Goldman Sachs Profit Soars 26% on Trading Rebound as Markets Awake

Goldman Sachs Group Inc. (GS) , the Wall Street firm, said first-quarter profit surged 26% as price swings returned to global markets following an unusually calm 2017, reviving client activity and boosting stock-trading revenue.

Net income rose to $2.83 billion from $2.25 billion a year earlier, according to a statement Tuesday from the New York-based bank. Earnings per share climbed to $6.95, beating the $5.58 average estimate of analysts in a survey by database provider FactSet.

Stock-trading revenue increased by 38% from a year earlier to $2.31 billion, Goldman said. Revenue in the fixed income, currency and commodities division was $2.07 billion, up 23%.

“Solid performance across our businesses produced strong returns,” CEO Lloyd Blankfein said in the statement. 

Wall Street firms including Goldman rivals JPMorgan Chase & Co. (JPM) have reported higher profit due to a resurgence in stock-market volatility as traders speculate over the pace of Federal Reserve interest-rate increases, U.S. trade tensions with China and the data-privacy scandal at Facebook Inc. (FB) .

The CBOE Volatility Index, a key gauge of market volatility known as the “VIX,” was 43% higher on average during the quarter.

JPMorgan said profit rose by 35%, while Bank of America Corp.’s  (BAC)  climbed 30%; Citigroup Inc. (C)  posted a 13% increase.

San Francisco-based Wells Fargo & Co. (WFC) , struggling to recover from a series of regulatory penalties over allegedly aggressive sales practices, posted a 5.5% profit increase on a preliminary basis, noting that legal costs might have to be revised higher pending discussions with regulators over as much as $1 billion of new penalties related to auto insurance and mortgage-related violations.

Morgan Stanley (MS)  is scheduled to post results on Wednesday.

Goldman Sachs, JPMorgan, Citigroup and Facebook are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.

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