. sanctions on russia banks are among measures recently being discussed. lloyd austin says he plans to quarantine over the next five days after testing positive for covid-19. he says his symptoms are mild and he will attend readings -- meetings virtually, when possible. his last contact with president biden was december 21, one week before he experienced symptoms. goldman sachs is encouraging people

you mentioned goldman sachs, about 33% last year, an astounding number. that is just compensation. are they paying the people? ? they are hiring more the headcount going up at goleman and jp morgan. they are feeling under threat from hedge, from private equity, from fintech, who are threatening to steal their best people. they are blunt about it, saying we will pay more to keep our best people. the result, expenses are rising, affecting the bottom line, and the stocks are falling, as you mentioned. manus: so what are we getting from morgan stanley? ? and bank of america or we invested more in the long group -- long growth or the banking side? we are worried about loan growth, aren't we? >> certainly, and that has been the missing piece for the last couple of years. it's been a great run for trading and investment banking, but not for lending. morgan stanley and bank of america a pretty strong investment banking businesses. bloomberg intelligence points out the numbers were pretty strong on that front, reflecting a good pipeline for deals and ipos. as long

goldman sachs has that $100 a barrel target.oes under pressure -- fifos under pressure as well. in terms of the sectors, they remain in the green, including energy. at the bottom of the list is travel and leisure, but we have technology in there as well. the guilds on the two-year is up. less movement in terms of the 10 year. does that suggest there will be some policy mistake? the balance sheet, we have more clarity on wednesday. francine: economists at goldman sachs say they will tighten policy more than the current forecast. it suggests rate hikes. let's get to allianz's chief economist. the million dollar question is, is it the kind of inflation that warrants such aggressive hikes from the fed? or do we think it is too high? guest: that is the question of the year. i think that the fed may have to pause on the hike because they know that their hike cannot control inflation and they are very concerned about volatility suppression and the market derailing. i think this will tell us if you think -- if he thinks monetary effecti

many components are lower than that is it all goldman's fault?e will get the latest on the fed and the fall-out plus, jamie dimon live the jpmorgan chase chairman and ceo joins us for a first on cnbc interview. his 2022 outlook on the market, rates, crypto, covid and so much more it all comes on an ironic anniversary. one year since the reddit rebellion. a look at the winners and losers since then, obviously with it tougher for losers lately. let's start with dom chu >> the state of play right now is about the nasdaq trade you just mentioned kelly mentioned that 200-day moving average for the nasdaq composite. 14,688, that is the key level. that's that 200-day average price. we haven't seen it dip below there in quite sometime, which is catching a lot of trader attention. that's the reason we are seeing the nasdaq composite down about 2% right now, off the session lows the dow industrial is off nearly 400 points, 1% losses there. the s&p 500, 4614, down about 1 and a third percent overall. if you look at the story for what is moving right now, in

goldman down 7%.s on wall street today, down 1.8% on the s&p 500. >>> small caps down 3% welcome to "closing bell." i'm sara eisen along with wilfred frost and mike santoli interactive brokers releasing earnings in a few minute just the chairman will break down the results before he talks to analysts on the conference call with us this hour. first up on the market anastasia amarosa with us and delano joins the conversation i'll start with you. on a day like today do you sit back and hold? do you do some buying now that we are seeing the nasdaq down more than 7% from the year and 10% from the highs >> thank you for having me on again. thinking about what clients are doing, talking about wage inflation, clients have extra cash look at the alternatives they're not that great in cash obviously you want to be careful seeing the sell-off but investors start to look where the market is dislocated and an overselling of the high quality names especially with tech sector and the different growth stocks that sol

jeff currie with goldman sachs. are you bullish on commodities? outperform the rest in the next year? jeff: extremely bullish. if you look at the set up we have going into next year, equities, stress valuations, come back at bonds are at a high level. record dislocations in markets. you still have a lot of money in the system. finally, if you look at the investment positions, it is very low. what does that tell you? the best place to be right now -- we think you will see another year of outperformance of commodities and real assets. when we begin we go back to the core thesis that we put out in 2020 of october, this is the beginning of a commodity super -- that will go on for years, potentially a decade. tom: the beginning of a commodity super cycle. i want to threat that back in, what is a russian invasion of you came -- ukraine, what does that do? jeff: i think that event alone will not have a significant impact on supplies. kazakhstan is a much more serious direct impact to supplies. i think it illustrates the broader dynamic care. if you have

goldman this year says they look for four hikes this year.one coming every quarter, and they expect the balance sheet reduction as well. i thing it is going to be interesting to see how they forecast the interplay through 2022 and 2023. tom: we have discussed this. there's a lot of movable parts. i would suggest the movable parts of romaine's world is a lot more focused on what you do on revenues, what you do on margins. jonathan: right now, tens 1.76 56%. with your single names this morning, here's romaine. romaine: let's take a look at a big deal in the space out there. take two interactive, a traditional mobile video game, seeking to buy zynga, a mobile videogame maker. we should point out this is $9.86 a share, what they are offering for this company right now. this is about a 6% premium to what we were offering friday. the ceo of zynga is going to join take two interactive leader mobile gaming business. this is a big deal because take-two has had a lot of trouble building out that mobile business. he has done a lot of work there. before

is city calls on goldman -- ucd calls on goldman. -- you see the calls on goldman. is there going to be a limit to this selloff on tens and 30's? is it the terminal rate or something else? lisa: they are saying it could be due to the distortion, some of the demand pressures from overseas. how much is the dynamic right now in the german bond market -- and suddenly inflation rise? jonathan: german bond yields creeping back towards zero. good morning to do all with tom keene and lisa abramowicz, i am jonathan ferro. payrolls on this friday, in around 450,000. the jobs numbers, two hours and 20 minutes away. ritika: speaking of the jobs report, it is out in a few hours and expected to show that payrolls grew by 447,000 in december, more than twice that the november ticket. the unemployment rate is likely to tip 1/10 -- to dip 1/10 of 1%. european central bank officials insist the rise of inflation prices is temporary. they speeded up beyond record levels and rose 5% from a year earlier. that was faster than november's gain and higher than the median estimate. a showdown

they will begin in march according to goldman. rate hike, of course started on friday, we reported that deutsche bank had said do you know what it's not three anymore , it's four. four hikes this year, and jpmorgan today bringing forward its forecast for the fed's first rate hike to march from june and now sees hikes every single quarter this year. that's a radically different picture from november 22 when chief global strategist david kelly told the "clayman countdown" that while he felt the fed was already behind the curve and would remain so until december of this year before tightening, he now is here to explain what triggered the change in jpmorgan's view and david, this is really big news here. can you give us an indication, was it just the fed minutes from the most recent meeting or something else? >> well, it's a combination of two things. first of all, the fed minutes really reiterated the fed is going to stick to their process. what they've said all along is that they won't raise rates until they feel that they've got in

where the future works. >>> that's what's happening with goldman sax.e bit more comfortable giving you the bottom line number which a lot of times there's items that skew that number but $10.81 is the number that the company is operating and the street was above that at $11.06 that's rare to see a goldman miss on earnings per share but as i said, we'll be seeing whether there's items that skew that above or below the revenue number was okay. it was $12.64 billion. talking about okay versus analyst's expectation right around $12 billion even. there is a lot of other metrix as there always is book value 2.84 a share. you can see it's trading sometimes one book, other times somewhere in between there there is a lot of compensation and benefit expenses, always one of the major expenses at these operations, big banks, 3.25 billion operating expenses, 7.2 billion. consumer and wealth management equities revenue up 2.12 i know we have other things going on everything in here, let's move on, quickly. >> we will talk a little chinese jokes for a moment here. bei

jpmorgan, american express and goldman sachs all sharply lower. as we just noted, the dow and the s&p on track for their second down week many a row, but the nasdaq is on pace for three down weeks in a row. and if you look inside the nasdaq, so many stocks in correction territory. then you had early holiday shopping, it hammered holiday retail sales which surprisingly fell 3.9% -- 1.9% in december, the largest decline in 10 months. if you look on the year, however, retail sales did increase by 16.9%. if you look underneath that report, online retailers -- everybody shops online these days. guess what? in december they fell 8.7% from november. if you look at department store spending, it dropped 7%. clothing, over 3%. even sales at restaurants and bars, and let's face it, you cook less in december because, you know, you've got to cook so much for the holidays. even that fell by less than 1%. but, yes, omicron cases did keep people home. take a look at the retailers, underperforming on all in news. those include the mall stocks and some of the onlin

it's a wealth business goldman is beloved internally. wall street could care less. has the apple credit card no one can figure out if they are making money on it the 2% yield is paltry and there is no sense that goldman will raise that dividend any time soon this is a good brokerage and advisory firm it gets no respect because people can't figure out why it doesn't could something more growth oriented with the capital. plg. will tell you it has plenty of growth no growth stock sells for less than ten times the earnings. then again maybe i am making a mountain out of a molehill because the perfect is clearly the enemy of the good. if you own the stock and have a fabulous run last year, what's more to ask? if you want to know which of the dow winners is most likely to put on a repeat performance, as i said on halftime today on scottie's show, i prefer and i bet it would be unitedhealth group, whichis number four, up 43% last year. they are the dominant player in the management care space. but we are just waiting for a dip. unfortunately, they rarely have one. plab we

. >> yeah, goldman was one of the top performers goldman sachs, david, sells at six times earning.hen you get off the desk with bankers, they say, what will goldman do to inspire the street to give it a multiple that's higher than a steel company. david, any ideas >> i think they're going to just continue to articulate what they believe are their strengths. it's funny, we haven't talked as often about their efforts in marcus that will continue but i think they want people to understand that in their belief, they have a -- for lack of a better term and they love hearing this, a blackstone hitting inside goldman, right? all of their different efforts and their ability to generate reoccurring fees from so many of their businesses is a real positive that has yet to be fully recognized by the way, important to note, blackstone itself is a larger company than goldman blackstone has $151 billion market value we don't talk act that company as often either even though it is such a powerhouse in so many ways. >> carl, if you're getting out of school, both college or graduate school, goldman

it's better than seven goldman is at seven. >> particularly if they can maintain returns on. >> goldman has beaten every bank, and i'm not going to pay seven times earnings for goldman sachs. >> i've been critical of the politicization -- >> when you go into the credit card business, you don't make a lot of money for the first five year, but the apple credit card, it's possible that people sign up i just want to understand, you've got markets, credit card, wealth management business, and it's a pastiche. are you wearing two suits? you have two suits on today. >> i'm not wearing two suits. >> did you dress in the dark >> yes, i often do at least i'm not chomping away on saltines because i had a late flight at bernadette if you went there, i'm going there. >> the gloves are off. >> can we talk about morgan stanley? >> i have a mouth of caviar, that was like the size of everest. >> that's horrible. >> finally a opentable seated diner. >> i had a great time. no one next door got angry we laughed so much. >> no masks, i assume? >> no masks. no mas >> obviously that company had -- >> now, tha

for the record i have subscribers take goldman sachs.on't know if we were up, two or 3% coming from the significance. here is thing there thing, folks. share it with the audience, have y'all chime in. going back in history, the market peaking in 2000 a fraction of names were outperforming, 2% of names were doing well. once it crashed over the next several years, more than half the names doing well. at one point over 70%. the reason i bring this up, nicole is recently the brett has been horrible, terrible. we've had these days where the market was up big but we knew there were 3,000 losers versus 1000 winners. could there be an inverse situation soon on the surface it looks awful but there is meaningful stuff happening beneath the surface? >> absolutely. our call for this next quarter or two is really a period of decelerating, yet still robust growth. so when you focus in to your point on profitability, quality, looking for those underlying names, i think the muting of the returns is an overall theme for the year, coming off of last. it i

goldman sachs was one of the last s.approval to sxchange in a bank holding position. what's interesting, andrew, is what i will tell you, one thing i didn't see coming. the number 11-most searched ticker is the nasdaq 100 futures. so a lot of people scrutinizing that nasdaq trade right now on the future side of things and one thing i don't see very often, number 36 on the list, the two-year treasury note yield cracked the top 50 the first time in recent memory i've seen that, andrew >> very smart viewers i think on that website absolutely dom, thank you for that. we got a lot coming up we've heard about the concerns about the new 5g wireless, one of the key players from verizon ceo hans vestberg. >>> next, looking ahead to year two. we got a live report and texas congressman kevin brady will join us. stay tuned you are watching "squawk box" on cnbc >>> president biden is about to begin his second year in office. as he does, he is battling tough head winds kayla tausche joins us with more on that. >> reporter: good mornin

breaking news, a scoop by bloomberg on goldman, goldman sachs is apparently looking for another way topay for top brass with a new equity award that will be doled out to members of goldman's management committee. these new grants will be offered in place of a one-time guaranteed stock reward. i think this speaks to how competitive it is within the investment banking community and how we saw compensation ratios move higher for all the banks and how we are looking at the sort of one offs to try and retain all that talent. guy: i think it is about retention, isn't it? they are trying to make this sticky, trying to make some of these awards as sticky as they can to make sure it does not happen, to be paying people a huge chunk of money is one thing, putting caveats around that, you have to stick around to get this, make sure you stay with us, i think that is happening here, not just at goldman sachs but also elsewhere. but i think we will see more of these stories as this issue continues to rear its head. anyway, this is bloomberg. ♪ alix: live from new york, i am alix steel. guy johnson i

we have the likes of goldman sachs caulk -- calling for that in march. tom: we also have the balance sheet. that is -- the implications for that are significant for the equity market. >> that is key as well because then you could get into a situation where the fed, in using its leaders in the policy, could be something that potentially generates some caution for risk assets in the equity market in a time where we see yields running up to the level. francine: this is without a doubt my chart of the week, month, year. thank you for coming on. treasury, if you look at the moving yields from the 10 year, when do we see some kind of corrections in equities matching what we can see in the yields? >> thank you and happy new year. european equities, and actually european equities when you look at the key trades, their relationship with hikes and the fed, there is a strong relationship. the strong relationship with the hike and the ecb at the moment. initially when you have the fed hike, the reality is that historically, 12 months down the road, you find that peo

well, spell it out tell me about it goldman has to stop -- i'm saying how people feel about goldman. they says i want jpmorgan, bank of america, i want rate sensitivity. that would also show that goldman's earnings are not episodic now, they may say the government won't let us, but put out a schedule of what they would do wells fargo is doing better. wells fargo. >>> axios with a piece out today on buy now, pay later, putting affirm on notice, we have had to see more good data. >> paypal is bigger than affirm or buy now/pay letater max says we need to see the losses these are not black boxes. they will tell us. good to be back lloyd, not unlike the overlook hotel, critical scenes in "the shining. but the applecart, it's like fight club, they do this apple card, which, by the way, a lot of -- is it good is it bad? what does it do? i don't know you can't do that anymore. i'll take capital one. >> as for financials as a sector, and energy as well some are arguing the reason you would expect a leg lower is those two sectors are facing a resistance >> i think that's wrong. the mobiles are

goldman sachs for one thing weighing in on that. in at what is a moving feast. >> rate lift off in the 22nd meeting, that is what people will watch signals for. why do they look at march? the fed has started tapering bond purchases, and it will have finished by that meeting. that is why people are talking about rate lift off. let's go to the bloomberg chart to get a sense of expectations for how many rate hikes the fed is going to have to make this year to reign in inflation. right now, this chart shows it clearly. people are looking for four rate hikes in total. goldman sachs in a letter over the weekend to its clients saying they see baseline four rate hikes, march, june, september, december. those of the meetings every three months when they update their economic forecast, when they look at dot plots, so that is the logical way to look at. upside risk arches for the number of rate hikes, i also think inflation is what is driving that fact that they could do more and could do it quicker. they are also talking about balance sheet r

i think that is more to do with the goldman note. talk me through the bullishness in the oil market this morning. >> drone strikes are coming on the backdrop of already bullish markets. crude markets are rallying on more than expected demand. gasoline markets are all doing really well. some countries have recently imposed restrictions. coupled with supply disruptions and production shortfalls, the markets are in a tight balance. it is something we are also seeing in the physical markets in asia this morning. russian crude is a favorite of china, trading at much higher levels. dani: thank you very much. that is our oil trading reporter elizabeth low. the bank of japan has adjusted its views on inflation for the first time since 2014. let's get to juliette saly in singapore. it seems the big market reaction is to u.s. yields, but what are you looking at in japan? >> a chart on japanese price pressures, not sure what is going on with our gtv data. we are focused on oil. we did have this change from the bank of japan to the inflation for

goldman says this will depend on inflation. there is still supply chain issues. there is somewhat of an upside risk to their baseline forecast for four hikes. i guess they could see five or more. you have to put it together. they are seeing some tightening action at each meeting until the inflation picture changes. they think balance sheet runoff could start in june but there is a risk it starts in may. we spoke with chris waller two weeks ago. governor waller said his baseline is three hikes this year but there could be four or five if inflation does not come down. he said balance sheet reduction would start after lift off. and the lift off -- after it, you could see the balance sheet reduction by early summer. one of the most interesting things that has come up recently is some people are saying, why is the fed going to keep buying securities, granted they are tapering them? ing research said this weekend there is going to be an announcement of an immediate cessation of any kind of bond purchases at the meeting this week. renaissance macro put that out in a not

what will be interesting to see tomorrow and with goldman and stanley next week is whether jefferies was more stock specific for the quarter or whether it is broadly going to affect all the banks fixed income trading hasn't been in key area for the capital market's performance over the last year or say we have had amazing m & a performance, ipo issuance and trading in general there are other areas where morgan stanley, goldman sachs, and capital banks citi and jp morgan can differentiate themselves and pick up the slack. although they fell a little bit in lieu with jefferies, but not as much. >> and jefferies had other positive trends, advisory, equities at capital markets. it wasn't all bad. wilf, thank you. we will see you soon we appreciate it >> pleasure. >> ty. >> kelly, here with more on what to expect from the big banks and the impact of rising rates, tom misho, president and ceo of kbw and a number one adviser on bank m&as tom, good to have you. let's pick up where wilf just left off that is on the trend of m&a. do you see it continuing into 2022 not just in the banking area,

goldman sachs benefited from the power grid failure in the u.s.the northern hemisphere, and then there is the frenzied move in the european markets at the end of last year, of the division which was facing cutbacks is now one of the biggest success stories. haslinda: what will this translate to with earnings next week? >> it does highlight how the pandemic has allowed it to flourish. goldman does not break out earnings, but unit revenue surpassed $2.2 billion last year. the person who heads the division is poised to take on one of the biggest bonuses of our partners at goldman when we get the earnings next week. this should offset some of the less than stellar numbers were expecting from the fixed income part of the unit. overall, q4 results for goldman sachs will show the dominance of its dealmakers, while trading businesses are expected to be more subdued in general. rishaad:, jp morgan, wells fargo, citibank but what are investors looking for with earnings and what can they expect? >> investment banking revenue at the five biggest firms climbed

that is the latest forecast from goldman sachs.he dot plot the fed put out themselves shows three rate hikes. before that we were thinking about two. how does that trajectory affect your strategy? tracie: what is kind of missing from the conversation here is that the fed is still accommodative. right now, the fed is still buying bonds. they will be accommodative through march. that is when they will probably start to tighten by increasing interest rates. we don't see balance sheet reduction this year. the fed will have to calibrate their response to what is happening in the markets, what is happening in the economy, what consumers are doing. yes, the tough talk right now is already having an impact on the fixed income rockets, equity prices, but it will also have an impact. they want to avoid disruptions in the economy and the market. we may be assuming at this point that they will have to tighten more than they actually will. matt: it is interesting that we will also watch the runoff in the balance sheet. i hear some people say th