Goldman Sachs Stock Up 360% Under Solomon: Still Room to Run?

David Solomon showed up on CNBC to commemorate the 25th anniversary of 9/11, and somewhere between the moment of silence and the community service tribute, he casually dropped that $GS is up 360% since he took over in October 2018, compared to broader markets up less than half that. That is not a eulogy. That is a flex.

The timing matters. Goldman earnings are coming into focus at exactly the moment when the macro backdrop looks like someone spilled their entire spice rack into the blender. The 10-year Treasury yield just hit 4.95%, up from 4.77% at the start of the week. The VIX jumped 8.38% in a single session to close at 17.84. Oil briefly cleared $110 a barrel after Saudi Arabia's East-West pipeline took drone hits, and diesel in the US crossed $6 per gallon. For Goldman's trading desks, that is not a problem. That is a buffet.

Here is the bull case in plain English: rising rates are historically a gift to banks with large fixed income trading operations, and Goldman's is one of the best on earth. Volatility spikes mean wider spreads and more flow. Geopolitical chaos means advisory fees for companies doing defensive M&A and capital raises. Amanda Agati, CIO at PNC (per Bloomberg Podcasts), described the economy as warm rather than hot, with upside earnings surprises still coming in, which supports the case that credit is not falling apart yet.

The bear case is real though. The ECB just hiked again on top of whatever the Fed decides to do next, and a synchronized global tightening cycle has historically not been kind to loan books or IPO pipelines. If the Strait of Hormuz stays in single-digit shipping traffic and oil stays elevated, inflation expectations will keep the Fed from blinking, and that squeezes consumer credit quality on the margin. Watch Goldman's investment banking backlog commentary closely.

• 10-year yield at 4.95%, a multi-week high, boosts net interest income expectations
• VIX at 17.84 suggests elevated trading volatility, historically good for FICC desks
• Oil near $110 creates energy sector advisory and financing demand
• IBD's Mike Webster flagged that RSP (equal-weight S&P) is stuck below its 21-day moving average, which signals that the rally is narrow and fragile underneath the surface

Retail sentiment on YouTube and X is cautiously bullish on big banks right now, treating them as the one corner of the market that actually benefits from the chaos everyone else is running from. Solomon's 360% boast will age very well or very poorly depending on what the Fed says next, but either way, the man picked the right week to be on television.