Goldman Results Remain Fantastic, but Capital Markets Cycle Looms

Goldman Sachs has reorganized its business around two core segments: global banking and markets, or GBM, and asset and wealth management, or AWM. The move reflects a push away from consumer banking, which looks appropriate after years of costly losses. Goldman is leaning into its role as a leading global investment bank, deepening its relationships with large clients and widening its base of recurring, fee-based revenue to try to mitigate the cyclicality inherent in its core business lines. We take a generally positive view of the pivot, although it's fair to point out that the combination of lower market prices, declining trading activity, and deleveraging during a downturn diminish the intended diversifying effects of those correlated business lines.