Goldman Sachs Beats Earnings Forecasts as Equities Trading Surges 72%

Market Commentary

South African Market Summary

South African equities advanced on Tuesday, with the JSE All Share Index gaining 0.60% to close at 109,408.15 points, while the Top 40 rose 0.59% to 101,562.36 points. However, domestic mining production contracted 12.7% year on year in August, worsening from July’s 7.5% decline and significantly exceeding economists’ expectations of a 3.7% contraction. Weakness in platinum group metals, coal and iron ore, alongside declining mineral sales, highlighted persistent industry pressures. Meanwhile, South Africa’s manufacturing sector faces intensifying competition from Chinese imports as US tariffs redirect Chinese exports towards alternative markets. Chinese shipments to South Africa increased 29% year on year during the first eight months of 2026, adding to challenges facing domestic producers and raising concerns about the competitiveness of local manufacturing.

European Market Summary

European equities ended marginally lower on Tuesday as semiconductor losses outweighed optimism surrounding easing oil prices. The STOXX 600 declined 0.1% to 635.01 points, ending a two-session winning streak, while London's FTSE 100 slipped 0.06% and Germany's DAX and France's CAC 40 each fell 0.07%. Technology shares faced selling pressure following reports of advances in Chinese memory-chip design by CXMT, raising concerns about increased competition and AI-related valuations. ASM International declined 6.3%, making it the STOXX 600's worst performer, while Soitec lost approximately 6%. Meanwhile, ECB Chief Economist Philip Lane warned that AI adoption could weaken wage-bargaining power and moderate wage growth, although substantial investment in the technology could increase long-term borrowing costs and tighten financial conditions.

 US Market Summary

US equities ended lower on Tuesday as semiconductor stocks extended losses and investors assessed mixed third-quarter banking results. The S&P 500 declined 0.02% to 7,805.45, the Nasdaq fell 0.15% to 27,204.38, and the Dow Jones lost 0.35% to 51,670.10. The PHLX Semiconductor Index declined 0.23%, marking its fifth consecutive loss, amid concerns over AI investment valuations and growing Chinese competition. JPMorgan missed earnings expectations, while Goldman Sachs exceeded forecasts, supported by stronger equities trading. Investors awaited September CPI figures, with headline inflation expected to reach 3.6% annually and monthly core inflation forecast at 0.2%. Markets priced a 22% probability of an October Federal Reserve rate increase. Meanwhile, the IMF raised its 2026 global growth forecast to 3.1%, while highlighting energy, debt and AI-related risks.

Asian Market Summary

Asian equities edged higher on Wednesday as artificial intelligence-related stocks recovered from the previous session’s sell-off, although elevated oil prices and caution ahead of US inflation data limited gains. China’s September exports surged 36.3% year on year, exceeding expectations of 25.5%, while imports increased 31%, against forecasts of 24.5%, signalling resilient international trade activity. Meanwhile, Chinese producer inflation accelerated to a four-year high of 5%, above expectations of 4.5%, driven by rising commodity and manufacturing input costs. Consumer inflation remained subdued at 0.9%, below the anticipated 1%, highlighting persistent weakness in domestic demand. Singapore’s central bank unexpectedly maintained its monetary policy settings despite third-quarter economic growth of 5.4%, with policymakers expecting inflation to moderate during 2027. Regional sentiment remained sensitive to energy prices and US monetary policy expectations.

Commodity Market Summary

Gold prices remained broadly unchanged on Wednesday as investors awaited US consumer inflation data for further guidance on Federal Reserve monetary policy. Oil prices strengthened amid escalating supply risks following renewed Houthi attacks on Saudi Arabia, including a strike on a Saudi Aramco administrative building in Dhahran that caused a limited fire. Continued missile and drone attacks have heightened concerns over regional energy infrastructure and shipping security. Iranian officials also indicated that Tehran was adopting new tactics to disrupt shipping through the Strait of Hormuz, potentially sustaining elevated oil prices. Meanwhile, OPEC reported increased production following Saudi Arabia’s output expansion, partially offsetting supply concerns. Russia’s proposed diesel exports to the United States provided another potential source of supply, although Moscow rejected any direct connection between the agreement and Ukraine peace negotiations.

Currency Market Summary

The South African rand maintained its gains on Tuesday, supported by a weaker US dollar and lower oil prices, despite disappointing domestic mining production data. The dollar remained under pressure on Wednesday as investors awaited US consumer inflation figures and further Federal Reserve guidance on interest rates. The dollar index declined 0.02% to 102.16, following a 0.35% retreat on Tuesday, while the euro strengthened 0.04% to $1.1203. Sterling advanced 0.03% to $1.3256, while the yen remained broadly unchanged at ¥158.32 per dollar. Elevated French bond yields reflected persistent fiscal concerns, while investors reassessed the sustainability of AI-driven demand for US assets. New York Fed President John Williams indicated that another rate increase may be required in 2026, but sees no further tightening necessary in 2027.

Domestic Company News 

African Rainbow Minerals Limited (ARI) +1.56%

African Rainbow Minerals (ARM) intends to defend legal proceedings initiated by Assore South Africa concerning management rights and information access at Assmang, while pursuing counterclaims against Assore. The dispute involves ARM’s contractual rights to appoint senior management, oversee operations and obtain records necessary for regulatory compliance. ARM maintains that Assore’s allegations lack substantive merit and will continue managing Assmang under the existing shareholders’ agreement. Despite the dispute, both parties remain engaged in operational discussions, including negotiations over the timing and quantum of Assmang’s final dividend for the financial year ended 30 June 2026. ARM confirmed that the legal claims do not concern dividend distributions and reiterated its commitment to maximising shareholder payouts. Assmang’s cash and cash equivalents attributable to ARM totalled R3.9 billion at year-end.

Bytes Technology Group plc (BYI) -4.18%

Bytes Technology Group reported strong interim results for the six months ended 31 August 2026, with gross invoiced income increasing 19.6% to £1.61 billion and revenue rising 18.7% to £128.3 million. Gross profit advanced 17.8% to £97.1 million, supported by public and private sector growth of 23.1% and 14.6%, respectively. Operating profit increased 6.6% to £35.3 million, while headline earnings per share rose 6.1% to 12.76p. Cash declined 16.8% to £68.4 million following shareholder distributions, including a £25 million buyback. The interim dividend increased 3.1% to 3.3p per share, payable on 20 November 2026. Management maintained upgraded full-year guidance for low-to-mid-teens gross profit growth and low-to-mid-single-digit operating profit growth, excluding the pending CyberOne acquisition.

Foschini Group Limited (TFG) +0.06%

The Foschini Group reported a cybersecurity incident affecting certain IT systems within its UK-based TFG London operations, identified on 11 October 2026. The incident specifically impacts the Phase Eight, Hobbs and Whistles brands, while Inside Story and White Stuff remain unaffected. TFG immediately activated its incident response and business continuity plans, engaging external cybersecurity specialists to contain the disruption and notifying relevant UK authorities. Although TFG London stores remain open and trading, several IT systems remain unavailable. The Group confirmed that its African and Australian operations operate on separate systems and have not been affected. Investigations are ongoing to determine whether personal or sensitive information has been compromised. TFG will notify affected parties where necessary and communicate further material developments through SENS announcements.

Global Company News

JPMorgan Chase & Company (JPM) -0.86%

JPMorgan Chase missed quarterly earnings expectations for the first time since 2023, reporting third-quarter earnings of $5.57 per share against forecasts of $5.85. Investment banking fees declined 8% quarter on quarter but increased 14% annually, reflecting weaker dealmaking activity amid market volatility and economic uncertainty. Markets revenue rose 15%, supported by a 49% surge in equities trading, while fixed-income revenue declined 4%. Net interest income excluding markets increased 6% to $24.7 billion, supported by 10% loan growth. The bank raised its full-year net interest income forecast to $106.2 billion, or $97.2 billion excluding markets, while increasing adjusted expense guidance to $108.6 billion. Management maintained a strong investment banking pipeline despite delayed transactions and projected approximately $107 billion in net interest income excluding markets for 2027.

Goldman Sachs Group Inc. (GS) -0.23%

Goldman Sachs exceeded third-quarter earnings expectations, reporting net profit of $5.29 billion, or $17.01 per share, against forecasts of $13.02 per share. Total net revenue increased 23% to $18.68 billion, supported by strong equities trading and investment banking activity. Equities revenue surged 72% to $6.44 billion amid market volatility, while fixed-income, currencies and commodities revenue declined 1% to $3.47 billion. Investment banking fees rose 21% year on year to $3.22 billion, driven by stronger underwriting and record advisory revenue, despite a 5% quarterly decline. Asset and wealth management revenue increased 14%, supporting earnings diversification. Management maintained a positive dealmaking outlook despite elevated interest rates and geopolitical uncertainty, while highlighting opportunities and financing risks associated with expanding artificial intelligence investment.

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