Major U.S. indices took a tumble on August 27 as conflicting reports on the trade war with China frustrated investors. U.S. President Donald Trump alluded to positive movements on the trade portfolio with China, but this was later rebuked by new reporting.
Goldman Sachs (NYSE:GS) stock has dropped 10% over the past month. However, shares are still up 19.5% in 2019 so far. Should investors bet on continued weakness to finish this year?
The investment bank’s second quarter 2019 results beat expectations.
Earnings per share rose to $5.81 and revenue soared to $9.46 billion. Goldman was one of the first to project that the benefits of the U.S. Tax Cuts and Jobs Act would dissipate in 2019, but so far, the impacts of that policy have still provided a boon to its bottom line. Total investment banking revenue came in at a better-than-expected $1.86 billion in Q2 2019.
Investors will now await its third quarter report, which is due to be released in October. The media noise is distressing, but the U.S. economy has continued to post solid numbers into the late summer.
Goldman is on solid footing ahead of its next earnings release.
Shares of Goldman boast a favourable price-to-earnings ratio of 8.3 and a price-to-book of 0.9. The stock’s August slump has pushed its RSI to 42, which means it is still well outside of technically oversold territory.
Goldman looks like a hold right now, but value investors should monitor the stock and jump on an entry point if it comes before Q3 earnings.
