Goldman Sachs in Talks to Sell Consumer Lender GreenSky
Topic of the day
Goldman Sachs is in advanced discussions to sell its specialty lender, GreenSky, to a group of investment firms, in a major step away from the Wall Street bank's failed experiment in consumer lending. The group includes Sixth Street, Pacific Investment Management and KKR, according to people familiar with the matter. A deal would be worth about $500 million, according to people familiar with the matter, less than one-third of what Goldman paid for the business just a year-and-a-half ago. It would culminate a long auction process that drew bidders including other private-equity firms and financial-services companies. Goldman is now in exclusive talks with the Sixth Street group. The move would mark a dramatic about-face. Goldman paid roughly $1.7 billion for GreenSky, which specializes in extending loans to consumers for home renovations, hoping it would help the Wall Street giant be a bigger competitor in consumer lending and a "banking platform of the future," Chief Executive David Solomon told The Wall Street Journal at the time.
The Switzerland market ended notably higher on Wednesday, with investors picking up stocks, shrugging off a government report that said the nation's economy will expand significantly below average in both 2023 and 2024. The benchmark SMI ended with a gain of 85.41 points or 0.77% at 11,154.11. Givaudan, up 4.73%, was the top gainer in the SMI index. Lonza Group rallied nearly 2.5% and Geberit surged 2.03%. Holcim, Kuehne & Nagel, Sika and UBS Group advanced 1.4 to 1.8%. Nestle, Sonova, Novartis and Alcon also ended notably higher. Richemont ended 1.83% down, while Roche Holding and Logitech posted modest losses. In the Mid Price Index, Straumann Holding, Meyer Burger Tech, AMS, Tecan Group and Clariant advanced 2.5 to 3.1%. Bachem Holding, Flughafen Zurich, Adecco, SGS, Belimo Holding, Lindt & Spruengli, Ems Chemie Holding, Julius Baer and Temenos Group also posted strong gains. Baloise Holding dropped more than 6%, and Helvetia ended lower by about 3.1%. In its latest quarterly report, the State Secretariat for Economic Affairs, Or SECO, said the economy will log weak growth in the second half of the year. However, the agency upgraded the nation's 2023 growth forecast to 1.3% from 1.1%, citing strong growth in the first quarter.
European stocks closed on a bright note on Wednesday, as investors reacted positively to UK inflation data and a report showing a sharp plunge in German producer prices, and looked ahead to the Federal Reserve's policy announcement later in the day. The Bank of England (BoE) is scheduled to announce its monetary policy on Thursday. The Bank of Japan, the Swiss National Bank and the Norges Bank are also set to make their policy announcements this week. The pan European Stoxx 600 gained 0.91%. The U.K.'s FTSE 100 climbed 0.93%, Germany's DAX surged 0.75% and France's CAC 40 ended 0.67% up, while Switzerland's SMI gained 0.77%. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Netherlands, Norway, Poland, Portugal, Spain and Sweden closed higher. Greece, Iceland, Russia and Turkiye ended weak. In the UK market, housing sector stocks Barratt Developments, Persimmon and Taylor Wimpey rose sharply after data showed British house prices increased by 0.6% in the 12 months to July. Just Eat Takeaway.com climbed more than 7% after its U.S. unit Grubhub was allowed to sue New York City over a law capping how much it can charge restaurants for delivering meals. Taylor Wimpey, Persimmon, Barratt Developments, BT, Kingfisher, Croda International, Segro, Land Securities, TUI and Natwest gained 4 to 5.6%. Lloyds Banking Group, British Land Company, Berkeley Group Holdings, Auto Trader Group, AstraZeneca, Pennon, Johnson Matthey, Rightmove, Easyjet, GSK, Entain and United Utilities also moved up sharply. Smurfit Kappa Group ended 4% down. WPP, Melrose Industries, Centrica, 3i, BAE Systems, Burberry Group, Pearson and Rolls-Royce Holdings lost 1 to 2%. In the German market, automakers Mercedes-Benz, BMW and Volkswagen gained after data showed EU car sales grew 21% in August.
For months, investors snapped up tech stocks as if they didn't believe the Federal Reserve's promise to slow the American economy by keeping interest rates higher. Wednesday gave the latest evidence that the tech trade is cooling. The central bank unveiled its long-telegraphed rate-hike pause but warned of possible increases to come. Markets largely didn't like the message. Losses by Amazon.com, Apple, Alphabet, Microsoft, Meta and Nvidia weighed the tech-heavy Nasdaq down by 1.5% and pushed the S&P 500 0.9% lower. The Dow Jones Industrial Average fell 0.2%, or about 77 points. The belief in a return to ultralow interest rates – even despite central bankers' hawkish messaging -- made future profits promised by such firms particularly enticing. But Wednesday highlighted the slowdown in the tech trade, dimming major stock indexes' outlook. All three have posted losses so far this month. In a press conference Wednesday, Fed Chair Jerome Powell said central bankers believe the U.S. economy remains robust, good news for investors who are increasingly betting on a so-called soft landing. But he cautioned that cooling price pressures could require a longer period of the higher rates that could weigh on corporate investments and earnings. Major stock indexes veered slightly lower following his remarks. While shares in tech firms and big banks sputtered, consumer staples and healthcare stocks were among the S&P 500's few bright spots. Marketing-automation platform Klaviyo’s shares opened more than 20% higher in its market debut, the latest company whose shares jumped on its opening day of trading. The Boston-based firm helps companies send more-targeted emails and text messages. It was founded in 2012 by Andrew Bialecki, its chief executive, and Ed Hallen, chief product officer.
In the wake of the statements by the US Federal Reserve the previous evening, the stock markets in East Asia and Australia went down on Thursday - in some cases quite sharply. On the Japanese market, the Nikkei index fell by 1.3 per cent to 32,604 points. The firm dollar (weak yen) also fizzles out as a support factor for shares. The dollar has risen to around 148.40 yen in reaction to the Fed statements, its highest level since November 2022. Shanghai holds up somewhat better with a minus of 0.6 per cent.
Bond yields hovered near at least 15-year highs, and big tech companies that powered the 2023 rally dragged down stocks, suggesting Wall Street is finally buckling in for a longer ride with higher borrowing costs.
UBS raises the Pearson target to 1,080 (1,010) p – Buy
Dt. Bank lowers the Kingfisher target to 220 (260) p – Hold
Dt. Bank lowers the Societe Generale target to EUR 32 (36) – Buy
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.