Goldman Sachs’ Horrible Bond-Trading Year Puts Bonuses at Risk

One of Wall Street’s biggest money machines, bond trading, is barely cranking.

This time last year, markets were moving fast, due to President Donald Trump’s surprise election victory and the prospect of big corporate tax cuts, a major rollback in regulations, faster economic growth and bigger government deficits. Wall Street brokers raked in commissions and big trading gains as investors scrambled to reshape their bond portfolios.

But this year has seen price swings in bonds and other assets drop to unusually low levels, keeping investors on the sidelines and leaving few opportunities for traders at banks to score gains on big market moves. The effect will be on view starting Friday as JPMorgan Chase & Co. (JPM – Get Report) , the biggest U.S. bank, posts results for the last three months of 2017 and the full year.

JPMorgan is expected to see fourth-quarter fixed-income trading revenue plunge by 22% from a year earlier, according to analysts at the brokerage firm Keefe, Bruyette & Woods. Goldman Sachs Group Inc. (GS – Get Report) , historically one of Wall Street’s most powerful moneymakers, is expected to see an industry-worst 31% decline, capping an annus horribilis for CEO Lloyd Blankfein that has led some analysts to call for his departure.

Source: TheStreet

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