The record earnings reported by bank Goldman Sachs literally takes the breath away.
For its second quarter, the US investment bank reported that it had earned US$3.44 billion. Just by glancing at its results, investors could be forgiven if the financial upheavals last year ever took place.
Much has been written about the subject – about how one influential analyst Meredith Whitney called a buy on the stock on Monday – or a day before the bank reported its results. This caused all boats on financials to rise on Wall Street.
Over here, banks have been enjoying a trot as well, after experiencing a lacklustre June.
The better economic outlook on the local front, coupled with Wall Street’s rebound, is giving them a big boost.
Still, it is not exactly the end of the game for the bears yet.
For many of them, Thursday next week may play a decisive role as to whether the market will rally into August.
This is because a troubled US lender – CIT Group – is due to report its results that day.
The name CIT does not ring a bell in this part of the world. But neither did other names such as Washington Mutual, Wachovia or Fannie Mae sound familiar to any of us until their financial difficulties sent global stock markets into a tailspin around this time last year.
Some media reports are warning that CIT might fail if it cannot roll over short-term debts of US$1 billion next month. If it does so, it would be the fourth biggest bankruptcy in US history. It sounds like a drearily familiar tune.
As usual, analysts are hoping that the US government will step in to save the embattled lender, given the key role it plays in the US economy, ,funding about one million businesses.
Another set of results which will be great interest to investors here is Citigroup’s second quarter results which is due to be released later this week. Unlike other US financials, this is one institution which has a huge branch network in this part of the world, and a very active business relationship with regional lenders.
It would be a report card which will be eagerly anticipated.