Goldman Sachs delivers contrarian take on the economy

Economic Outlook - Goldman Sachs CEO David Solomon expresses optimism about the economic backdrop for 2026, citing strong fiscal support, significant AI-driven capital investment, and a favorable business environment [1][6] - Solomon notes that strategic activity is increasing, with businesses considering large deals and IPO discussions gaining momentum, indicating a shift from recent negative economic sentiment [2] Consumer Activity - Bank of America CEO Brian Moynihan reports that January activity was nearly 5% higher than the previous year, with spending rising across various income brackets, reflecting consumer optimism [3][4] Banking Sector Performance - Major banks, including Goldman Sachs and JPMorgan, have demonstrated resilience by maintaining fee growth, protecting margins, and effectively managing credit risk despite economic challenges [7][8] - Goldman Sachs' recent quarterly earnings report shows a strong performance, with earnings per share (EPS) of $14.01, exceeding expectations of $11.65, although revenue of $13.5 billion fell short of the expected $13.9 billion [11] Revenue Breakdown - Goldman Sachs experienced a significant impact from its exit from the Apple Card business, with Platform Solutions revenue declining to -$1.68 billion due to a $2.26 billion markdown related to the Apple Card portfolio sale [12] - Despite this, Global Banking & Markets revenue increased by 22% year-over-year to $10.4 billion, with investment banking fees rising by 25% to $2.58 billion, and equities also up by 25% to $4.31 billion [12]