Dec 17 – Goldman Sachs Group has hired Brian Cayne, a co-founder of boutique tech investment bank Qatalyst Partners, as a global co-head of its software investment banking group, according to people familiar with the matter.
Cayne is expected to start at the Wall Street giant in January, the people said, asking not to be named to discuss confidential personnel matters. Based in San Francisco, Cayne will co-lead the software banking practice alongside existing co-heads Joe Porter in London and Jason Rowe in New York.
In his new role, Cayne will report to Barry O’Brien and Jung Min, who serve as the global co-heads of Goldman’s technology, media, and telecom (TMT) investment banking group, the people said.
A spokesperson for Goldman Sachs declined to comment.
Cayne spent 15 years at Qatalyst Partners helping to establish it as a premier advisory firm focused on the technology sector before leaving the bank in 2023, according to his LinkedIn. He joined the firm in 2008 as part of the founding team led by legendary tech banker Frank Quattrone.
The high-profile hire underscores Goldman’s push to bolster its advisory practice in the lucrative and highly competitive software sector.
Goldman Sachs & Co ranked No. 1 in global technology M&A in 2025 by deal value, advising on transactions totaling $337.8 billion, giving it a 42.5% market share, according to data compiled by LSEG.
Some of the bank’s largest deals this year included the $56.5 billion leveraged buyout of Electronic Arts and Alphabet’s $32 billion acquisition of cloud security firm Wiz.
Cayne’s hire signals the bank’s intent to compete aggressively for top talent and major deals as it reshapes its influential TMT group to better capitalize on key growth trends, including artificial intelligence.
Goldman Sachs is undertaking a wider reorganization of its TMT investment banking division. The bank is restructuring the group with a strategic focus on infrastructure deals and AI, according to an internal memo previously seen by Reuters.
As part of that overhaul, the bank combined its telecom and “CoreTech” teams to form two new groups: Global Infrastructure Technology and Global Internet and Media.
(Reporting by Milana Vinn in New York. Editing by Dawn Kopecki and Nia Williams)
(Bloomberg) — A renewed bout of volatility gripped US stocks in the final stretch of May, with dip buying pushing the market higher amid a rotation between technology and other industries.
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In a late-day comeback, the S&P 500 rose almost 1% Friday to notch its best month since February. The gauge had fallen almost as much earlier in the session, dragged down by megacaps. Investors betting tech giants will continue to power gains could be in for a rough ride when other sectors start to catch up, according to strategists at Bank of America Corp. — who said the outperformance of value over growth as market breadth improves could be the next “pain trade.”
“Leaders to losers… for now,” said Dan Wantrobski at Janney Montgomery Scott. “We are seeing breaks of initial support in some leadership areas. Net-net we are still expecting a bumpy ride for US equities as we enter the month of June.”
Meantime, Treasuries extended gains at the end of their best month in 2024 as the core personal consumption expenditures price gauge met estimates, while posting the smallest increase this year. What’s more, spending unexpectedly dropped. For a data-dependent Federal Reserve, the report was seen by traders as “not quite as bad”, “slightly constructive” and “marginally dovish.”
“While we don’t necessarily want to see a weakening consumer, softening retail spending should help stoke the flames for lower rates in the second half of 2024,” said Bret Kenwell at eToro. “We’re not there yet, but the inflation reports were a constructive first step.”
The S&P 500 briefly broke below 5,200, but closed above that level — as every major group but technology advanced. The Dow Jones Industrial Average of blue chips rose 1.5% — the most since November. The Nasdaq 100 finished flat after dropping almost 2% Friday. The tech-heavy measure posted its best month in 2024.
US 10-year yields fell five basis points to 4.4985%. The dollar was little changed Friday, but saw its first monthly loss since December.
Matt Maley at Miller Tabak says that usually when we get some “rotation” in the stock market, that’s viewed as a positive development. However, since the rotation between tech and everything else has gone in both directions over the past two weeks, he views it as a negative development.
“In other words, the kind of ‘rotation’ we’ve seen recently can be viewed as ‘churning,” he said. “This is not negative in-and-by-itself, but when it comes after a nice rally, it tends to indicate that the advance is becoming tired. Thus, it is frequently followed by some sort of a pullback — even if it’s only a mild one.”
Technology shares now appear overextended, suggesting a correction may be on the horizon, according to Fawad Razaqzada at City Index and Forex.com.
“After months of substantial gains and no new bullish catalysts, a correction wouldn’t be surprising,” he said.
Hedge funds’ exposure to US technology behemoths hit a record high following Nvidia Corp.’s estimate-thumping earnings report this month, according to a recent report from Goldman Sachs Group Inc.’s prime brokerage.
The so-called Magnificent Seven companies — Nvidia, Apple Inc., Amazon.com Inc., Meta Platforms Inc., Alphabet Inc., Tesla Inc. and Microsoft Corp. — account for about 20.7% of hedge funds’ total net exposure to US single stocks, the report showed.
A strong start of the year for US stocks suggests above average performance in the second half of 2024, according to data analyzed by Scott Rubner at Goldman Sachs Group Inc.
Going back to 1950, there have been 21 episodes when the S&P 500 was up more than 10% by the end of May.
Out of these, the only two instances where the S&P 500 ended the rest of the year down were 1987 when it fell 13% and 1986 when it slipped 0.1%, meaning that the index was up about 90% of the time.
Amid the several twists and turns in stocks, traders also waded through the latest inflation report.
The so-called core PCE, which strips out the volatile food and energy components, increased 0.2% from the prior month. Inflation-adjusted consumer spending unexpectedly fell 0.1%, dragged down by a decrease in outlays for goods and softer services spending. Wage growth, the primary fuel for demand, moderated.
“Markets see inflation on a slow, but steady path lower,” said Quincy Krosby at LPL Financial. “The question is still how much more the Fed needs in terms of slower inflation before initiating an easing cycle.”
Overnight index swap contracts tied to upcoming Fed policy meetings continue to fully price in a quarter-point rate cut in December, with the odds of a move as soon as September edging up to around 50%. For all of 2024, the contracts imply a total of 35 basis points of rate reductions, up slightly from the close on Thursday.
While the PCE data will likely be welcomed by the Fed, the core gauge has still risen at an annualized rate of 3.5% in the last three months, according to David Donabedian at CIBC Private Wealth.
“So, it’s way too early for any sort of victory lap for the Fed,” he noted.
In fact, inflation may not return to the US central bank’s 2% target until mid-2027, according to research from Fed Bank of Cleveland.
That’s because the inflationary impacts of pandemic-era shocks have largely resolved and the remaining forces that are keeping inflation elevated are “very persistent,” Cleveland Fed economist Randal Verbrugge wrote in a report Thursday.
Another aspect is that consumer spending in the first month of the new quarter slowed as real disposable incomes fell, remarked Jeff Roach at LPL Financial.
“Businesses need to prepare for an environment where consumers are not splurging like they were last year,” he noted.
“We are in a be-careful-what-you-wish-for moment because if slowing consumer spending leads to lower inflation and the Fed is able to cut slowly as a result then that will be good for markets,” said Chris Zaccarelli at Independent Advisor Alliance. “However, if consumer spending – and the economy – slows too quickly, then corporate profits and stock prices will go down much more quickly than the Fed will be able to cut rates, so we would be careful at this point.”
Corporate Highlights:
Dell Technologies Inc. fell the most since it returned to the public market in 2018 after its first revenue increase since 2022 wasn’t enough to impress investors with high expectations for the company’s AI server business.
Carl Icahn has amassed a sizable position in Caesars Entertainment Inc., people familiar with the matter said, but has no plans to repeat a previous activist campaign at the hotel and casino group.
Hedge-fund manager Bill Ackman is selling a stake in Pershing Square as a prelude to a planned initial public offering of his investment firm, according to a person familiar with the matter.
Gap Inc. reported better-than-expected results and raised its outlook for the full year, showing the apparel retailer’s bid to rebuild the business is moving forward.
Penn Entertainment Inc. soared after an activist investor called for the sale of the casino company, saying a failed deal and growing pattern of guidance misses have damaged management’s credibility.
Moderna Inc. gained US approval for its RSV vaccine in older adults, giving the biotech company a second product as it seeks to move beyond its reliance on the fading market for Covid-19 shots.
Hess Corp. shareholders approved the company’s proposal to be acquired by Chevron Corp. for $53 billion by a razor-thin majority of 51% of shares outstanding.
(Bloomberg) — Markets have grown more pessimistic about the outlook for US economic growth, and if that continues in a substantial way it may offer a chance to buy stocks, according to Goldman Sachs Group Inc.
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The under-performance of cyclical equities this month signals concern that the recent tightening of financial conditions will stymie economic growth, Goldman strategists led by David Kostin wrote in a note Friday. At the same time, since the firm’s view is that the US economy will remain relatively resilient, companies in sectors like financial services, semiconductors and materials may still fare relatively well.
“Although we expect headwinds to discount rates and balance sheets to persist, we would view a substantial further downgrade to the growth outlook as a buying opportunity,” the strategists wrote.
This comes after the 10-year Treasury yield rose above 5% on Oct. 23 for the first time since 2007 as the Federal Reserve keeps rates higher for longer to ward off inflation. RBC strategist Lori Calvasina said the same day that the broader market is unlikely to find its footing until the surge in yields ends. Kostin warned earlier in the month that higher rates might be affecting US profits, and strategists at places like Morgan Stanley and JPMorgan Chase & Co. have cautioned that the earnings outlook appears to be deteriorating.
Kostin sees the S&P 500 ending the year at 4,500, slightly above the average 4,370 among strategists tracked by Bloomberg. The gauge closed Friday at 4,117.37, down 10% from its 2023 high reached in late July. Just days before it reached that peak, Kostin said the benchmark’s high valuation was reasonable and might rise further into year-end.
U.S. stocks are poised to rise on Monday ahead of a week of earnings and economic data releases, including quarterly reports from
Tesla, Netflix, and .
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investors may soon get a read on one of the company’s better deals in the past decade—a 2017 purchase for nearly $3 billion of a 38.6% interest in Pilot Flying J, the country’s leading operator of truck stops.
The Berkshire Hathaway (ticker: BRK/A, BRK/B) stake in the company will rise to 80% in the current quarter under the terms of the original agreement reached by CEO Warren Buffett with the founding Haslam family, which will retain the remaining 20% stake.
Tesla shares surged 22% in the past week, making it one of the top performers in a portfolio of stocks recommended by Barron’s.
Eric Thayer/Bloomberg
A portfolio of stocks picked by Barron’s has enjoyed a rally in the past week, as the market anticipates the end of the Federal Reserve’s interest rate hikes. A buoyant performance from the auto industry also juiced the portfolio.
The entire stock market has enjoyed a gain in the past week. The S&P 500 is up about 3% in that span, including a pop in the last couple of days. Wednesday, the Fed announced a small interest rate hike, but markets interpreted Chairman Jerome Powell’s comments to mean that the end of rate increases is coming soon.
The rally has helped the average stock in the Barron’s portfolio post a 3.8% gain in the past week. The measure differs from a value-weighted index like the S&P 500, where stocks with bigger market capitalizations have bigger effects on the index.
Almost three quarters of 86 stocks in the Barron’s portfolio are up in the past week, with some of the winners posting mammoth gains. Top performers include Generac
(GNRC), PoolCorp
(POOL) and Olaplex
(OLPX), which gained 15%, 14% and 19%, respectively in the past week.
Some stocks posted even larger gains.
Tesla
(TSLA) gained 22% since last Thursday’s close. In its fourth quarter of 2022 reported on Jan. 25, sales of $24.3 billion beat expectations for $24 billion, while earnings per share of $1.19 came in above estimates of $1.12. Wall Street is confident that, even with the company lowering prices as consumers feel the pain of higher rates, Tesla can keep boosting sales and profit growth. Analysts expect vehicle deliveries to grow 40% from a year earlier to almost 1.85 million in 2023, better than the 31% growth seen in the reported quarter.
“The key debates from here will be on whether vehicle deliveries can reaccelerate (we expect that they will especially starting in 2Q23),” writes Goldman Sachs
analyst Mark Delaney.
Barron’s recommended Tesla stock on Jan. 6, arguing that the the worst of the company’s challenges—including delivery growth—are behind it. The stock is up 67% since then.
Lithia Motors
(LAD), a $7 billion by market capitalization auto dealer, has seen its stock rise 23% in the past week. It reports fourth-quarter earnings Feb 15, but the stock has risen as the picture for auto sales has improved. Tesla’s quarterly performance helped, but so did General Motors‘ (GM). The automating giant reported better-than-expected sales and EPS and said on its earnings call that 2023 will be a “strong year,” one in which analysts expect sales growth.
Barron’s recommended Lithia Motors in April 2022, arguing that the stock was cheap and that production constraints that held sales back would soon be a thing of the past. Since then, the stock is up about 4%.
Lucid Group
(LCID), a $20 billion electric vehicle and battery maker, is up 39% since last Thursday. Earnings are Feb. 22, but strong auto trends already have helped. Lucid, too, is expected to lower prices and aggressively grow deliveries. The stock got a pop late in January on speculation that Saudi Arabia’s Public Investment Fund could buy the rest of the company. The fund recently invested $1.5 billion and holds just over 60% of the company.
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A massive selloff in bonds. A plunge in tech stocks. The implosion of cryptocurrencies. The highest inflation in four decades.
Amid a brutal and uncertain climate, we asked six heavyweights in the world of finance to share their thoughts on the state of the markets, how they have handled this year’s carnage and what they anticipate in the future.
John Foley, the co-founder and former chief executive of Peloton Interactive faced repeated margin calls on money he borrowed against his Peloton holdings before he left the fitness company’s board last month, according to people familiar with the situation.
As Peloton’s shares slumped over the past year, Goldman Sachs Group asked Mr. Foley several times to provide fresh funds or additional collateral for personal loans the bank had extended to him, the people said. The company’s share price has fallen nearly 95% from its $160 peak in December 2020.
