Goldman Sachs is the next US banking giant due to reveal how it's performed during the third quarter of 2016, announcing results before the bell today. Here are three things to keep an eye out for:
It doesn't take more than a passing glance at a newspaper to know banks aren't exactly strangers to the odd spot of legal hot water. Goldman Sachs, in particular, will be closely watched for its legal spend, with a London court finding in favour of the banking giant in a case against Libyan Investment Authority just last week.
Big legal cases also mean big money. Goldman's hefty litigation provision dragged its profits down in its half year results for 2015.
Ever since 24 June, investors, clients and interested members of the public alike have been pondering what financial services firms will do in light of Brexit. In particular, many will be wondering if some of the big US players might be considering shifting some of their operations to Europe in a bid to overcome uncertainty around the UK's ability to secure passporting.
So, when Goldman Sachs releases its results later, analysts will likely be quick to check for hints of what the lender will do next. Recently, The Sunday Times reported the bank could move as many as one in three jobs out of London if politicians plumped for a hard Brexit, but Goldman was quick the refute the speculation.
The business environment has been less than welcoming for banks in recent times. Lower for longer interest rates have squeezed revenues, increasing red tape has tightened profits and political instability, linked mainly to the UK referendum over the summer and the upcoming US presidential elections, have put clients off making big decisions.
The four banks who came before – JP Morgan, Citigroup, Wells Fargo and Bank of America – have done well to push aside analysts' fears. However, while analysts were predicting a fairly modest performance at best from these lenders, predictions for Goldman are that it could be in for a boost for both revenue and profits.
If Goldman Sachs manages to outpace predictions, it's likely to push up the markets more generally as well.